ULTA Salon Cosmetics & Fragrance Inc. (NYSE:ULTA) may not be a household name, but its stock is set to roar higher. The company’s stores offer an assortment of branded and private label beauty products in cosmetics, fragrance, haircare, skincare, bath and body products, and salon styling tools. The company’s cosmetics include products for the face, eyes, cheeks, lips, and nails. Its haircare products comprise shampoos, conditioners, styling products, and hair accessories.
It also offers salon styling tools, such as hair dryers, curling irons, skincare products, and bath and body products, which consist of products for the face, hands, and body. It offers a complete line of fragrances and also provides nail polish and nail care products. Finally, it also offers candles, home fragrance products, and other health and beauty products. It operates just under 700 retail stores in 46 states. It also operates full-services salons in its stores, offering haircuts, hair coloring, and permanent texture, as well as facials and waxing, not to mention it distributes its products through its website, ulta.com. The stock is set to rocket higher on the back of incredible earnings and guidance.
In its first quarter, net sales increased 22.5 percent to $713.8 million from $582.7 million in the first quarter of fiscal 2013. Comparable store sales increased 8.7 percent compared to an increase of 6.7 percent in the first quarter of fiscal 2013. Its e-commerce comparable sales grew 72.3 percent, representing 190 basis points of the total company comparable sales increase of 8.7 percent. One small negative was that gross profit decreased 50 basis points to 34.5 percent from 35 percent in the first quarter of fiscal 2013, primarily driven by product and channel mix shifts, converting the remaining 50 percent of the loyalty program members to the ULTAmate Rewards program, and deleverage of fixed store costs resulting from a large number of new stores in the portfolio.