By Dhirendra Tripathi
Investing.com – Ulta Beauty stock (NASDAQ: ULTA ) rose 6% in Friday’s premarket trading as higher demand for its fragrances and haircare products drove its third-quarter sales and earnings to record levels.
Comfortably beating the estimates for the quarter gave the beauty retailer the confidence to raise its annual outlook one more time.
The company rode the return-to-work to drive, recording more transactions and higher consumption in the quarter ended October 30. Transactions rose around 17% while the average ticket size of each sale was higher by 7.7%.
Comparable sales rose around 26%. The company also opened 6 more stores effectively during the quarter, a contrast to the net closure of two outlets in the same period last year.
Gross profit rose from last year, and its gross margin also expanded. The company attributed this to control of fixed costs including salon expenses as well a better sales mix.
The company now sees its annual net sales at $8.55 billion at the midpoint of its guidance range, up from its August forecast of $8.2 billion. Margins are also set to be higher than previously estimated.
Net sales in the third quarter rose 25% to $2 billion. The share of haircare products and styling tools in sales rose to 21% from 20% earlier while that of fragrances and bath products improved by 200 basis points to 12%. One basis point is one-hundredth of a percent.
Adjusted profit per share was $3.93, up 61%.
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