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Sep 6, 2010
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Ulta Salon Q2 beats estimates, sees Q3 above Street

By
Reuters
Published
Sep 6, 2010

Sept 2 (Reuters) - Ulta Salon, Cosmetics & Fragrance Inc (ULTA.O) posted a higher-than-expected quarterly profit, helped by higher merchandise margins, and forecast a strong third quarter, sending its shares up 11 percent.

Ulta Salon
Ultasalon.com

Beauty companies have been hurt by a weak economy and high unemployment rates. However, larger cosmetic companies Estee Lauder Cos Inc (EL.N) and Elizabeth Arden Inc (RDEN.O) swung to quarterly profits last month.

For the second quarter, Ulta Salon saw an 8 percent rise in customer count and a 2.8 percent increase in average ticket.

"During the third quarter we expect to continue to drive traffic and average ticket growth, as we leverage our loyalty program," Chief Operating Officer Chuck Rubin said.

Bolingbrook, Illinois-based Ulta Salon earned $13.1 million or 22 cents a share, compared with $5.7, or 10 cents a share, a year ago.

Revenue rose 18 percent to $321.8 million.

Analysts on average were looking for a profit of 18 cents a share, before items, on revenue of $314.9 million, according to Thomson Reuters I/B/E/S.

Merchandise margin for the second quarter rose 120 basis points.

The retailer, whose rivals include Sally Beauty Holdings Inc (SBH.N) and Regis Corp (RGS.N), forecast an adjusted third quarter profit of 20-22 cents a share on sales of $324-$330 million.

Analysts were expecting 16 cents a share on revenue of $324.9 million.

Ulta Salon stock, which has lost 17 percent of its value since touching a 2010 high of $26.75 in June, were trading up 11 percent at $24.60 post market.

It closed at $22.23 Thursday on Nasdaq.

(Reporting by Vidya Lakshmi in Bangalore; Editing by Don Sebastian)

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