This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Ulta Beauty Announces Third Quarter 2012 Results

The Company did not utilize its credit facility during the nine month period ended October 27, 2012.

Store Expansion

During the third quarter, the Company opened 49 stores located in Arlington, TX; Bluffton, SC; Boca Raton, FL; Braintree, MA; Clearwater, FL; Columbia, SC (Cross Hill); Culver City, CA; Davie, FL; DeKalb, IL; El Cajon, CA; Florence, AL; Gainesville, FL; Garden City, NY; Grandville, MI; Hanover, PA; Houma, LA; Huntington Station, NY; Knoxville, TN; Lafayette, LA; Lee's Summit, MO; Lincoln, NE; Little Rock, AR; Livonia, MI; Logan, UT; Long Beach, CA; McDonough, GA; Medford, OR; Milford, CT; Napa, CA; Newport Beach, CA; Odessa, TX; Pensacola, FL; Puyallup, WA; Rib Mountain, WI; Richfield, MN; Rosenburg, TX; San Diego, CA (Mission Valley); Sandusky, OH; Seal Beach, CA; Solon, OH; Spartanburg, SC; Spring, TX; Springfield, PA; Stow, OH; Traverse City, MI; Warsaw, IN; Waukesha, WI; Westminster, CO and Winchester, VA and relocated one store in D’iberville, MS. In addition, the Company closed one store. The Company ended the third quarter with 537 stores and square footage of 5,703,197, which represents a 22% increase in square footage compared to the third quarter of fiscal 2011.

Outlook

For the fourth quarter of fiscal 2012, the Company currently expects net sales in the range of $742 million to $754 million, compared to actual net sales of $582.5 million in the fourth quarter of fiscal 2011. This assumes comparable store sales increase 5% to 7%, and includes the impact of Hurricane Sandy. Comparable store sales increased 11.5% in the fourth quarter of 2011.

Income per diluted share for the fourth quarter of fiscal 2012 is estimated to be in the range of $0.96 to $0.98. This compares to income per diluted share for fourth quarter of fiscal 2011 of $0.73.

For fiscal 2012, the Company plans to:

  • achieve comparable store sales growth of approximately 8%, assuming the midpoint of the guidance range for the fourth quarter, approximately 300 basis points above the high end of the Company’s long-term comparable store sales growth goal of 3% to 5%;
  • deliver earnings per share in the range of $2.64 to $2.66, including the negative impact of approximately $0.07 of income per diluted share associated with the accelerated new store program, the opening of the new Chambersburg distribution center and the planned expansion of prestige brand boutiques;
  • incur capital expenditures of approximately $180 million in fiscal 2012, compared to $129 million in fiscal 2011;
  • expand square footage by 23% with the opening of 101 net new stores;
  • remodel 21 locations; and
  • generate free cash flow.

Conference Call Information

A conference call to discuss third quarter results is scheduled for today, November 29, 2012, at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 705-6003. The conference call will also be web-cast live at http://ir.ulta.com and remain available for 90 days. A replay of this call will be available until 11:59 p.m. (ET) on December 6, 2012 and can be accessed by dialing (877) 870-5176 and entering conference ID number 403787.

About Ulta Beauty

Ulta Beauty is the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. Ulta Beauty provides affordable indulgence to its customers by combining unmatched product breadth, value and convenience with the distinctive environment and experience of a specialty retailer. Ulta Beauty offers a unique combination of over 20,000 prestige and mass beauty products across the categories of cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools, as well as salon haircare products. Ulta Beauty also offers a full-service salon in all of its stores. As of October 27, 2012, Ulta operates 537 retail stores across 45 states and also distributes its products through the Company’s website: www.ulta.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “plans,” “estimates,” or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation: the impact of weakness in the economy; changes in the overall level of consumer spending; changes in the wholesale cost of our products; the possibility that we may be unable to compete effectively in our highly competitive markets; the possibility that our continued opening of new stores could strain our resources and have a material adverse effect on our business and financial performance; the possibility that new store openings and existing locations may be impacted by developer or co-tenant issues; the possibility that the capacity of our distribution and order fulfillment infrastructure may not be adequate to support our recent growth and expected future growth plans; the possibility of material disruptions to our information systems; weather conditions that could negatively impact sales; and other risk factors detailed in our public filings with the Securities and Exchange Commission (SEC), including risk factors contained in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012. Our filings with the SEC are available at www.sec.gov . The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

 
 

Exhibit 1

Ulta Salon, Cosmetics & Fragrance, Inc.
Statements of Income
(In thousands, except per share amounts)
       
 
13 Weeks Ended 13 Weeks Ended
October 27, October 29,
2012 2011
(Unaudited) (Unaudited)
Net sales $ 505,640   100.0% $ 413,067   100.0%
Cost of sales   320,147   63.3%   263,884   63.9%
Gross profit 185,493 36.7% 149,183 36.1%
 
Selling, general and administrative expense 117,934 23.3% 100,997 24.5%
Pre-opening expenses   6,252   1.2%   3,958   1.0%
Operating income 61,307 12.1% 44,228 10.7%
Interest expense   39   0.0%   176   0.0%
Income before income taxes 61,268 12.1% 44,052 10.7%
Income tax expense   23,117   4.6%   17,284   4.2%
Net income $ 38,151   7.5% $ 26,768   6.5%
 
