Ulta Beauty (NASDAQ: ULTA) reported its third quarter financial results after the closing bell on Thursday. The beauty retailer reported better-than-expected earnings, but slightly fell short of revenue estimates, sending shares 9% higher on Friday morning.
For the quarter, Ulta reported earnings of USD 2.25 per share on revenues of USD 1.68 Billion. Analysts anticipated earnings of USD 2.14 per share on revenues of USD 1.69 Billion.
Despite the revenue miss, Ulta reported that revenues increased by 7.9% year-over-year, driven by comparable sales of 7.8%. Comparable sales at the end of the quarter improved by 3.2% compared to the third quarter of fiscal 2018.
The 3.2% comparable sales growth was driven by 2.3% transaction growth and 0.9% in average ticket.
However, operating income for the quarter slightly fell to USD 167.8 Million, or 10% of total net sales, compared to USD 169.2 Million, 10.8% of total net sales in the same period a year ago.
During the quarter, Ulta opened 31 new locations and closed down three stores. At the end of the quarter, Ulta was operating 1,241 stores and square footage of 13,061,791, representing a 6.9% increase in square footage year-over-year.
“Our differentiated model is winning in the marketplace,” said Mary Dillon, Chief Executive Officer. “The Ulta Beauty team delivered another quarter of solid top-line performance, gross margin expansion, and EPS growth, despite the current challenges facing the U.S. cosmetics category. We continue to gain market share across all major beauty categories, and we are extending our leadership position by creating stronger connections with our guests and engaging with them in better and more exciting ways.”
Based on the third quarter results, Ulta narrowed its guidance for the remainder of fiscal 2019. The Company is now anticipating earnings between USD 11.93 to USD 12.03 per share, lowered from its previous expectations range of USD 11.86 to USD 12.06 per share. Additionally, Ulta is expecting total sales increase of 10%, previously in the range between 9% to 12%.