"We recognize that the macro economic environment has created increased levels of competition for consumer spending across all retail sectors and the retail calendar this year has lengthened the holiday season with critical shopping weeks still ahead of us," said Kirby, Ulta's president and chief executive, in a statement.

Ulta shares fell $5.10, or 18.6 percent, to $22.40 in midday trading, and traded as low as $19.35, a 52-week low.

For the fourth-quarter, the company predicts earnings between 22 cents and 24 cents per share, compared with earnings of 19 cents per share a year ago.

Ulta expects fourth-quarter sales between $304 million to $310 million, compared with $267 million in the prior-year quarter.

For the fiscal year, Ulta predicts net income between 47 cents and 49 cents per share, from 45 cents in fiscal 2006.

The company expects sales of $907 million to $913 million, from year-ago sales of $755.1 million.

Same-store sales are expected to rise 4 percent to 6 percent in the fourth quarter and 6.2 percent to 6.9 percent in the full year.

Same-store sales, or sales at stores open at least a year (14 months in Ulta's case), is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Longer term, Ulta expects same-store sales to grow in the mid-single digit percentage range and net income to rise 25 percent to 30 percent.

Ulta plans to open 53 new stores and remodel 17 stores in fiscal 2007. It ended the third quarter with 237 stores.

Ulta sells cosmetics, fragrance, haircare, skincare and salon styling tools in its stores, along with offering full-service salon services.