UPDATE 1-Ulta Salon Q3 tops market, sees Q4 above estimates

* Q3 EPS $0.23 vs est $0.20

* Q3 rev up 19.4 pct at $339.2 mln vs est $330.8 mln

* Sees Q4 adj EPS $0.40-$0.42 vs est $0.39

Dec 2 (Reuters) - Ulta Salon, Cosmetics & Fragrance Inc (ULTA.O) reported better-than-expected quarterly results, as it gained more market share within the beauty industry and improved merchandise margins, and forecast fourth-quarter profit above estimates.

For the fourth quarter, the beauty retailer forecast earnings of 40-42 cents a share, excluding special items, on revenue of $447-$456 million.

Analysts on an average were expecting earnings of 39 cents a share, on revenue of $450.7 million, for the fourth quarter, according to Thomson Reuters I/B/E/S.

For the August-October quarter, the company earned $14.2 million, or 23 cents a share, compared with $8.5 million, or 14 cents a share, a year ago.

Revenue at the company, whose rivals include Sally Beauty Holdings Inc (SBH.N) and Regis Corp (RGS.N), rose 19.4 percent to $339.2 million. Same-store sales for the quarter rose 12.2 percent.

Analysts on average had expected the company to earn 20 cents a share, on revenue of $330.8 million.

Shares of Bolingbrook, Illinois-based Ulta Salon, which have gained more than 60 percent in value since reporting second-quarter results in September, fell 1 percent in trading after the bell. They closed down 2 percent at $35.72 Thursday on Nasdaq. (Reporting by NR Sethuraman in Bangalore; Editing by Gopakumar Warrier)