Why Ulta Salon (ULTA) Will Soar on Friday

NEW YORK (TheStreet) -- Ulta Salon, Cosmetics & Fragrances (ULTA) is setting up for solid gains in pre-market trading Friday after posting a better-than-expected fourth quarter after the bell a day earlier. 

Before markets opened, shares had added 6.1% to $95. 

The beauty supplies retailer reported positive sales growth over the quarter, even as others in the retail space suffered from challenging weather, deeper discounting and consumers' reluctance to spend. 

Bolingbrook, Ill.-based Ulta said revenue climbed 14.4% higher year over year to $868.08 million, compared to estimates of $855.64 according to averages compiled by Thomson Reuters

Comparable sales increased 9.2% compared to an 8.6% gain in the year-ago quarter.

Net income of $1.09 a share jumped 9% compared to the year-ago quarter and beat estimates by 2 cents a share. 

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TheStreet Ratings team rates ULTA SALON COSMETCS & FRAG as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate ULTA SALON COSMETCS & FRAG (ULTA) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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