Ulta Shares Rally As Management Raises Q3, FY 2016 Outlook

Ulta Salon, Cosmetics & Fragrance, Inc. ULTA gained more than 5 percent in pre-market trading Thursday after the company boosted its EPS and comparable store sales forecast for the third quarter and full year.

Ulta Beauty expects comparable sales to grow 14–15 percent, up from the previous forecast of 11–13 percent for the third quarter. In the year-ago quarter, comps growth was 12.8 percent. As a result, EPS forecast is increased from $1.25-$1.30 to $1.35-$1.38 for the same period, which is higher than the Street estimates of $1.30.

Similarly, for the full year, the beauty retailer expects to deliver comps growth of about 12–14 percent, higher than the earlier forecast of 11–13 percent. The company sees EPS growth in the mid-20 percentage range compared to low-to-mid-20 percentage range projected earlier. Currently, the Street is looking for an EPS growth of 25.1 percent.

CEO Mary Dillon commented, "We look forward to sharing with the investment community our latest thinking on our strategic plan and opportunities to double our market share. We are confident that executing against our strategic imperatives will continue to drive excellent financial results and create sustainable, long term shareholder value."

Ulta Beauty is holding investors' event on Thursday where it would also confirm its EPS growth outlook of low 20 percentage range for fiscal years 2017–2019. The company would also lift its long-term comps growth from 5–7 percent to 7–9 percent for the same period.

The stock jumped $12.52, or 5.24 percent, to $251.49 in pre-market trading.