(RTTNews) – Ulta Salon, Cosmetics & Fragrance Inc. (ULTA), Thursday reported an increase in third-quarter profit, driven largely by a double-digit sales growth. However, shares of the beauty products retailer slipped 5 percent in extended hours on weak earnings outlook for the current quarter.
Bolingbrook, Illinois-based Ulta Salon’s third-quarter profit rose to $131.2 million or $2.18 per share from $104.6 million or $1.70 per share last year. On average, 25 analysts polled by Thomson Reuters estimated earnings of $2.16 per share for the quarter.
Ulta Salon’s third-quarter sales rose 16.2 percent to $1.56 billion from $1.34 billion a year ago. Analysts had a consensus revenue estimate of $1.56 billion for the quarter.
Gross margin, the percentage of sales left after deducting sales costs, remained flat at 36.7 percent last year.
Comparable sales, or sales from stores open for at least 14 months, increased 7.8 percent during the quarter, compared to an increase of 10.3 percent last year. During the quarter, the company opened 42 stores and ended the quarter with 1,163 stores.
“Ulta Beauty’s strong performance in the third quarter reflects continued market share gains across all major categories, acceleration in our overall comp driven by healthy traffic, excellent new store productivity, and robust e-commerce growth,” said Mary Dillon, Chief Executive Officer.
Looking forward to the fourth quarter, Ulta Beauty expects earnings of $3.50 to $3.55 per share on revenues of $2.085 billion to $2.103 billion. Comparable sales are expected to increase 7 to 8 percent. Analysts currently expect earnings of $3.62 per share on revenues of $2.12 billion for the quarter.
For the full year 2018, the company maintained its previous guidance. Ulta Beauty expects earnings growth in the “low twenties percentage range” and total sales growth in the “low-teens percentage range.” Analysts currently expect earnings of $10.99 per share on revenue growth of 14 percent.
ULTA closed Thursday’s trading at $292.92, up $1.79 or 0.61%, on the Nasdaq. The stock, however, slipped $16.65 or 5.68% in the after-hours trade.