Ulta Salon lowers fiscal year 2008 outlook

ROMEOVILLE, Ill. - Ulta Salon, Cosmetics & Fragrance Inc. on Thursday lowered its outlook for the fiscal year and offered initial guidance for the fourth quarter below analyst estimates.

The cosmetics retailer said it expects 2008 net sales to fall in a range of $1.1 billion to $1.11 billion, down from its previous range of $1.12 billion and $1.13 billion but exceeding 2007 sales of $912.1 million.

It expects same-store sales to grow 1.4 percent to 2.7 percent for the year. Last year same-store sales, a key measure for retailers, grew 6.4 percent. The company's previous guidance called for same-store sales growth of 3 to 5 percent.

Ulta now expects to earn 47 cents to 51 cents for the year, which excludes a severance expense worth 1 cent a share. That is down from a range of 52 cents to 57 cents, which also excludes the severance expense.

It also is scaling back capital expenditures to $110 million, down from a previous estimate of $115 million to $120 million.

Analysts are predicting the company earns 53 cents a share in fiscal 2008 on revenue of $1.12 billion, according to Thomson Reuters. They typically exclude one-time items from their estimates.

Ulta Salon introduced guidance for the fourth quarter, saying it expects net sales to range between $354 million and $368 million, which is above year-ago fourth-quarter sales of $309.3 million.

It expects same-store sales to fall as much as 2 percent or grow up to 2 percent, down from same-store sales growth of 4.5 percent last year.

Ulta said it expects net income to range between 24 cents and 28 cents, above the 23 cents a share the company earned last year.

Analysts are predicting the company earns 30 cents a share on revenue of $372.5 million in the quarter.

The retailer operates more than 300 stores in 35 states.

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