Ulta Beauty Shares Fall After Earnings Announcement
Warrior Trading | Dec 03, 2017 01:25AM ET
Ulta Beauty Inc (NASDAQ:ULTA)
Ulta beauty, reported their quarterly earnings on Thursday November 30, 2017 after the market closed for trading. However, unlike previous quarterly announcements where by the company is beat handily on earnings, be estimates, and guided higher for future earnings, this quarterly report had mixed results and included a pessimistic outlook for the upcoming quarter.
The company’s net income gained a whopping nearly 20% from the same period a year ago. A few storms that hit the U.S. affected sales pretty heavily but did not derail things. Comparable store sales were up over 10%.
It was in the area of gross margins that failed for the company as well as the dreaded warning that the upcoming guidance from Wall Street might be just a little too high. The company suggests that earnings might come in somewhere between $2.73 to $2.74 per share which is well below the $2.84 per share analysts were expecting for the 4th quarter.
The actual earnings reported for this quarter were $1.70 per share beating the estimate of $1.67 per share. This all came on the heels of revenues of 1.34 billion. The shares which closed the regular trading session at $221.71 wound up nearly 5% lower after the earnings were announced, closing at $210.90 or -$10.81 (-4.88 %). The shares actually were down about 5% lower than that, however they rebounded about half from the initial fall.
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Mary Dillon, Chief Executive Officer had this to say to investors:
h3 The Price Chart/h3“Our third quarter results clearly demonstrate the strength and distinct advantages of the Ulta Beauty business model. We delivered double digit comparable sales growth, in spite of a moderation in the growth rate of our largest category – makeup – and meaningful disruption from hurricanes. We flexed our merchandising and marketing plans, leveraged our consumer insights and CRM platform, and worked with our brand partners to create compelling offers for our guests. We also benefitted from the unmatched breadth of beauty categories and products we offer. These levers allowed us to drive significant share gains, continue to rapidly grow our base of loyalty members, and thrive amidst shifting category trends within the beauty industry.”
The above price chart shows the price action going back nearly six months of 2017. The chart looked like it had been turning upward after crossing over the 50 period moving average . However, shares will likely open in that red oval area- possibly breaching that most important 50 period moving average once again.
Ulta Beauty, Inc. operates as a beauty retailer in the United States. The company’s stores provide cosmetics, fragrance, skincare, haircare, bath and body products, and salon styling tools, as well as others, including nail products and accessories.
It offers private label products consisting of Ulta Beauty Collection branded cosmetics, skincare, and bath products. As of March 9, 2017, the company operated 974 retail stores in 48 states and the District of Columbia. Its full-service salon offers hair, skin, and brow services; and provides products through its Website, ulta.com.
The company was formerly known as Ulta Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was founded in 1990 and is based in Bolingbrook, Illinois.
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