The 10-second takeaway
For the quarter ended Oct. 27 (Q3), Ulta missed slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share grew significantly.
Margins increased across the board.
Ulta booked revenue of $505.6 million. The 10 analysts polled by S&P Capital IQ expected to see net sales of $514.7 million on the same basis. GAAP reported sales were 22% higher than the prior-year quarter's $413.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.59. The six earnings estimates compiled by S&P Capital IQ anticipated $0.56 per share. GAAP EPS of $0.59 for Q3 were 40% higher than the prior-year quarter's $0.42 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 36.7%, 60 basis points better than the prior-year quarter. Operating margin was 12.1%, 140 basis points better than the prior-year quarter. Net margin was 7.5%, 100 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $772.2 million. On the bottom line, the average EPS estimate is $1.03.
Next year's average estimate for revenue is $2.37 billion. The average EPS estimate is $2.89.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 273 members out of 318 rating the stock outperform, and 45 members rating it underperform. Among 90 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 78 give Ulta a green thumbs-up, and 12 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ulta is outperform, with an average price target of $112.14.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Ulta Salon, Cosmetics & Fragrance. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.