By Bethel Habte<\/p>\n
In line with expectations, Ulta Salon, Cosmetics & Fragrance Inc. posted strong fourth quarter and annual earnings Thursday afternoon.\u00a0 The stock popped.<\/p>\n
Ulta made $87.26 million in the fourth quarter, compared with $70.68 million in the year earlier quarter. The company\u2019s earnings per diluted share widened to $1.35 from $1.09.<\/p>\n
<\/p>\n
The results outperformed the consensus estimate of $1.27 per diluted share.<\/p>\n
The company broke the $1 billion mark in revenues in the fourth quarter with $1.05 billion, a 20.7 percent increase from $868.08 million in the year-earlier quarter.<\/p>\n
The market reacted positively to Ulta\u2019s 5 p.m. announcement, boosting the stock some 6 percent in after-hours trading and reaching its 52-week high Friday at $156. The stock\u2019s price-to-earnings ratio is a robust 40.51 compared to the S&P 500\u2019s 20.50.<\/p>\n
Chief Executive Officer Mary Dillon attributed the company\u2019s performance to increased e-commerce, as it introduces more prestige brands online that were once\u00a0available only\u00a0in-store. She also pointed to solid growth in the in-store salon business and\u00a0a successful holiday marketing push, although she admitted slower fulfillment times stifled their potential earnings.<\/p>\n
[field name = “ultaq4″]<\/p>\n
\u201cIn December we stretched our ability to deliver a consistent guest experience since our speed to fulfill orders was constrained by our supply chain capabilities during this very busy time in the year,\u201d Dillon said in a conference call.<\/p>\n
She\u00a0said that a new distribution center in Greenwood, Ind., \u00a0scheduled to commence operations\u00a0in the third quarter, will serve to mitigate slowdowns.<\/p>\n
\u201cThroughout our organization, planning and ensuring the successful execution of our supply chain transformation is a top priority,\u201d she said.<\/p>\n
Dillon\u00a0said the company increased the focus on Ulta as a \u201cgreat gifting location\u201d and a one-stop shop for all beauty needs.<\/p>\n
Cowen and Co. analyst Oliver Chen said in a note to clients that Ulta’s\u00a0all-in-one approach across both \u201cprestige\u201d and \u201cmass\u201d brands has been a major advantage for the company.<\/p>\n
\u201cFrom a bigger picture perspective we believe the ULTA concept works because the retailer addresses that women want a shopping experience that reflects the way that her beauty bag looks e.g. multiple brands, multiple price points,\u201d he stated.<\/p>\n
The company experienced a slight decrease in gross profit to 33.4 percent from 33.8 percent in the year-earlier quarter due to increased costs associated with its ULTAmate Rewards loyalty program, which has 15 million active members.<\/p>\n
Ulta opened 10 stores in the fourth quarter and closed one, ending the quarter with a total of 774 stores.<\/p>\n
In 2015, Dillon said, the company is on track to open 100 more stores.<\/p>\n
In the full year 2014, Ulta earned $257.14 million or $3.98 per diluted share, on revenues of $3.24 billion, compared with $202.85 million, or $3.15 per diluted share, on revenues of $2.67 billion in 2013.<\/p>\n
Looking ahead to the first quarter, management expects between $833 million and $847 million in net sales, up from $714 million a year ago, \u00a0and\u00a0between 88 cents and 93 cents earnings\u00a0per diluted share, compared with\u00a077 cents\u00a0in the first quarter of 2014.<\/p>\n
Dillon also announced that Chief Merchandising Officer Janet Taake will be retiring after six years with the Bolingbrook, Ill.-based company.<\/p>\n
<div id=”featurecaption”>Photo at top: Ulta’s location on State Street in downtown Chicago is one of 774 stores. The company plans to open 100 more in 2015.<\/div><\/p>\n","protected":false},"excerpt":{"rendered":"
By Bethel Habte In line with expectations, Ulta Salon, Cosmetics & Fragrance Inc. posted strong fourth quarter and annual earnings Thursday afternoon.\u00a0 The stock popped. Ulta made $87.26 million in the fourth quarter, compared with $70.68 million in the year earlier quarter. The company\u2019s earnings per diluted share widened to $1.35 from $1.09.<\/p>\n","protected":false},"author":39,"featured_media":10716,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,243],"tags":[],"class_list":["post-10713","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2015"],"yoast_head":"\n