Zacks Analyst Blog Highlights: Ulta Salon, Cosmetics & Fragrance, Jamba, Pall, Starbucks and Green Mountain Coffee Roasters

Mar 14, 2011, 10:05 ET from Zacks Investment Research, Inc.

CHICAGO, March 14, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: Ulta Salon, Cosmetics & Fragrance Inc. (Nasdaq: ULTA), Jamba Inc. (Nasdaq: JMBA), Pall Corporation (NYSE: PLL), Starbucks Corp. (Nasdaq: SBUX) and Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR).

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Here are highlights from Friday's Analyst Blog:

Ulta Beats Estimates

Ulta Salon, Cosmetics & Fragrance Inc. (Nasdaq: ULTA) posted fourth-quarter 2010 adjusted earnings of 48 cents per share, which surpassed the Zacks Consensus Estimate of 44 cents as well as the year-ago quarter earnings of 34 cents. Including one-time compensation charges, Ulta Salon recorded a quarterly net income of $30.1 million or 49 cents per share.

Net Sales in the quarter under review hiked 19.5% year over year to $473.7 million and was also above the Zacks Consensus Estimate of $467.0 million. The increase was driven by a rise in comparable store sales, which escalated 10.4% from 6.2% reported in the prior-year quarter. Management pointed out that the enhancement was spread across all major categories and generated this marked improvement in results, amid a sluggish economic recovery, based on dynamic marketing initiatives and renowned brands strategies implemented in 2009.

The company's full-year income was $71.0 million or $1.16, compared with $39.4 million or 66 cents per share in fiscal 2009. Total revenues in fiscal 2010 were $ 3.4 billion, up 19% year over year due to higher same-store sales (up 11%).

Jamba Reports Loss, Misses Estimate

Jamba Inc. (Nasdaq: JMBA), the leading restaurant retailer of food and beverage offerings, reported fourth quarter 2010 loss of 21 cents per share, which missed the Zacks Consensus Estimate of loss of 15 cents, but was better than the prior-year quarter loss of 23 cents per share. The company reported loss as a result of decline in the top line along with the charges incurred from restaurant closures and refranchising of company-owned stores.

The top line of the company continues to struggle, as consolidated revenues fell 16.8% year over year to $42.1 million, which was above the Zacks Consensus Estimate of $39.0 million. The revenue declined due to lower operating income at company-owned restaurants.

The company's full-year net loss was $16.7 million or 35 cents per share compared with a loss of $23.9 million or 48 cents in fiscal 2009. Revenues dropped 12.9% year over year to $262.7 million in full fiscal 2010.

Sales at company-operated restaurants were down 19.4% year over year to $39.8 million due to a reduction in the number of restaurants in operation at the end of the quarter compared with the prior-year quarter. However, Franchise and other revenues grew 90.0% to $2.2 million, fueled by an increase in the number of franchise stores.

Pall Corp. Beats Estimates

Pall Corporation (NYSE: PLL) recorded a strong second-quarter fiscal 2011 results, reporting earnings per share from continuing operations of 64 cents, above the Zacks Consensus Estimate of 57 cents. On a year-over-year basis, earnings per share were up 52%.

Revenue

Total revenue in the quarter increased by 15.1% year over year to $645.2 million, including negative impact from foreign currency translation of 0.6%. The revenue reported by the company was above the Zacks Consensus Estimate of $607 million.

Segment wise, the company's revenue in Life Sciences segment climbed by 14.0% in local currency to $334.2 million and in Industrial segment was up 17.7% in local currency to $311.0 million.

Outlook

For fiscal 2011, the company expects pro forma EPS to be in the range of $2.80 to $2.90, including benefit from foreign currency translation of $0.09.

With a well laid off growth plans and increasing demand for its technologies, Pall Corporation is well positioned to derive significant benefit as the economic conditions continues to strengthen. The company enjoys above-average financial returns and reasonable growth prospects as it leverages its highly engineered technology, reliable global distribution, high share in market niches, long and close working histories with customers, few competitors and solid product quality supplemented by technical service.

Pall's Aeropower business derives significant benefit from the emerging markets, particularly in Asia.  Key drivers include increasing passenger air miles flown, a ramp-up in US military budgets, new military and commercial aircraft, and demand for new aircraft and mobile construction equipment. In the long run, Pall will likely benefit from several secular trends, such as global infrastructure growth, increasing demand for water filtration systems and continued steady growth in the medical and pharmaceutical markets.

However, changes in product mix and product pricing may impact the company's operating results, particularly with the expansion of the systems business. In which the company experiences significantly longer sales cycles in systems business with less predictable revenue and no certainty of future revenue streams from related consumable product offerings and services.

Starbucks Coffee in Keurig Cup

Starbucks Corp. (Nasdaq: SBUX) entered into a deal with Keurig brewer parent Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR). As per the deal, Starbucks will distribute its coffee and Tazo tea in Keurig's K-Cup portion packs. The K-Cup portion packs will be available at supermarkets, wholesale clubs, drug stores and departmental stores throughout the U.S. and Canada.

The pact further boosts Starbucks goal of expanding its single-cup coffee product line. It will become the exclusive, licensed super-premium coffee brand for the Vermont-based Green Mountain Coffee Roasters' Keurig single-cup coffee system. For the already existing owners of Keurig Single-Cup brewer, the new relationship will provide an additional choice for Starbucks branded super-premium coffees.

According to the company sources, the deal will enable Starbucks to capture the untapped market of single-cup brewer and will enable more than 80% of the American household to enjoy perfectly brewed single-cup Starbucks coffee at home.

The number of stores through which these packs will be distributed is not yet determined. Starbucks has 11,158 company-operated and licensed outlets in the U.S.

The stock price of both the companies soared as soon as the news of the deal came out. The share price of Starbucks went up 9.93% to $37.97 and that of GMCR by 41.41% to $61.71. Later, the market corrected itself and the share price of Starbucks went down marginally by 0.82% and closed at $37.66.

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