Sept 3 (Reuters) - Ulta Salon, Cosmetics & Fragrance Inc (ULTA.O) posted better-than-expected quarterly results, boosted by higher traffic, and forecast third-quarter results in line with market estimates, sending shares up 4 percent in trading after the bell.

For the quarter ended Aug. 1, net income rose to $5.8 million, or 10 cents a share, from $3.7 million, or 6 cents a share, a year ago. Sales rose 10 percent to $273.5 million, but sales at stores open at least a year fell 1.7 percent. Analysts were looking for earnings of 5 cents a share, before items, on revenue of $270.9 million, according to Reuters Estimates. The company, which is looking to open 35 new stores in 2009, expects to earn 8 cents to 11 cents a share on revenue of $270 million to $278 million in the third quarter.

Analysts were expecting earnings of 9 cents a share, before items, on revenue of $273.6 million.

"As we begin the second half of the year, the consumer environment remains difficult but appears to be more stable than earlier quarters," Chief Executive Lyn Kirby said in a statement.

Increased promotions and loyalty coupons have driven traffic at the beauty products retailer. The company has also looked to rein in costs by reducing supply chain and store operating costs, and by freezing corporate office headcount.

Shares of the Romeoville, Illinois-based company were up 4 percent at $13.00, in trading after the bell. They closed at $12.49 Thursday 3 September on Nasdaq.

(Reporting by Viraj Nair in Bangalore; Editing by Anil D'Silva)

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