Shares of Ulta Beauty (NASDAQ: ULTA) popped on Friday after the specialty beauty retailer boosted its sales and profit forecast.
By the close of trading, Ulta’s stock price was up more than 12%.
Ulta’s net sales rose 12.9% year over year to $2.9 billion in its fiscal third quarter ended Nov. 1. The gains were driven by new store openings, rising sales at existing locations, and Ulta’s acquisition of British beauty retailer Space NK Limited in July.
Ulta opened 28 new stores and remodeled 15 locations during the quarter. The cosmetics retailer ended the period with over 1,500 stores worldwide.
Revenue also continues to grow steadily at the company’s older stores. Ulta’s comparable sales at stores open at least 14 months grew a solid 6.3%.
“Exciting assortment newness, improved in-store and digital experiences, and bold marketing efforts are resonating with our guests and drove strong sales results, market share gains, and growth across all categories and channels, with notable strength in e-commerce,” CEO Kecia Steelman said in a press release.
Still, Ulta’s growth investments weighed on its profitability. Its operating income declined by 3% to $309.4 million, as its operating margin fell to 10.8% from 12.6% in the prior-year quarter.
Ulta’s earnings per share, in turn, were flat at $5.14. However, that was nicely above Wall Street’s estimates, which had called for per-share profits of $4.60.
These encouraging results prompted Ulta to lift its full-year guidance. Management now expects same-store sales to rise by 4.4% to 4.7%, up from a prior forecast of 2.5% to 3.5%. Ulta also boosted its earnings projections to $25.20-$25.50 per share, up from $23.85 to $24.30.
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