Ulta Rockets on Q3 Earnings Beat

Ulta Beauty Inc (NASDAQ:ULTA) reported better-than-expected Q3 earnings. The company also narrowed its FY19 EPS guidance above analyst estimates.

The company, based in Bolingbrook, Ill., revealed net sales increased 7.9% to $1,682.5 million compared to $1,560.0 million in the third quarter of fiscal 2018.

Operating income was $167.8 million, or 10.0% of net sales, compared to $169.2 million, or 10.8% of net sales, in the third quarter of fiscal 2018. Net income was $129.7 million compared to $131.2 million in the third quarter of fiscal 2018.

Diluted earnings per share increased 3.2% to $2.25, which included a $0.02 per share benefit primarily due to an increase in federal income tax credits, compared to $2.18 in the third quarter of fiscal 2018, which included a $0.02 per share benefit due to income tax accounting for share-based compensation.

Said CEO Mary Dillon,"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."

Merchandise inventories, net at the end of the third quarter of fiscal 2019 totaled $1,616.9 million compared to $1,484.6 million at the end of the third quarter of fiscal 2018, representing an increase of $132.4 million

The Company ended the third quarter of fiscal 2019 with $208.8 million in cash and cash equivalents.

Shares exploded $27.77, or 11.8%, to $263.79