X
<

Ulta Beauty Stock: Why It Fell despite Beating 2Q17 Expectations

PART:
1 2 3 4 5
Part 3
Ulta Beauty Stock: Why It Fell despite Beating 2Q17 Expectations PART 3 OF 5

Insight into Ulta Beauty’s Fiscal 2Q17 Sales Numbers

Sales ahead of estimates

Ulta Beauty (ULTA) delivered sales of $1.3 billion in fiscal 2Q17,1 beating the consensus analysts’ sales estimate by 0.40%. Ulta Beauty’s sales rose 20.6% on a year-over-year basis in fiscal 2Q17. This growth rate looks impressive compared to what other retailers and department stores delivered in a challenging second quarter. JCPenney (JCP), which competes with Ulta Beauty through its in-store Sephora, delivered a sales growth of 1.5% in fiscal 2Q17.

Insight into Ulta Beauty’s Fiscal 2Q17 Sales Numbers

Interested in JCP? Don't miss the next report.

Receive e-mail alerts for new research on JCP

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

What drove Q2 sales

Ulta Beauty’s sales growth in fiscal 2Q17 was driven by strong new store productivity and an 11.7% same-store sales growth. The company’s prestige cosmetics continued to deliver an impressive performance in the quarter. Categories such as skincare, fragrance, and haircare also performed well.

The company’s online sales were impressive, rising 72.3% to $96.3 million in fiscal 2Q17. Its online sales growth represented 340 basis points of its fiscal 2Q17 same-store sales growth.

Why investors were not impressed

As mentioned in Part 1 of this series, Ulta Beauty stock fell on August 25, 2017, in reaction to the slowdown in the company’s fiscal 2Q17 same-store sales growth. Same-store sales rose 11.7% in fiscal 2Q17, which was lower than 14.4% same-store sales growth in fiscal 2Q16 and 14.3% growth in fiscal 1Q17.

The slowdown in the company’s same-store sales growth in fiscal 2Q17 was due to less promotional activity in the quarter.

Sales guidance

Ulta Beauty raised its fiscal 2017 sales guidance following its fiscal 2Q17 results. The company now expects same-store sales growth of 10.0% to 11.0% in fiscal 2017, including the impact of the online business. It previously expected same-store sales growth of 9.0% to 11.0% in fiscal 2017.

The company expects its fiscal 2017 online sales growth in the 50.0% to 60.0% range compared to the prior guidance of 50.0%.

We’ll look at the company’s margins in the next part of this series.

  1. Fiscal 2Q17 ended on July 29, 2017
X

Please select a profession that best describes you: