Ultra beauty Inc. (NASDAQ: ULTA) announced its Q4 2021 and full year 2021 earnings and revenue results on Thursday, March 10, 2022, which topped estimates.
What to look for: The company reported exceptional results during the quarter, which reflects excellent business-wide execution versus Q4 plans and more robust customer demand thanks to the company’s differentiated strategy.
Earnings: Stockearning’s Estimated EPS was pegged at $4.61 per share, but the company produced actual EPS of $5.41 per share. A year ago, the company had adjusted EPS of £3.41 per share. The Q4 2o21 earnings represent an earnings surprise of 17.35%. In the last quarter, the beauty products retailer was expected to produce earnings of $2.52 per share but delivered earnings of $3.94 per share, representing a surprise of 56.97%. For Fully fiscal 2021, the company had diluted EPS of $17.98 attributed to tax-based compensation compared to $3.11 per share a year ago. Historical EPS Performance shows that the company has in the past 12 quarters topped estimates 31 times (86) and missed four times (11%).
Revenue: In the fourth quarter of 2021, ending January 2022, the company had revenue of $2.73 billion, beating estimates for $2.69 billion and up from $2.2 billion a year ago. Net sales in FY 2021 were $8.6 billion representing a 40.3% increase from last year's $6.2 billion. The increase improved consumer confidence, easing COVID-19 restrictions and government stimulus a year ago. In addition, same-store sales increased 37.9% in 2021 compared to $17.9% a year ago, driven by 30% transaction and 6% average ticket increases.
Stock movement: ULTA shares have lost 2.7% since the company released its last earnings release. Interestingly, following the earnings release, the company's shares have been UP 30 times in the past 48 quarters. So, the historical price reaction suggests a 62% probability of the share price going UP following the earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-8%, while the predicted volatility on the seventh day is +/-9%.
Analysts are saying: That Piper Sandler’s Korinne Wolfmeyer commenced coverage on the stock with a Buy rating and a price target of $475.
Raymond James analyst Olivia Tong slashed the stock’s price target from $485 to $450 but kept a Buy rating on the shares. Tong expects the company to have a solid quarter and estimated 20% YoY comp sales growth driven by 7% growth in tickets and a 13% increase in transactions.
JPMorgan analyst Christopher Horvers added Ultra Beauty to the research firm's Analyst Focus Lists as a growth idea considering the shares pull back. The analyst says that the company remains in the "re-open phase" due to the rebound in prestige cosmetics. He maintains a Buy rating on the stock with a price target of $460.
DA Davidson analyst Michael Baker raised his price target on the stock from $445 to $500 and maintained a Buy rating on ULTA as part of a wider research note in Retailing/Broadlines and Hardlines category under his coverage. He stated that although he is not making a material change in his projections, his price target raises reflect the forward roll in valuation for 2023.
Related News
Kroger Co (NYSE: KR) Beats Q4 2021 Earnings and Revenue Estimates.
Hibbet Sports Inc. (NASDAQ: HIBB) Earnings Expectations, Fiscal Q4 2022 EPS of $1.22.