NEW YORK (TheStreet) -- Ulta Beauty (ULTA - Get Report) shares plunged more than 16% in after-hours trading as the cosmetics and beauty supply chain sharply tempered fourth-quarter earnings expectations due to softer-than-expected sales.
Herb Greenberg foreshadowed Thursday's after-hours action from the company in a post he made to TheStreet's Real Money premium service Wednesday morning.
The Bolingbrook, Ill.-based company said Thursday that it expects fourth-quarter earnings are forecast to come in between $1.07 to $1.10 a share, compared to consensus estimates of $1.24 a share.
"Earnings per share guidance for the fourth quarter of fiscal 2013 is lower than previous expectations, primarily as a result of softer retail sales trends at the end of the third quarter which are expected to continue, as well as the company's plans to maintain strong market share gains during a highly competitive and promotional holiday selling season," Ulta said in its third-quarter earnings release.
Net sales for the quarter are expected between $853 million and $867 million. Sales in last year's fourth quarter totaled $758.8 million, including $40 million of sales in the 53rd week of the year, the company said. Analysts, on average, had expected sales of $895 million for the January-ending quarter.
Fourth-quarter comparable store sales, which include online sales, are expected to increase 7% to 9%, the company said.
Shares were falling 16.5% to $98.50 in post-markets trading.
The disappointing forecast comas as Ulta reported third-quarter net income of $45.4 million, or 70 cents a share, compared to $38.1 million, or 59 cents a share in the year-earlier period. Earnings missed analysts' estimates of 74 cents a share. The Nov.-2-ending quarter includes 2 cents per share related to severance charges, the company said.
Ulta said net sales rose 22.4% to $618.8 million for the third-quarter, missing analysts' expectations of $622 million. Comparable store sales jumped 6.8% for the quarter, however that's lower than the 8.9% the stores experienced in the third quarter last year.
"The Ulta Beauty team delivered solid top line growth, with particular strength in our on-line sales, despite a challenging environment," CEO Mary Dillon said in the earnings statement. "We also made significant progress on our growth strategies, including opening a record number of new stores, seamlessly rolling out a new e-commerce site while maintaining strong top-line momentum, completing this year's roll-out of Clinique and Lancome boutiques, and continuing to launch new and exclusive products and brands."
-- Written by Laurie Kulikowski in New York.