Executive Summary

• Ulta Beauty reported 1Q16 EPS of $1.45 versus the consensus estimate of $1.29.
• Total revenue was $1.07 billion versus consensus of $1.03 billion. Sales benefited from healthy consumer demand in the beauty category as well as from the company’s unique format and offering. Comps increased by 15.2%, driven by 11.0% growth in traffic and 4.2% growth in average ticket.
• Management provided 2Q16 EPS guidance of $1.32–$1.37 versus consensus of $1.40. Total revenue is expected to be $1.04–$1.06 billion versus consensus of $1.03 billion. Comps are expected to increase by 11%–13%. Full-year guidance now calls for comp growth of 10%–12%, up from 8%–10% previously. EPS growth is expected to be in the low-20% range compared to prior guidance of 18%–20%.