Ulta Beauty shares rally after third quarter beat show beauty industry ‘resilience’

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Shares of Ulta Beauty Inc. were up 5% in the extended session Thursday after the specialty retailer reported sales and earnings well above Wall Street expectations and raised its guidance for the year, saying that the results showed “the strength and resilience of the beauty category”.

Ulta ULTA,
+ 3.68%
said it earned $ 215.3 million, or $ 3.94 per share, in the third quarter of the fiscal year, compared to $ 74.8 million, or $ 1.32 per share, in the third quarter of the fiscal year 2020. Adjusted for one-time items, Ulta earned $ 1.64 per share.

Related: Dollar General agrees to offer merchandise at $ 1

Sales rose 29% to $ 2 billion, from $ 1.6 billion a year ago. The company attributed the increase to “the favorable impact of increased consumer confidence and fewer COVID-19 restrictions” compared to the quarter of last year.

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The FactSet consensus predicted EPS of $ 2.48 on sales of $ 1.89 billion.

Same-store sales increased 26% in the quarter, compared to a 9% decline in the third quarter of 2020, Ulta said. Compared to quarter 2019, same-store sales increased 14%, the company said.

“This strong performance in the third quarter reflects the strength and resilience of the beauty category, the power of Ulta Beauty’s differentiated model and the impact of our winning culture and team,” said Managing Director Dave Kimbell in a commentary. communicated.

See also: Olaplex products heading to Ulta in January 2022

The retailer forecast annual revenue of between $ 8.5 billion and $ 8.6 billion, compared to an earlier forecast of revenue of between $ 8.1 and $ 8.3 billion.

He called for an increase in same-store sales of between 36% and 37%, against a previous forecast of between 30% and 32%. He pegged EPS at between $ 16.70 and $ 17.10 for the year, against an earlier expectation of EPS of between $ 14.50 and $ 14.70.

Ulta said its merchandise inventories totaled $ 1.92 billion at the end of the quarter, up from $ 1.44 billion a year ago.

The increase is due to the addition of 40 new net stores opened since October 2020 and “the acceleration of inventory receipts to support expected demand and mitigate anticipated disruptions to the global supply chain.”

Ulta Beauty’s share has gained around 34% this year, compared to gains of around 22% for the S&P 500 SPX index,
+1.42%
in the same period.

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