Ulta Beauty Results Top Estimates

(RTTNews) - Beauty products retailer Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) said Tuesday after the markets closed that its first quarter profit rose 19% from last year on strong sales growth.

The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly sales.

"Ulta Beauty delivered strong sales and earnings growth in the first quarter," said Mary Dillon, Ulta Beauty's Chief Executive Officer. "The team's accomplishments included improving retail transactions which turned positive, driving continued momentum in our online business, successfully rolling out new brands, completing a smooth conversion of our loyalty program members onto one platform, and managing inventory very well."

Ulta Beauty shares are currently gaining 8.23% in after hours trading after closing the day's regular trading session at $85.31, down 10 cents. The shares trade in a 52-week range of $80.35 to $132.72.

For the first quarter ended May 3, 2014, the Bolingbrook, Illinois-based company reported net income of $50 million or $0.77 per share, compared to $41.8 million or $0.65 per share for the year-ago quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to earn $0.74 per share for the first quarter.

Net sales for the first quarter rose 22.5% to $713.77 million from $582.71 million in the same quarter last year. Fifteen analysts had a consensus revenue estimate of $699.95 million for the first quarter.

Same-store sales for the quarter increased 8.7%, with e-commerce same-store sales up 72.3%.

Gross margin for the quarter narrowed to 34.5% from 35.0% a year ago, mainly driven by product and channel mix shifts, converting the remaining 50% of the loyalty program members to the ULTAmate Rewards program, and deleverage of fixed store costs resulting from a large number of new stores in the portfolio.

During the first quarter, the Company opened 21 stores and ended the quarter with 696 stores.

Looking forward to the second quarter, the company forecasts net sales of $706 million to $717 million, same-store sales growth 5% to 7% and earnings of $0.78 to $0.83 per share. Analysts currently expect the company to earn $0.82 per share on revenue of $703.95 million for the second quarter.

For the fiscal year 2014, the company still expects to achieve same-store sales growth of 4% to 6% and deliver earnings per share growth in the mid-teens percentage range.