Ulta Beauty (ULTA), Coty (COTY) stocks rally after quarterly sales jump

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Ulta Beauty (ULTA), Coty (COTY) stocks rally after quarterly sales jump

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 Ulta Beauty (ULTA), Coty (COTY) stocks rally after quarterly sales jump
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Highlights

  • The net sales of Ulta Beauty, Inc. (NASDAQ: ULTA) rose 60.2% YoY.
  • ULTA stock soared more than 38% year-to-date.
  • The net revenue of Coty Inc. (NYSE: COTY) soared 89.6% YoY in Q2.

The stocks of Ulta Beauty, Inc. (NASDAQ: ULTA) and Coty Inc. (NYSE: COTY) were up around 6% on Thursday following their strong quarterly results.

Ulta reported quarterly earnings on Wednesday after markets closed, while Coty reported on Thursday. Both the stocks were trending on Wall Street after the strong quarterly performance.

ULTA stock was priced at US$413.50, up 6.05 percent from the previous close, at 8:53 am ET, while COTY stock was trading at US$8.6899, up 5.59 percent at 8:54 am ET.

Ulta has upgraded its earnings forecast for fiscal 2021, while Coty Inc expects sales growth in FY22 in the low teens.

Let’s look at the quarterly performance of the two companies.

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Ulta Beauty, Inc. (NASDAQ: ULTA)

Ulta Beauty is a leading American cosmetics store chain headquartered in Illinois. Ulta’s net sales surged to US$1.96 billion, a 60.2 percent jump YoY, in Q2, 2021. In the year-ago quarter, the net sales were US$1.22 billion. The company’s gross profit was US$798 million against US$329.0 million in the prior year’s quarter.

In addition, the beauty retailer logged an operating income of US$332.3 million compared to US$12.8 million in the year-ago period. Its net income was US$250.9 million, or US$4.56 per diluted share, compared to US$8.1 million, or US$0.14 per diluted share, in Q2 2020.

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The Illinois-based company has a market cap of US$21.34 billion, a P/E ratio of 45.39, and a forward P/E one year of 31.34. Its EPS is US$8.59. The ULTA stock rose 38.03 percent YTD.

The stock’s 52-week highest and lowest prices were US$378.10 and US$200.50.

Ulta raised its fiscal 2021 earnings forecast to around US$8.1 billion to US$8.3 billion from its earlier expectations of US$7.7 billion to US$7.8 billion.

Source: pixabay

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Coty Inc. (NYSE: COTY)

Coty is another major beauty company headquartered in New York and has global operations.

Coty’s net revenue jumped 89.6 percent YoY to US$1.06 billion, including an 8.9 percent impact from foreign exchange, in Q4 of 2021. Its gross margin increased to 60.4 percent in Q4, 2021, from 40 percent in the same quarter of the previous year.

The operating income was US$1.8 million compared to an operating loss of US$920.5 million in the year-ago quarter. The beauty retail company logged a net loss of US$221.1 million in the quarter against a net loss of US$696.2 million in the prior year’s Q4.

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The New York-based company has a market cap of US$6.30 billion and a forward P/E one year of 137.17. Its EPS is US$-1.15. The COTY stock jumped 21.75 percent YTD.

The stock’s 52-week highest and lowest prices were US$10.49 and US$2.65.

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The company expects its FY22 sales growth in the low teens. It also expects an adjusted EBITDA of US$900 million on a constant currency basis, indicating a strong margin YoY.

Bottom Line:

Retail stocks have seen robust sales and earnings growth in the last quarter, boosted by a substantial rise in consumer spending. In addition, the government stimulus package, jobs growth, and the overall improvement in the economy helped the sector bounce back.

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