Despite Beat And Raise, Ulta Shares Have Mixed Reaction

Ulta Salon, Cosmetics & Fragrance ULTA released Q2 results after market close on Thursday. Earnings per share came in above Wall Street consensus expectations and shares entered into a volatile session.

Ulta Salon reported EPS of $1.43 and revenues of $1.069 billion. Analyst consensus had an EPS estimate of $1.4 and revenues of $1.06 billion. Comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 14.4 percent compared to an increase of 10.1 percent in the second quarter of fiscal 2015.

Ulta Salon saw Q3 EPS at $1.25-$1.30 vs. estimates of $1.29 and Q3 revenues of $1.072-$1.09 billion vs. estimates of $1.08 billion. Additionally, the company saw Q3 comparable sales of 11-13 percent, below Q2's 14.4 percent.

"Our second quarter results reflect a strong pipeline of newness and innovation in merchandising, progress in growing our brand awareness, major milestones related to our loyalty program, continued rapid growth in our e-commerce business, and successful execution of our supply chain investments," stated Mary Dillon, CEO.

Confirming Analyst Hopes

Baird analysts believed Ulta would at least perform in-line with estimates as they forecasted strong performance from me-commerce.

Oppenheimer analysts believed the company would experience sufficient comp and earnings upside due to strong levels of innovation in the beauty category.

At time of writing, Ulta Salon, Cosmetics & Fragrance traded at $269 in Thursday's after-hours session.