ULTA Expects Healthy Square Footage Growth And FCF This Year
Analysts at Oppenheimer & Co reiterate their "outperform" rating on Ulta (NASDAQ: ULTA), while raising their estimates for the company. The target price for ULTA has been raised from $23 to $25.
ULTA posted its fiscal 4Q results well ahead of the expectations, driven by 6.2% SSS growth. Ulta also announced impressive guidance for 1Q, as it anticipates healthy square footage growth and FCF this year. According to Oppenheimer & Co, “For fiscal 2010, ULTA anticipates adding 46 new stores, representing a 13% increase in square footage, as well as remodeling 13 stores and relocating six stores where the company believes it has an opportunity to upgrade real estate. Longer term, however, management believes its annual square footage growth can return to 15-20%.”
“We are taking this opportunity to introduce our fiscal 2011 EPS estimate of $1.05, which is based on 3.0% same-store sales growth, 50 bps of gross margin expansion, to 31.8%, and 70 bps of operating margin expansion, to 6.9%,” the analysts add.
Oppenheimer has raised its EPS estimate for 2010 from $0.75 to $0.85.
