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After Ulta Beauty Inc. (NASDAQ: ULTA) reported its fiscal second-quarter financial results after the markets closed on Thursday, shares dropped by a roughly quarter early Friday. While this was a cult stock in the past, this move seems to reaffirm the notion. Short interest definitely has a part to play in this as well.

It’s worth pointing out that the number of Ulta shares sold short interest is at its highest level in the past 12 months. Short interest for the August 15 settlement date came in at 3.37 million, up from 2.81 million on the previous settlement date. This makes up about 6% of Ulta’s total float.

The firm said that it had $2.76 in earnings per share (EPS) and $1.67 billion in revenue, compared with consensus estimates that called for $2.80 in EPS and $1.68 billion in revenue. The same period of last year reportedly had $2.46 in EPS and revenue of $1.49 billion.

During the latest quarter, comparable sales increased 6.2%, compared to an increase of 6.5% in the second quarter of fiscal 2018. The 6.2% comparable sales increase was driven by 5.4% transaction growth and 0.8% growth in average ticket.

Looking ahead to the fiscal 2019 full year, the company expects to see EPS in the range of $11.86 to $12.06, down from the previous guidance of $12.83 to $13.03. Also, total sales are expected to increase between 9% and 12%. Consensus estimates so far call for $12.97 in EPS and $7.53 billion in revenue for the full year.

CEO Mary Dillon commented:

The Ulta Beauty team delivered another quarter of solid top-line performance, gross margin expansion, and double-digit earnings growth. Looking forward, we have updated our fiscal 2019 outlook to reflect the headwinds we are currently seeing in the US cosmetics market. We remain confident that our guest-centric, differentiated business model will drive continued market share gains and strong returns for our shareholders over the long term.

Shares of Ulta traded down about 25% on Friday, at $252.08 in a 52-week range of $224.43 to $368.83. The consensus price target is $365.67.

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