Ulta Beauty Stock Soars As Q2 Profit Surges

(RTTNews) - Ulta Beauty (ULTA) Thursday said its profit for the second quarter surged over 35 percent, due mainly on higher sales and operating margin, while surpassing Wall Street estimates comfortably.

The beauty products retailer provided strong sales guidance for the third quarter and lifted its expectations for the full year.

Ulta Beauty also laid the contours of a long-term strategic plan, with focus on e-commerce sales, new store openings and improving guest loyalty programs.

"A significant improvement in traffic, successful new product and brand launches, and rapid e-commerce growth drove better than expected top line performance," said CEO Mary Dillon in a statement.

Ulta Beauty shares soared 12 percent in after-hours trade on the Nasdaq, following the announcement of results.

Ulta Beauty, based in Bolingbrook, Illinois, posted second quarter net income of $60.8 million or $0.94 per share, compared with $44.9 million or $0.70 per share last year.

On average, 18 analysts polled by Thomson Reuters expected earnings of $0.83 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter climbed 22.2 percent to $734.2 million from $601 million in the prior year. Fifteen analysts had a consensus sales estimate of $713 million for the quarter.

Same-store sales for the quarter rose 9.6 percent.

Operating margin for the quarter climbed to 13.3 percent from 12.1 percent last year.

For the third quarter, Ulta Beauty projects earnings of $0.79 to $0.84 per share, sales of $724 million to $736 million and same-store sales growth of 6 percent to 8 percent. Analysts currently expect earnings of $0.83 per share on sales of $717.46 million for the quarter.

For fiscal year 2014, the company now expect same-store sales growth of 7 percent to 8 percent, and increase in total sales as well as earnings per share in the 20 percent range.

Earlier, the company expected same-store sales growth of 4 percent to 6 percent, and total sales and earnings per share to grow in the mid-teens percentage range.

Analysts currently expect sales growth of 17.8 percent for the year.

Ulta Beauty said its strategy for the long term will focus on acquiring new guests and deepening loyalty program; delivering exemplary services in core areas of hair, skin and brows; expanding stores and e-commerce, among other initiatives.

The company also announced five year financial targets, projecting annual same-store sales growth of 5 percent to 7 percent, earnings per share growth in the 20 percent range, and open 100 stores a year.

ULTA closed Thursday at $97.48, up $0.70 or 0.72%, on a volume of 2 million shares. In after hours, the stock gained $12.30 or 12.62% at $109.78. In the past year, the stock traded in the range of $80.35 to $132.72.