Ulta Beauty stock soars 16% after company’s Q2 sales beat; online sales surge

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Ulta Beauty Inc. shares rose more than 16% in the extended session Thursday after the retailer reported second-quarter adjusted profit well above Wall Street expectations and said its online sales had tripled. Ulta earned $8.1 million, or 14 cents a share, in the quarter, compared with $161 million, or $2.76 a share, in the year-ago period. Adjusted for one-time items, the company earned $41.5 million, or 73 cents a share, compared with $2.72 a share a year ago. Sales fell 26% to $1.23 billion from $1.7 billion a year ago. Analysts polled by FactSet had expected an adjusted profit of 6 cents a share on sales of $1.25 billion. Ulta said its same-store sales fell nearly 27%, but e-commerce sales increased more than 200%. “While the pandemic continues to impact our business, we are encouraged by improving trends,” Chief Executive Mary Dillon said in a statement. Sales trends “have continued to improve, with comparable sales down in the mid-single digit range for the first three weeks of August.” Despite the recent improvement in sales trends, “it will take time to fully return to pre-COVID levels … we expect sales will continue to be challenged for the rest of the year,” Dillon said. Ulta did not provide guidance but said it expects costs between $35 million and $40 million related to PPE and COVID-19 in the second half of fiscal 2020, and capital expenditures between $180 million and $200 million, compared to a previous expectation of between $200 million and $210 million. Shares of Ulta ended the regular trading day up 1.5%.
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