Improved results makes Ulta attractive to investors
Currently shares are trading at around the $23 mark, approaching a 52-week high. The reason why investors are backing the share is that the company has continued to post improving results throughout 2009, despite exceptionally tough market conditions.
On March 11 the company announced that its fourth quarter sales increased by 16.1 percent to $396.4m, while net income increased by 64.6 percent to $20.2m, figures that were driven by increased cost efficiencies and underlying sales growth.
The results topped off a strong year for the company during which CEO Lyn Kirby claims the company managed to beat all of its core objectives for the year set out at the end of 2008.
All core objectives surpassed
Only the first quarter of 2009 proved to be weak for the company, when sales fell by 2.3 percent on the back of slow retail market conditions throughout North America.
The company has been able to take advantage of its positioning as a discount beauty retailer during the current economic crisis in the United States, profiting from an increase in the number of consumers down-grading from prestige to cheaper products.
According to Kirby, the company’s core objectives were growing profitable market share, achieving permanent cost efficiencies and securing increased cash flow to the business.
Optimistic outlook for 2010
“As we begin fiscal 2010, we continue to build on our successful 2009 game plan,” said Kirby. “We are particularly optimistic about our opportunities for market share gains through comparable stor sales growth and new store expansion.”
Net sales for the full year 2009 increased by 12.7 percent to $1.22bn, while net income increased 55.8 percent to $39.4m, a performance that Kirby says is expected to be repeated in the fiscal 2010 year.
Ulta sells a range of prestige cosmetic and toiletry brands, alongside a number of its own-brand products through its own online channel, together with dedicated stores and salons throughout the United States.
