Why Ulta Beauty Stock Gained 12% in March

What happened

Ulta Beauty (NASDAQ: ULTA) shares outpaced the market last month by rising 12% compared to a 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to a strong period for the stock, which is up 43% so far in 2019 and has jumped 70% in the past full year.

So what

The spa and beauty products retailer announced solid holiday-quarter results last month. Sales gains accelerated for the second straight quarter, with comps growth landing at 9.4%. The chain's past moves to trim inventory, meanwhile, allowed it to sell more full-priced items so that gross profit margin improved after falling in recent quarters.

Now what

CEO Mary Dillon and her team are predicting that sales gains will slow to between 6% and 7% in 2019 from this past year's 8% increase. The company is also planning to be more deliberate with spa openings, with 80 set to launch this year compared to 100 in 2018. Still, the chain believes healthy customer traffic, both in stores and online, should support stable operating margins and earnings of between $12.65 per share and $12.85 per share, for a double-digit increase over last year's result.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Ulta Beauty. The Motley Fool has a disclosure policy.