Net income per common share:
Basic $ 0.60 $ 0.44
Diluted $ 0.59 $ 0.42
 
Weighted average common shares outstanding:
Basic 63,484 61,451
Diluted 64,483 63,419
 
 

Exhibit 2

Ulta Salon, Cosmetics & Fragrance, Inc.
Statements of Income
(In thousands, except per share amounts)
       
 
39 Weeks Ended 39 Weeks Ended
October 27, October 29,
2012 2011
(Unaudited) (Unaudited)
Net sales $ 1,461,421   100.0% $ 1,193,640   100.0%
Cost of sales   937,391   64.1%   775,265   64.9%
Gross profit 524,030 35.9% 418,375 35.1%
 
Selling, general and administrative expense 334,917 22.9% 286,423 24.0%
Pre-opening expenses   12,901   0.9%   9,004   0.8%
Operating income 176,212 12.1% 122,948 10.3%
Interest expense   164   0.0%   496   0.0%
Income before income taxes 176,048 12.0% 122,452 10.3%
Income tax expense   68,031   4.7%   48,483   4.1%
Net income $ 108,017   7.4% $ 73,969   6.2%
 
Net income per common share:
Basic $ 1.71 $ 1.21
Diluted $ 1.68 $ 1.17
 
Weighted average common shares outstanding:
Basic 63,016 61,044
Diluted 64,285 63,173
 
Dividends declared per common share $ 1.00 $
 
 

Exhibit 3

Ulta Salon, Cosmetics & Fragrance, Inc.
Condensed Balance Sheets
(In thousands)
           
 
October 27, January 28, October 29,
2012     2012     2011
(Unaudited) (Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 191,724 $ 253,738 $ 130,657
Receivables, net 36,649 26,153 21,080
Merchandise inventories, net 462,833 244,647 354,891
Prepaid expenses and other current assets 50,197 43,430 40,223
Prepaid income taxes 13,417 505
Deferred income taxes   11,261       12,264       8,922
Total current assets 766,081 580,232 556,278
 
Property and equipment, net   467,165       376,985       373,794
Total assets $ 1,233,246     $ 957,217     $ 930,072
 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 185,177 $ 86,442 $ 134,043
Accrued liabilities 90,354 74,411 81,116
Accrued income taxes         4,002      
Total current liabilities 275,531 164,855 215,159
 
Deferred rent 202,265 163,463 161,023
Deferred income taxes   48,450       44,195       29,458
Total liabilities 526,246 372,513 405,640
 
Commitments and contingencies
 
Total stockholders’ equity   707,000       584,704       524,432
Total liabilities and stockholders’ equity $ 1,233,246     $ 957,217     $ 930,072
 
 

Exhibit 4

Ulta Salon, Cosmetics & Fragrance, Inc.
Statements of Cash Flows
(In thousands)
       
 
39 Weeks Ended
October 27, October 29,
2012     2011
(Unaudited)
Operating activities
Net income $ 108,017 $ 73,969
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 64,832 55,625
Deferred income taxes 5,258 (568)
Non-cash stock compensation charges 9,721 8,223
Excess tax benefits from stock-based compensation (41,343) (18,127)
Loss on disposal of property and equipment 430 612
Change in operating assets and liabilities:
Receivables (10,496) 1,212
Merchandise inventories (218,186) (136,375)
Prepaid expenses and other current assets (6,767) (7,433)
Income taxes 23,924 28,306
Accounts payable 98,735 46,950
Accrued liabilities 4,531 (1,385)
Deferred rent   38,802       26,451
Net cash provided by operating activities 77,458 77,460
 
Investing activities
Purchases of property and equipment   (144,030)       (97,695)
Net cash used in investing activities (144,030) (97,695)
 
Financing activities
Dividends paid (62,482)
Excess tax benefits from stock-based compensation 41,343 18,127
Stock options exercised 25,776 21,580
Common stock repurchased   (79)      
Net cash provided by financing activities   4,558       39,707
 
Net (decrease) increase in cash and cash equivalents (62,014) 19,472
Cash and cash equivalents at beginning of period   253,738       111,185
Cash and cash equivalents at end of period $ 191,724     $ 130,657
 
 

Exhibit 5

2012 Store Expansion

           
Total stores open at Number of stores Number of stores Total stores open
beginning of the opened during the closed during the at end of the
Fiscal 2012       quarter   quarter   quarter   quarter
1 st Quarter 449 18 0 467
2 nd Quarter 467 22 0 489
3 rd Quarter 489 49 1 537
 
 
Gross square feet Gross square feet
Total gross square for stores opened for stores closed Total gross square
feet at beginning or expanded during during the feet at end of the
Fiscal 2012       of the quarter   the quarter   quarter   quarter
1 st Quarter 4,747,148 202,706 0 4,949,854
2 nd Quarter 4,949,854 238,274 0 5,188,128
3 rd Quarter 5,188,128 525,203 10,134 5,703,197




3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7870 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs