Solid Q4 for Ulta Beauty, but weak guidance sees shares drop

Net sales increased a huge 30.3 percent to $758.8 million from $582.5 million in the fourth quarter of fiscal 2011, helping net sales for the year increase 25 percent to $2,220.3 million.

Comparable store sales increased eight percent compared to an increase of 11.5 percent in the fourth quarter of fiscal 2011.

For Q4, Ulta reported net income of $64.5 million compared to $46.3 million in last year's corresponding period, which was up on expectations.

Strong performance​

Dennis Eck, Interim CEO, stated, “The Ulta team achieved strong fourth quarter results to complete an exceptional year in 2012.”​

“Excellent execution of our multi-year growth strategy was evident in the milestones achieved during the year: we increased square footage by 23 percent with the addition of 101 net new stores, we greatly enhanced our offering with newness across the board, we implemented a new Customer Relationship Management platform, broadened our marketing reach and brand awareness, and improved our digital capabilities including rapid growth in our e-commerce business.”​

Weak guidance​

However, despite all the positives coming out of the Illinois-based firm, the company’s guidance for the first quarter 2013 was below expectations, and has taken its toll on its stock.

Ulta said that it sees earnings per share in a range between $0.60 to $0.63, which is below current Wall Street consensus estimates of $0.72.

Eck and his team did not elaborate on the weak sales guidance; only stating that the company intends to achieve comparable store sales growth of around 4 percent to 6 percent in fiscal 2013, remodel seven store locations, and expand company-wide square footage by 22 percent with the opening of 125 net new stores.