Solid topline, margin pressure from investments
Ulta reported Q2 EPS of $2.46 versus consensus $2.41 with a comp 6.5% in line with expectations and guidance of 6-7%. Given the string of beats recently seen from the retail sector, there may have been some disappointment with the lack of a bigger beat. The fundamentals are strong, however, and Ulta continues to invest strategically, which will likely constrain bigger earnings beats in the near-term, but these investments make Ulta a good long-term holding.Ulta Beauty is a beauty retailer that provides cosmetics, fragrance, skin care products, hair care products, and salon services. The company's stores are primarily located in locations such as power centers. The company provides a range of services in all of its stores. The company's stores, website, and mobile applications provides more than 25,000 products from approximately 500 beauty brands across all categories and price points, including its own private label, the Ulta Beauty Collection. The company provides a portfolio across five primary categories: cosmetics; skincare, bath and fragrance; haircare products and styling tools; salon services; and other, which includes nail products and accessories.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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