Ulta Salon Cosmetics & Fragrance Inc.’s fiscal third-quarter earnings climbed 68%, as the beauty-products retailer beat its upbeat guidance across the board.
Shares were up 2.5% at $36.62 in after-hours trading as Ulta also forecast fourth-quarter earnings of 40 cents to 42 cents a share on revenue of $447 million to $456 million. Analysts’ average estimates were 39 cents and $451 million, respectively, according to Thomson Reuters. Ulta also predicted same-store sales would increase 4% to 6% on top of 6.2% growth a year earlier.
Chief Executive Chuck Rubin said the company was pleased with its positioning heading into the holiday season.
In the most recent period, same-store sales increased 12%, beating the company’s September prediction for 7% to 9% growth.
Ulta, which went public right before the onset of the recession, has nonetheless posted top-line growth and strong profit since then. As such, the stock has more than doubled this year.
The company’s strategy this year has been to be more efficient and increase profitable market share, which includes plans for new-store expansion. Ulta opened a record 30 new stores and closed two during the quarter, ending with 384.
For the quarter ended Oct. 30, Ulta’s profit rose to $14.2 million, or 23 cents a share, up from $8.5 million, or 14 cents a share, a year earlier. The latest results included a 2-cent compensation charge. Revenue jumped 19% to $339.2 million.
The company in September predicted earnings of 18 cents to 20 cents on revenue of $324 million to $330 million, upbeat compared with analysts’ views then.
Gross margin rose to 35.1% from 32.3%.