Ulta Salon (ULTA) Growth Looks Impressive, Says Goldman Sachs

Goldman Sachs maintained a Buy rating on ULTA Salon (NASDAQ: ULTA) with a modified price target of $115.00 (from $118.00). Comments follow Q2 results. Analyst Matthew J. Fassler thinks "big picture growth is intact."

"ULTA’s 1Q results reinforced its resiliency in a tough backdrop, with some of the strongest sales and EPS growth in our coverage," said Fassler. "EPS of $0.77 vs. $0.65 a year ago represented 19% growth, on +8.7% SSS. SSS beat our 7.0% and guidance of 5%-7%, while EPS beat our $0.76, the Street’s $0.74, and guidance of $0.70-$0.75. We would not make too much of the beat per se as gross profit dollars actually missed our estimate (while slightly beating the Street’s) and upside to EPS related to deferred SG&A investment that is likely to materialize later this year. Still, the topline trends and overall growth looked impressive."

"Beyond the results, management helped clear up concerns that had developed over the quarter by indicating that growth from a nascent 5,000 square foot prototype is incremental to its 1,200 store 10K format target, suggesting that guidance is beatable if the environment remains stable, and reiterating a mid-teens long-term EBIT margin target," he added.

For an analyst ratings summary and ratings history on ULTA Salon click here. For more ratings news on ULTA Salon click here.

Shares of ULTA Salon closed at $85.31 yesterday.

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