Why Are Investors Cheering Ulta Beauty Stock?

Benzinga2021-08-26

Ulta Salon Cosmetics & Fragrance (NASDAQ:ULTA) reported second-quarter FY21 sales growth of 60.2% year-on-year, to $1.97 billion, beating the analyst consensus of $1.72 billion. Sales improved 18% from Q2 FY19.

Comparable sales increased 56.3%, versus a 26.7% decline in Q2 FY20 and 6.2% growth in Q2 FY19.

The gross margin for the quarter expanded 1380 basis points Y/Y to 40.6% and 420 basis points from Q2 FY19.

The operating margin was 16.9%, and operating income for the quarter rose 2496% Y/Y to $332.3 million.

The company held $770.1 million in cash and equivalents as of July 31, 2021.

Net cash provided by operating activities for the six months totaled $401.4 million.

EPS of $4.56 beat the analyst consensus of $2.42.

Outlook: Ulta Beauty raised FY21 sales outlook to $8.1 billion - $8.3 billion (prior $7.7 billion - $7.8 billion) versus the consensus of $7.88 billion.

The company expects FY21 EPS of $14.50 - $14.70 (prior $11.50 - $11.95) versus the consensus of $12.28.

Analyst RatingsDeutsche Bank maintains Ulta Beauty with a Buy and raises the price target from $410 to $417.

Price Action: ULTA shares are trading higher by 5.31% at $410.60 in premarket on the last check Thursday.

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