ULTA’s Q2 Profit and Revenue Beat View as Sales Surge 22%

Cosmetics retailer Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) after the bell today posted better-than-expected Q2 earnings results and offered an in-line forecast.

The Bolingbrook, IL-based company reported Q2 net income of $1.43 per share, beating Wall Street estimates of $1.40. Sales rose 22% from last year to $1.07 billion, narrowly edging out analysts’ view of $1.06 billion.

Same-store sales rose 14.4%, higher than ULTA’s guidance for 11% to 13% growth.

Looking ahead, ULTA forecast Q3 earnings to range from $1.25 to $1.30, which is in-line with analysts’ view of $1.29. Revenue was forecasted at $1.072 to $1.090 billion, also straddling estimates for $1.08 billion.

ULTA also expects Q3 comps to rise between 11% and 13%.

From the press release:

Merchandise inventories at the end of the second quarter of fiscal 2016 totaled $930.2 million, compared to $705.7 million at the end of the second quarter of fiscal 2015, representing an increase of $224.5 million. Average inventory per store increased 18.7%, compared to the second quarter of fiscal 2015. The increase in inventory was primarily driven by 90 net new stores, the opening of the Company’s fourth and fifth distribution centers in Greenwood, Indiana and Dallas, Texas, investments in inventory to ensure high in-stock levels to support sales growth, and incremental inventory for new brands and in-store prestige brand boutiques. Average inventory per store, excluding the investment in the new Dallas, Texas distribution center, increased 14.5%.

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ULTA shares were mostly flat in after hours trading Thursday. Prior to today’s report, ULTA had gained nearly 47% since the start of the year.

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