March 19 (Reuters) - Beauty products retailer Ulta Salon, Cosmetics & Fragrance Inc (ULTA.O) posted a fourth-quarter profit that beat market expectations as it avoided discounting during the holiday season, but forecast first-quarter results below market estimates.

The company plans expense reductions of about $15 million for fiscal 2009 by reducing supply chain and store operating costs and freezing corporate office headcount. It also plans to reduce inventory by 5 to 7 percent.

The Romeoville-Illinois based company posted fourth-quarter net income of $12.3 million, or 21 cents a share, compared with $13.6 million, or 23 cents a share, from a year earlier.

Net sales for the quarter ended Jan. 31 rose 10.4 percent, while same store sales at the company fell 5.5 percent.

Analysts were expecting earnings of 19 cents a share, before special items, on revenue of $341.7 million, according to Reuters Estimates.

Ulta Salon expects earnings of 4 cents to 6 cents a share for the first quarter, including severance costs of 1 cent a share.

It expects net sales of $262 million to $271 million for the quarter and sees same-store sales dropping 2 to 5 percent during the period.

Analysts were expecting earnings of 7 cents a share, before special items, on revenue of $273.2 million, for the first quarter. The company's shares, which have fallen about 54 percent in past six months, closed at $6.28 Thursday March 19 on Nasdaq. (Reporting by Poojya Trivedi in Bangalore; Editing by Ratul Ray Chaudhuri)