Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) Issues Fresh Guidance: Investors Charmed

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Investors enthusiastically welcomed the makeover Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) gave to its guidance for the third quarter and for the full year 2016.

Ulta Shares leapt a solid 11.37% Thursday, closing at $266.14 on volume of 4.75 million.

The company also said it has ambitious plans to double its market share over the next several years by employing a strategy to boost store productivity, grow its e-commerce activity into a billion-dollar business, expansion into new stores and overall gaining a larger share of consumer spending.

Ulta is a beauty retailer operating retail stores which sell beauty products s cosmetics, fragrances, hair care and skin care products is as well as related accessories and services. In addition, these retail outlets offer salon services for hair, skin and brows. The Company offers more than 20,000 products from over 500 beauty brands including its own private label. It operates 907 retail stores across 48 states and the District of Columbia, and also distributes its products through its e-commerce arm.

Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) revises guidance

The company said that comparable sales including e-commerce are expected to jump 14 to 15% against the previous guidance of 11 to 13% for the third quarter 2016, while EPS is projected in the range of $1.35 to $1.3 versus a previous guidance of $1.25 to $1.30.

The favourable outlook for the third quarter would have an impact on the year’s results and accordingly, Ulta also revised upwards its projections for fiscal 2016. Comparable sales growth is now expected in the range of 12 to 14% versus the earlier expectation of 11 to 13%.

“The Company expects to deliver earnings per share growth in the mid-twenties percentage range, compared to previous guidance of low to mid-twenties percentage range, including the impact of the new Dallas distribution center, the rollout of prestige brand boutiques, the accelerated share repurchase program, and continued open market share repurchases,” Ulta said in its earnings release.

How Selfies will boost Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)’s bottom line

Talking to mad money host Jim Cramer, Ulta CEO Mary Dillon said the current selfie craze required people to be camera-ready at all times, and looking at their best, and that this was good for the company’s business.

“We are really focused on the beauty enthusiast … but also as you know, everybody has got a great phone in their pocket. Everybody is taking pictures. Who doesn’t want to look good in a picture?” she commented.

Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) long-term plan

For the period 2017 to 2019, Ulta expects to grow EPS by a low-20s percentage, resulting in a cumulative EPS growth of approximately 75% over those years.

It expects to drive comparable sales growth of 7 to 9% during 2017 to 2019 compared to its previous long-term guidance of 5 to 7% comparable growth.

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