Out Fox The $treet

While reviewing Ulta Beauty (NASDAQ: ULTA ) , the constant realization is that the company has no comparable competition. The beauty sector is a massive industry yet the majority of the products are sold via direct marketers, department stores, or drug stores. Neither group offers a focused, easy to visit store format. For a consumer that wants quality products, they previously had to travel to a distant mall. Enter Ulta Beauty into more » Disclosure: No positions mentioned. Please read the full disclaimer page for more details. 

Remaining an investor in Ulta Beauty (ULTA) has to be akin to playing Russian roulette. Prior to earnings the company was trading at nearly 28x next year's estimates of $3.14. No indications exist that Ulta will have a massive blowup similar to fellow retailers Fossil (FOSL) and Body Central (BODY) or any of the numerous stocks that plunged 20, 30, or even 40% during earnings. Of course, neither of those stocks showed signs of weak results ahead of plunges either. Considering Ulta trades at a lofty multiple, any whiff of disappointing numbers could result in a significant drop. Good Enough After the close on Tuesday, Ulta reported Q113 numbers that slightly exceeded estimates. Net sales hit $474.1M, which only slightly exceeded the $473M estimates. Earnings also beat by $.01. Read the full article at Seeking Alpha. Disclaimer. No positions mentioned. Please review the disclaimer page for more details. 

After the close Thursday, Ulta Beauty ( ULTA )  announced earnings  that easily surpassed estimates. Earnings came in at $.38 versus estimates of $.32 and 72% higher than last year on only a 22.6% increase in revenue. Revenue beat due to very strong comps of 11.3% over 2010. ULTA appears to be firing on all cylinders with gross margins up 170 basis points and inventory per square foot down over 1%. The ability to grow revenue while decreasing inventory suggests superb inventory controls. Read full article at Seeking Alpha.  Disclosure: Long DKS. Please read the disclaimer page for more details.