Why Ulta Beauty's Shares Are Down 10% Despite a Strong Quarter

Wall Street gave investors another case of "when good isn't good enough" this morning as shares of Ulta Beauty (NASDAQ: ULTA) traded roughly 10% lower as of 11:00 a.m. EDT despite the beauty retailer beating profit estimates during the second quarter.

Looking through Ulta's second-quarter results, investors are likely scratching their heads over the 10% sell-off. Net sales jumped more than 20% to $1.29 billion, right in line with analysts' estimates, driven by an impressive 11.7% comparable-store sales increase -- a figure many retailers would love this year even though it's down from Ulta's prior-year 14.4% climb. That strong result filtered down to the bottom line as well, with earnings per share checking in with a 28% boost to $1.83. That result exceeded analysts' estimates calling for an EPS of $1.78. Furthermore, its e-commerce revenue grew by 72% and its selling, general, and administrative (SG&A) expenses as a percentage of net sales declined slightly by 10 basis points. 

Image source: Getty Images.

Continue reading

Source: Fool.com