Ulta Beauty earnings jump 30% but outlook misses

Ulta Beauty’s second-quarter earnings topped forecasts, but the beauty retailer’s third-quarter guidance disappointed analysts.

Net income increased 29.9% to $148.3 million, or $2.46 a share, in the quarter ended Aug. 4, up from $114.2 million and $1.83 a share in the year-ago period. Analysts expected earnings of $2.41 a share

Net sales increased 15.4% to $1.488 billion, compared to $1.289 billion million last year. Analysts had expected sales of $1.49 billion.

Same-store sales increased 6.5%, driven by 3.1% transaction growth and 3.4% growth in average ticket.

E-commerce sales increased 37.9% to $132.8 million, compared to $96.3 million in the year-ago period.

“The Ulta Beauty team delivered a strong performance in the second quarter, reflecting rapid growth in prestige boutique brands, mass cosmetics, skin care and fragrance, offset by continued moderation in the growth rates of a few of our large color cosmetics brands,” said Mary Dillon, CEO. “Our flexible business model continues to support healthy retail comps, excellent new store productivity, and high growth for, resulting in significant market share gains across categories.”

The retailer’s third-quarter forecast did not meet analysts’ expectations. It projects earnings of $2.11 to $2.16 a share on revenue of $1.55 billion to $1.563 billion. Analysts were forecasting earnings of $2.31 a share on sales of $1.545 billion.