Earnings Preview: Ulta Salon, Cosmetics, & Fragrance (ULTA)

Ulta Salon, Cosmetics & Fragrance, Inc.

is currently higher on the session by 2.20%, trading at $22.75. The company is scheduled to report earnings September 2nd, after the closing bell. • Estimates The Street is looking for Q2 earnings per share of $0.18on revenue of $314.86 million. These estimates have risen by $0.03 (+16.67) over the past 90 days. The Whisper number for ULTA is $0.21. • Guidance The Street is looking for Q3 EPS of $0.16 on revenue of $324.87 million. The full year 2011 estimates are $0.97 per share on revenue of $1.41 billion; FY 2012 is at $1.22 per share on revenues of $1.63 billion. • Technical Picture ULTA has been in rally mode since March of 2009, when it was trading $4.11; since entering 2010 though, the rally has been moderating. This has pushed the stock into a trading range with ~$24.00 on the topside and ~$22.00 on the downside. Note that the 18-day and 50-day moving averages have flattened and begun to push lower, though, which will begin to put pressure on shares. The Bollinger Bands are also on the verge of making a tilt downward. • Volatility Both historical volatility and implied volatility have been down-trending over the past few months after a spike higher in mid-May. Currently HI is at 48% and IV is at 57%. The front month $22.50 straddle is trading at 66.61%; the October $22.50 straddle is trading at 52.13%. Volatility is skewed notably to the call side. Ulta Salon, Cosmetics & Fragrance, Inc. is a beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. The company offers a combination of over 21,000 prestige and mass beauty products organized by category in bright, open, self-service displays to encourage its customers to play, touch, test, learn and explore. It offers a full-service salon and a range of salon haircare products in all of its stores. Its typical store is approximately 10,000 square feet, including approximately 950 square feet dedicated to its full-service salon.