Ulta Beauty gets squeezed

Daily Freeman (Kingston, NY) - - BUSINESS -

Ulta Beauty shares fell to a three-month low af­ter the cos­met­ics re­tailer said its profit mar­gin was squeezed in the third quar­ter and warned fourth-quar­ter sales growth would be slower than last year.

The Bol­ing­brook, Illi­nois chain's stock slumped 13.1 per­cent to $254.47, its low­est price since early Septem­ber.

Ulta runs 1,163 re­tail stores across 50 states. Chief Fi­nan­cial Of­fi­cer Scott Set­ter­sten told an­a­lysts that Ulta's op­er­at­ing mar­gin fell dur­ing the quar­ter, de­spite higher sales. He blamed steep dis­count­ing in the sec­ond quar­ter that con­tin­ued into the third. “While the clear­ance event did pres­sure mar­gin rate more than plan, we're happy with the end re­sults and are in great shape for Q4,” Set­ter­sten said.

Set­ter­sten also fore­cast com­pa­ra­ble sales growth would slow to be­tween 7 and 8 per­cent in the fourth quar­ter, down from 8.8 per­cent growth in the same pe­riod last year.

Ulta Beauty shares have gained about 17 per­cent so far this year.

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