Ulta Salon, Cosmetics & Fragrance Inc. (ULTA), Thursday reported a 39 percent jump in fourth-quarter profit, as sales at the beauty retailer gained from store expansion and the introduction of new products. Both quarterly earnings and sales topped Wall Street estimates.
Moving ahead, the company provided some weak earnings and sales outlook for the first quarter, with same-store sales growth indicated to trail the prior year level. Following the news, shares of the company dropped the most in a year, tumbling 12 percent in after-hours trade on the Nasdaq.
Bolingbrook, Illinois-based Ulta Salon reported fourth-quarter net income of $64.5 million or $1.00 per share, compared to $46 million or $0.73 per share last year.
On average, 11 analysts polled by Thomson Reuters estimated earnings of $0.98 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter rose 30.3 percent to $756 million from $583 million in the prior year. Analysts on consensus estimated sales of $752.27 million for the quarter.
On a same-store basis, sales were up 8 percent, compared to an increase of 11.5 percent a year ago.
Gross margin for the quarter grew 10 basis points from last year to 34.2 percent, and operating margin was better at 13.7 percent, compared to 12.6 percent.
During the fourth quarter, the company opened 13 stores and ended the quarter with 550 stores. The company is on track to open 125 stores this year.
For the first quarter, Ulta Salon expects earnings of $0.60 to $0.63 per share on sales of $568 million to $577 million. Analysts currently estimate earnings of $0.72 per share on sales of $579.66 million.
The company expects same-store sales to grow 4 to 6 percent in the quarter.
For fiscal year 2013, Ulta Salon expects same-store sales growth of 4 to 6 percent and deliver earnings per share growth at the low end of its long term target of 25 to 30 percent, including the impact of about $0.13 of earnings per share in incremental investments. It expects capital expenditure of $225 million in the year.
Ulta stock closed Thursday at $87.66, up 0.19%, on a volume of 1.5 million shares. In after hours, the stock dropped $10.87 or 12.30% at $77.50. In the past year, the stock has traded in a range of $78.87 - $103.52.
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