Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA), Thursday reported a sharp increase in second-quarter profit from the same quarter a year ago, primarily helped by an improvement in revenues as well as benefiting from expense and working capital management initiatives. Quarterly earnings as well as revenues came in ahead of Street view.
The Bolingbrook, Illinois-based cosmetic retailers' net income for the second-quarter increased to $5.750 million or $0.10 per share from $3.688 million or $0.06 per share in the same quarter last year.
On average, nine analysts polled by Thomson Financial expected the company to report earnings of $0.05 per share for the second quarter. Analysts estimate typically excludes special items.
Commenting on the results, Lyn Kirby, president and chief executive officer, Ulta Salon, Cosmetics & Fragrance said, "our expense and working capital management initiatives continued to gain momentum which helped generate second quarter earnings above our expectations and year-to-date free cash flow of $40 million."
Operating income for the second quarter improved to $10.236 million from $7.207 million in the same quarter last year.
Net sales for the second quarter also increased 9.8% to $273.54 million from $249.11 million in the corresponding quarter a year ago, with a 1.7% decline in comparable store sales. The Street expected revenues of $270.96 million for the second quarter.
During the second quarter, the company opened 13 stores and ended the quarter with 333 stores with a square footage of nearly 3,469,448, an 18% increase from the comparable quarter a year ago.
For the six-months period, net income improved to $10.670 million from $7.963 million in the same quarter last year.
Revenues for the period improved to $542.36 million from $488.41 million in the same quarter last year.
Looking ahead to the third quarter, the company expects earnings in the range of $0.08 per share to $0.11 per share on revenues expected in the range of $270 million to $278 million. Analysts currently expects the company to report earnings of $0.09 per share on revenues of $273.75 million for the quarter.
For the fiscal year 2009, the company plans to permanently reduce expenses by nearly $18 million including supply chain, store and other operating costs.
ULTA closed Thursday's trading at $12.49, up $0.34 or 2.80%, on a volume of 0.398 million shares on the Nasdaq. In the after hours, the Stock gained $0.46 or 3.68%, to trade at $12.95.
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