Buffett-backed Ulta Beauty shares fall on second-quarter results, guidance disappoints By Investing.com

Ulta Beauty (NASDAQ: ) reported second-quarter earnings that fell short of analysts’ expectations while cutting its full-year outlook, sending shares down about 8% in after-hours trading.

The beauty retailer posted adjusted earnings per share of $5.30, missing the analyst consensus of $5.51. Revenue rose 0.9 percent from a year earlier to $2.55 billion, but fell short of estimates of $2.62 billion.

Comparable sales decreased 1.2% compared to an increase of 8.0% in the same quarter last year.

Ulta Beauty significantly cut its guidance for fiscal 2024, now expecting EPS of $22.60-$23.50, well below the previous analyst consensus of $25.26.

The company also cut its full-year revenue estimate to $11-11.2 billion, down from the $11.495 billion that analysts were expecting.

CEO Dave Kimbell acknowledged the disappointing results, stating, “While we are encouraged by many positive indicators in our business, our second quarter performance fell short of our expectations, driven primarily by a decline in comparable store sales.”

The company’s gross profit margin contracted to 38.3% from 39.3% a year ago, mainly due to lower merchandise margins and lower fixed store costs.

Operating income decreased to $329.2 million, or 12.9% of net sales, compared to $391.6 million, or 15.5% of net sales in the prior year period.

Despite the challenges, Ulta Beauty continued its share repurchase program, repurchasing 549,852 shares at a cost of $212.3 million during the quarter.

The company also expanded its store network, operating 1,411 stores at the end of the quarter, a net increase of 49 stores over the same period last year.