Ulta shares sink after hours on weak outlook

Ulta's 4Q profit jumps on strong sales but expenses weigh on outlook; shares sink after hours

Associated Press

BOLINGBROOK, Ill. (AP) -- Ulta Beauty's fiscal fourth-quarter profit jumped nearly 40 percent on strong sales, but the beauty products retailer issued a disappointing forecast and its shares fell 15 percent in after-hours trading Thursday.

The company, based in Bolingbrook, Ill., earned $64.5 million, or $1 per share, for the period that ended Feb. 2. That is up from $46.3 million, or 73 cents per share, earned in the same quarter of the prior year. It got a boost from an extra week in the most recent quarter.

Ulta's total revenue increased 30 percent to $758.8 million from $582.5 million. Revenue from stores open more than a year increased 8 percent. That is considered a key indicator of a retailer's performance as it strips away the impact of recently opened or closed stores.

Analysts polled by FactSet were expecting the company to earn 98 cents per share on revenue of $754.2 million.

Ulta's Interim CEO Dennis Eck said that the quarter completes an "exceptional" year, which included the addition of 101 new stores and updates to its online business. The company is on track to open 125 stores this year.

"We are confident that Ulta will continue to gain market share and grow its position as a beauty and trend authority," Eck said.

The company forecast earnings between 60 and 63 cents per share for the first quarter on revenue in the range of $568 million to $577 million. That fell short of market forecasts. Analysts had forecast earnings of 72 cents per share on revenue of $578.9 million.

Ulta also said it expects its revenue from stores open at least a year will increase 4 to 6 percent for the quarter. Analysts were forecasting 6 percent growth.

For the full year, Ulta said it expects its earnings per share growth, on a 52-week basis, will come in at the low-end of its 25 to 30 percent long-term target. It attributed the forecast partly to the cost of a number of projects slated for the year. It plans to add more Clinique boutiques, upgrade its warehouse management systems and redesign its online business.

Ulta expects its capital spending for the year will hit roughly $225 million in 2013, up from $189 million in 2012.

The company, formally known as Ulta Salon, Cosmetics & Fragrance Inc., operated 550 stores across the country as of the end of the quarter.

Shares fell $13.23 to $75.14 in after-hours trading on the news. If the decline carries through to Friday's regular-session trading, the stock will set a 52-week low.

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