"Ulta Beauty is the largest U.S. beauty retailer and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products and salon services."
Over the past 10 years, Ulta has grown at the following rates (per share Valueline figures):
- Sales: 18.5%
- Cash flow: 41%
- EPS: 34%
Over the past 5 years, it has slowed a bit:
- Sales: 22.5%
- Cash Flow: 26.5%
- EPS: 27%
ROIC has climbed steadily and is now 33%
Ulta shares are down almost 30% today after missing Q2 2019 earnings and lowering 2019 guidance. They are now guiding:
- 9-12% sales growth
- 4-6% same store sales (mostly traffic)
- $11.86 to $12.06 EPS
- EPS growth is 9% at the mid-point
Shares are currently selling for $239
- 22x 2018 EPS
- 20x 2019e (midpoint)
Ulta has no debt (other than operating leases which are now on balance sheet)
Ulta is now using a significant portion of it's net income to repurchase shares (over 100% YTD)
Despite the high growth, FCF seems extremely high (97% in 2018)
I just started looking into Ulta this afternoon, but it looks like an incredible business selling at a modest premium to the market. Am I missing anything?
Edit: Typo in original. Comps are mostly transactions not ticket.