Ulta Beauty shares fall after annual profit outlook miss

Investing.com -- Ulta Beauty shares fell about 8% in extended trading on Thursday after the cosmetics retailer issued earnings guidance that came in slightly below Wall Street expectations, despite reporting stronger-than-expected fourth-quarter results.

Ulta expects fiscal 2027 earnings of $28.05 to $28.55 per share, compared with analysts’ estimates of $28.57. The company also forecast net sales growth of 6% to 7% and earnings growth of about 9.4% to 11.4%.

The company posted fourth-quarter earnings of $8.01 per share, topping analysts’ estimates of $7.93. Revenue rose to $3.9 billion from expectations of $3.81 billion.

Comparable sales increased 5.8% during the quarter, helped by a 4.2% rise in average ticket and a 1.6% increase in transactions. Net sales climbed 11.8% year over year, driven by higher comparable sales, the acquisition of Space NK and contributions from new store openings.

Gross profit rose 11.2% to $1.5 billion, though the gross margin edged slightly lower to 38.1% of sales from 38.2% a year earlier. The company said margin pressure reflected an unfavorable sales mix and higher store-related costs, partly offset by lower inventory shrink and supply chain efficiencies.

Selling, general and administrative expenses increased 23% to $1billion, driven by higher corporate overhead linked to strategic investments, increased advertising spending and higher incentive compensation.

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