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Shares in ULTA Salon Cosmetics & Fragrance jump after strong 1Q earnings

Published 05/28/2015, 06:11 PM
Updated 05/28/2015, 06:15 PM
Strong same-store and E-commerce sales helped ULTA enjoy a productive first quarter

Investing.com -- Shares in Ulta Salon Cosmetics & Fragrance (NASDAQ:ULTA), one of the largest beauty and cosmetics superstores in the United States, jumped nearly 2.5% in after-hours trading after reporting better than expected quarterly earnings and revenue on Thursday afternoon.

Bolstered by increases among numerous categories, salon sales and E-commerce sales, ULTA saw its net sales increase by 21.6% to $868.1 million and its diluted EPS spike by more than 35% to $1.04 during the first quarter.

“The ULTA Beauty team delivered an excellent start to 2015, with better than expected sales and earnings growth in the first quarter,” CEO Mary Dillon said in a statement. “We achieved our best comparable sales growth since 2011, driven by strong traffic growth in both retail and e-commerce, market share gains across all categories, and continued successful execution of our marketing strategies. We also drove significant operating margin expansion, with a healthy balance of product margin improvement and marketing and payroll expense leverage.”

During the 13-week period the company opened 24 new stores throughout the nation ranging from locations as far west as Cupertino, CA. and as far east as Schenectady, NY. The company ended the quarter with 797 stores, totaling square footage of approximately 8.425 million which represents a 14% increase on a year-over-year basis. ULTA also increased same store sales by nearly 12% on the quarter.

In terms of forward guidance, the company is looking to achieve same store growth in 2015 of 7-9%, above previous forecasts of 6-8%. For the second quarter, ULTA set a range of $1.07-$1.12 for diluted EPS, up from $0.94 for the same period in 2014.

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Shares in ULTA gained 3.87 or 2.48% in after-hours trading to 160.14. Over the last year, shares in ULTA are up more than 80%.

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