Ulta Salon Profit Rises, Shares Gain 6% - Update

(RTTNews) - Shares of Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) gained six percent in extended hours on Thursday after its fourth-quarter earnings and revenues trounced Wall Street estimates. The beauty products retailer's fourth-quarter profit improved, helped largely by a double-digit sales growth.

Bolingbrook, Illinois-based Ulta Salon's fourth-quarter profit rose to $70.7 million or $1.09 per share from $64.5 million or $1.00 per share last year. On average, 15 analysts polled by Thomson Reuters expected earnings of $1.07 per share for the quarter. Analysts' estimates typically exclude special items.

Ulta Salon's fourth-quarter sales increased 14.4 percent to $868.1 million from $758.8 million last year. Thirteen analysts had a consensus revenue estimate of $855.64 million for the quarter.

Gross margin, the percentage of sales left after deducting sales costs, declined to 33.8 percent from 34.2 percent last year.

Comparable sales, or sales from stores open for at least 14 months increased 9.2 percent during the quarter, compared to an increase of 8.6 percent last year.

During the fourth quarter, Ulta opened 11 stores and had 675 stores at the end of the fourth quarter.

Commenting on the results, Chief Executive Mary Dillon said, "Ulta Beauty achieved excellent top line growth in the fourth quarter. We delivered earnings growth consistent with our expectations and made significant progress with our key growth strategies."

Looking ahead to the first quarter, Ulta Salon expects earnings of $0.70 to $0.75 per share on revenues between $693 million and $704 million. Analysts currently see earnings of $0.80 per share on revenues of $696.23 million for the first quarter.

For the fiscal year 2014, the company expects earnings growth in mid-teens percentage range and comparable sales growth of about 4 to 6 percent.

ULTA closed Thursday's regular trade at $89.51, down $1.88 or 2.06%, on the Nasdaq. The stock, however, gained $5.69 or 6.36%, in after-hours trade.