The 2018 first quarter report of Ulta has pushed it to climb the charts even more. In addition, the company and its strategic efforts, impressive marketing approach, and store-growth initiatives have driven and increased its very impeccable results.

With all these being said, Ulta shares are up by 2.5% since May 31, just a few days after it has released its quarterly results. It has outperformed the industry’s 10.2 upsides with its 21.9% advancement and continues to be one of the most promising stocks as it ranks #3 in Zacks.

In addition to all these, most of the analysts are growing bullish on Ulta due to its obvious solid uptrend as far as earnings estimates are concerned. Zacks Consensus Estimate of $10.92 for the year 2018 and $12.76 for 2019 increased 16 cents and 2 cents in the past 30 days. Also, the company’s long-term earnings growth rate of 18.6% and VGM Score of A is something that deserves an applaud.

Solid Results in Quarter 1 and a Surprising Trend

The earnings and revenue history of Ulta Beauty is full of surprises. During the first quarter of 2018, it was able to revert the three-year-long positive trend of earnings after missing out in its preceding quarter. One of the good news that this stock has brought to us it was able to beat 16 out of 18 quarters in the past few years. Certainly, there is an improvement annually and this fueled by the improved market share gains, the impact of the loyalty programs and the solid e-commerce business as well as its growth initiatives.

The company also has a very impressive strategy in balancing online engagement and physical store performances. With its e-commerce sales, it was able to turn a total of 48% growth during the first quarter of 2018. This upside is also driven by 38% traffic growth and 52% traffic surge in mobiles. In fact, the company is targeting 40% growth for the entire fiscal year of 2018.

Company Initiatives

As what we have already established earlier, the loyalty program of the company has significantly contributed to the positive results of the company. It truly has boosted the profitability and the top line of the entire company. The loyalty program offered by Ulta Beauty is one of the leading drivers for its best results for the quarter 1 of this year.

Aside from this loyalty program, the company also has taken initiatives in increasing the value they offer to their members through their Ultimate Rewards system. This has brought them a 17% increase in membership and patronage. Also, the sales per member, retention rates, and the shopping frequency of consumers have turned the first quarter of 2018 a solid one.

Aside from increasing the value of services they offer to their customers, Ulta Beauty also worked hard for its expansion plans to be realized. This year, it is already on its way in opening its 100^th store. This is for them to reach out to more patrons and consumers all over the region, if not the whole world.
Being the one-stop shop for beauty and salon products, Ulta Beauty has managed to create a niche market by the solid mix of beauty products. Aside from the variety of products they offer, they make sure that patrons can get quality products in a discounted amount plus the benefit of other services which can all be found in one roof. There is no need to look for other places because everything that you need is already here.

A Wrap-up

Although the high SG&A and pre-opening expenses have made the company wrestle with soft margins. It is still possible that Ulta Beauty is capable of offsetting these margin declines with its impressive marketing strategies.

This article was written by @valerie15 and edited by @flashfiction. This article can be found on PROFITRIBES.

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