Ulta Beauty Inc.'s shares fell 20% on Aug. 29 after reporting second quarter earnings that missed analysts' expectations and lowering its guidance for fiscal 2019.
The Illinois-based retailer now expects diluted EPS of fiscal 2019 to be between $11.86 and $12.06 compared to its previous forecast of $12.83 to $13.03.
Comparable sales for fiscal 2019 are now expected to grow between 4% and 6% compared to the prior expectation of 6% to 7% growth. Total sales are expected to grow between 9% and 12% compared to the previous projection of low double-digit growth.
"We have updated our fiscal 2019 outlook to reflect the headwinds we are currently seeing in the US cosmetics market," Ulta Beauty CEO Mary Dillon said.
Diluted EPS for the second quarter ended Aug. 3 rose 12.2% to $2.76 from $2.46 in the year-earlier quarter but missed the mean consensus estimate for normalized EPS of $2.80, according to data compiled by S&P Global Market Intelligence.
Net income rose 8.7% to $161.3 million from $148.3 million in the year-ago quarter. Ulta Beauty's second quarter net sales grew 12% to $1.67 billion from $1.49 billion in the year-ago period, while comparable sales grew 6.2%. Ulta Beauty's comparable sales include sales for stores open for at least 14 months and sales from e-commerce.
For the first half of fiscal 2019, Ulta Beauty's sales were up 12.5% to $3.41 billion from $3.03 billion in the year-ago period. Comparable sales grew 6.6% compared to the 7.3% growth reported in the first half of the prior year. Net income for the first six months of fiscal 2019 rose 13% to $353.5 million from $312.7 million in the year-ago period.
Diluted EPS for the first half of the year grew 16.7% to $6.02 from $5.16 reported in the year-ago period.
Ulta Beauty also opened 20 new stores during the second quarter. The retailer plans to open about 80 new stores in fiscal 2019.
In aftermarket trading, Ulta Beauty's shares were down 20% to $269.99.
