ULTA Beauty (ULTA) 3Q16 Results: Beats Expectations; Raises FY16 Outlook

Executive Summary

• ULTA Beauty reported 3Q16 EPS of $1.40, ahead of the $1.37 consensus estimate, and up 26.1% year over year. Revenues rose 24.3% from the year-ago quarter to $1.13 billion, also beating the consensus estimate of $1.11 billion.
• Comp sales, including the impact from ecommerce sales, increased 16.7% year over year, beating the 14.8% consensus estimate. That growth was driven by an 11.1% gain in transaction volume and a 5.6% higher average ticket sale. Total ecommerce sales increased 59.1% year over year to $73.6%, contributing 240 basis points of the total company comp sales increase.
• ULTA Beauty raised its FY16 guidance and now expects EPS growth in the high 20% range versus previous guidance of mid-twenties percentage. The company projects comps to be up 13%–15%, versus previous guidance of 12%–14% and the 13.8% consensus estimate.