(Reuters) – Cosmetics retailer Ulta Beauty (ULTA) raised its annual profit forecast on Thursday, signaling a bounce back in demand for perfumes and makeup during the holiday shopping season and sending its shares up more than 12% in early Friday trading.
The company has seen strong engagement from younger shoppers who are on the look out for both mass products and prestige brands such as Elf Beauty and Clinique by Estee Lauder, respectively, for the holidays.
It also rolled out early deals in November and offered steep promotions during Black Friday.
The retailer, which sells perfumes and makeup, also slightly nudged the lower end of its annual sales forecast.
The company now expects annual sales to be between $11.1 billion and $11.20 billion, compared with its prior expectation of $11 billion to $11.20 billion.
Ulta expects annual profit per share to be between $23.20 and $23.75, up from its prior expectation of $22.60 to $23.50.
Ulta’s strong results come at a time when beauty giants Estee Lauder (EL) and L’Oreal (OR.PA) have flagged waning demand in the United States for their premium beauty products and upmarket lipsticks and perfumes.
Visits to Ulta’s stores dipped in September from a year ago but quickly bounced back in October, which saw a 4.5% jump compared with a year earlier, bolstered by Halloween offerings and seasonal sales according to data from Placer.ai.
Quarterly net sales rose 1.7% to $2.53 billion, helped by contribution from new stores, beating analysts’ estimates of $2.50 billion, according to data compiled by LSEG.
During the third quarter ending Nov. 2, Ulta opened 28 new stores, remodeled 27 stores, and closed two stores. It operated 1,437 stores, at the end of quarter.
It posted a profit of $5.14 per share for the quarter, compared to estimates of $4.54 per share.
(Reporting by Aamir Sohail and Sriparna Roy in Bengaluru; Editing by Krishna Chandra Eluri)
