Ulta (ULTA) stock slipped in early trading Friday after the beauty store retailer cut its full-year outlook despite reporting better-than-expected first-quarter results.
For the three months ended May 4, Ulta’s net sales increased 3.5% year-over-year to $2.7 billion, driven by a 1.6% increase in comparable-store sales and 10 net new store openings. Its earnings per share (EPS) decreased 6% to $6.47 from the year-ago period.
"The Ulta Beauty team delivered net sales growth of 3.5% and comparable sales growth of 1.6% in a dynamic operating environment," Ulta CEO Dave Kimbell said in a statement. "We have a clear plan to accelerate our momentum and continue delivering a best-in-class assortment and engaging experiences for our guests."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Ulta's bottom line beat analysts’ expectations, as Wall Street was anticipating earnings of $6.24 per share, according to data from Refinitiv. Sales of $2.7 billion matched estimates.
Despite the strong start to the year, decelerating comparable-store sales contributed to Ulta cutting its full-year outlook. Here’s what the company now expects compared to its previous guidance:
| Metric | New Outlook | Previous Outlook |
|---|---|---|
| Net Sales | $11.5 billion to $11.6 billion | $11.7 billion to $11.8 billion |
| Comparable-Store Sales | 2% to 3% | 4% to 5% |
| EPS | $25.20 to $26 | $26.20 to $27 |
"I remain confident in our differentiated model, the resilience of the beauty category, and our ability to execute against our plans, but we have adjusted our annual guidance as we anticipate the dynamics we faced in the first quarter to continue for the balance of the year," Kimbell said.
Is Ulta stock a buy, sell or hold?
Analysts remain bullish on the beauty retailer. According to S&P Global Market Intelligence, the average analyst target price for ULTA stock is $498.10. That gives shares implied upside of more than 29% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm UBS is one of the most bullish firms on Ulta stock with a Buy rating and $550 price target.
"We think a key takeaway is that ULTA set more realistic expectations for 2024," UBS said in a note to clients. "This was a learning event. There's nothing fundamentally wrong with ULTA's model.”
The $550 price target represents implied upside of over 42% to current levels.
Related Content
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility BillsIf passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
What Boomers and Gen Xers Can Learn from Younger ColleaguesWhether you're Gen X or a baby boomer, your younger colleagues' opinions on work may help you find a new job or be happier in the one you've got.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your BusinessSelling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or RelocateHomeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and FriendsWhat starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
Stock Market Today: Good Feelings and Solid Data Lift StocksResilience and de-escalation defined another generally positive day for financial markets.
