By Katherine Hamilton

Ulta Beauty finished its fourth quarter better than it had forecast, providing an upbeat surprise in the first quarterly earnings report under its new chief executive.

The cosmetics retailer on Thursday said same-store sales rose 1.5% in the fourth quarter, which ended Feb. 1, after guiding in early January that the metric would increase modestly. Same-store sales measures revenue growth at stores open more than 14 months and e-commerce sales.

Chief Executive Kecia Steelman, who took the helm in January, said the results topped expectations by several measures, and the company plans to make investments over the coming year to position itself to grow and optimize its operations.

"While it will take time to see the impact of these efforts, we are confident these investments will help reignite our momentum and unlock sustained growth and long-term value for our shareholders," Steelman said.

Ulta's plan comes as the beauty industry has slowed, in part due to cautious consumer spending. The company is also facing more competition from lower-priced and e-commerce rivals, including Amazon.com and Walmart.

Ulta posted a slight decline in overall revenue in the fourth quarter, owing to an extra week in the same quarter a year earlier, while profit also fell slightly. Both came in ahead of Wall Street forecasts.

Its forecast for earnings per share in the upcoming year, however, fell short of expectations.

Shares rose 6.1% in after hours trading to $333.50. Through Thursday's close, the stock had lost about 45% over the last year.

For the quarter, Ulta posted a profit of $393.3 million, or $8.46 a share, compared with $394.4 million, or $8.08 a share, a year earlier. Analysts polled by FactSet expected $7.12 a share.

Revenue fell 2% to $3.49 billion, just above the $3.47 billion expected by analysts.

For the current fiscal year, Ulta is expecting revenue of $11.5 billion to $11.6 billion, ahead of the $11.27 billion analysts are estimating.

It anticipates same-store sales will be flat or rise 1%. Earnings per share are guided to be $22.50 to $22.90, below the $23.36 a share Wall Street expects.

In addition to Steelman, Ulta has also recently appointed a new chief marketing officer and chief retail officer.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

March 13, 2025 17:15 ET (21:15 GMT)

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