Ulta Beauty's Q3 Profit Declines

Ulta Beauty reported a drop in profit during the third quarter, citing increased costs and a decline in the average ticket of customers' purchases. The cosmetics retailer's net profit for the three months ended Oct. 28 was $249.5 million, or $5.07 a share, compared with $274.6 million, or $5.34 a share, for the same period last year. While analysts had predicted earnings per share of $4.94, Ulta Beauty's actual earnings exceeded expectations.

Despite the decline in profit, Ulta Beauty's sales rose by 6.4% to $2.49 billion, surpassing analysts' expectations of $2.47 billion. However, this increase represents a significant slowdown in sales growth when compared to the previous two quarters.

Ulta Beauty cited an 11% rise in selling, general, and administrative expenses as a result of increased investments, particularly in its marketing budget. The company witnessed a 1.4% decline in average ticket, a decrease from the previous quarter's 1% drop. Although total transactions increased by 5.9%, this figure also decreased from a rise of 9% in the second quarter.

In light of these results, Ulta Beauty will need to carefully manage costs and analyze its marketing strategy to stimulate growth and regain momentum in the coming quarters.