This March 1, 2011 photo shows a customer walking down the bread and pastry aisle at a Kroger Co. supermarket. The Kroger Co. reported a second-quarter profit that beat Wall Street expectations, Friday, Sept. 7, 2012, as the supermarket operator said its loyalty program helped lift a key sales figure. The nation's largest traditional grocery store chain also raised its outlook for the year. (AP Photo/Al Behrman)
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This March 1, 2011 photo shows a customer walking down the bread and pastry aisle at a Kroger Co. supermarket. The Kroger Co. reported a second-quarter profit that beat Wall Street expectations, Friday, Sept. 7, 2012, as the supermarket operator said its loyalty program helped lift a key sales figure. The nation's largest traditional grocery store chain also raised its outlook for the year. (AP Photo/Al Behrman)
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Ten shares fell after the struggling broadcaster completed part of a $230 million capital raising.
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In this Thursday, Sept. 22, 2011, photo, employees at Groupon pose in silhouette by the company logo in the lobby of the online coupon company's Chicago offices. Groupon Inc., the No. 1 online deals service, failed to show investors on Thursda, Nov. 8, 2012, that its business is growing as quickly as they would like, as it was hurt by what it called "continued challenges" from the economic weakness in Europe. (AP Photo/Charles Rex Arbogast)
Ahead of Bell: Ulta Salon, Cosmetics & Fragrance
NEW YORK (
AP) — An analyst lowered his price target for
Ulta Salon, Cosmetics & Fragrance Inc. on Friday, citing the company's weaker-than-expected first-quarter forecast.
Shares fell nearly 13 percent in premarket trading.
On Thursday the beauty products retailer said that it expects first-quarter earnings between 60 and 63 cents per share on revenue in a range of $568 million to $577 million. Analysts polled by FactSet predicted earnings of 72 cents per share on revenue of $578.9 million.
For the full year, the Bolingbrook, Ill., company expects its earnings per share growth, on a 52-week basis, will come in at the low-end of its 25 percent to 30 percent long-term target. It attributed the forecast partly to the cost of a number of projects slated for the year. Ulta plans to add more Clinique boutiques, upgrade its warehouse management systems and redesign its online business.
Ike Boruchow of Sterne, Agee & Leach cut Ulta's price target to $90 from $102 on the softer-than-expected outlook.
The company's stock dropped $10.97, or 12.4 percent, to $77.40 before the market open on Friday. Its shares have traded in a 52-week range of $78.87 to $103.52.
But Boruchow said in a client note that he believes that Ulta's long-term growth plans are still intact. Even though the company is facing near-term margin issues, Boruchow said that it is still one of the most appealing long-term growth stories in retail because of its store base, sizable market share opportunity and unique business that combines the prestige, mass and salon distribution channels.
The analyst reaffirmed a "Buy" rating.
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