Ulta Beauty (ULTA) stock is trading lower Friday after the beauty retailer fell short of top- and bottom-line expectations for its second quarter and cut its full-year outlook.
In the 13 weeks ended August 3, Ulta's revenue increased 0.9% year-over-year to $2.55 billion, with top-line growth pressured by a 1.2% slump in comparable-store sales. Its earnings per share (EPS) declined 12% from the year-ago period to $5.30.
"While we are encouraged by many positive indicators across our business, our second-quarter performance did not meet our expectations, driven primarily by a decline in comparable -tore sales," said Ulta CEO Dave Kimbell in a statement. "We are clear about the factors that adversely impacted our store performance, and we have actions underway to address the trends."
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.
The results fell short of analysts' expectations. Wall Street was anticipating revenue of $2.6 billion and earnings of $5.46 per share, according to Yahoo Finance.
"In light of our first-half trends and a more cautious outlook, we have updated our full-year expectations," Kimbell said. Here's what the company now expects to accomplish in its fiscal year versus its previous forecast:
| Metric | New outlook | Previous outlook |
|---|---|---|
| Revenue | $11 billion to $11.2 billion | $11.5 billion to $11.6 billion |
| Comparable-store sales | (2%) to 0% | 2% to 3% |
| Earnings per share | $22.60 to $23.50 | $25.20 to $26 |
Analysts were forecasting revenue of $11.5 billion and earnings of $25.23 per share for Ulta in 2024.
Is Ulta stock a buy, sell or hold?
It's been a rough year on the price charts for Ulta Beauty. While shares got a short-lived boost earlier this month on news Ulta was added to Warren Buffett's Berkshire Hathaway equity portfolio in Q2, they remain more than 27% lower for the year to date. Still, Wall Street remains bullish on the consumer discretionary stock.
According to S&P Global Market Intelligence, the consensus analyst target price for ULTA stock is $413.55, representing implied upside of roughly 16% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm Oppenheimer has an Outperform rating (equivalent to a Buy) on ULTA stock with a $435 price target.
"We continue to look favorably on ULTA's long-term prospects," says Oppenheimer analyst Rupesh Parikh, citing the company's differentiated offerings, potential to deliver above-average growth rates in retail, and strong management as some of the reasons he is bullish.
"We continue to view ULTA shares as appropriate for longer-term players and would take advantage of any dips from here," Parikh adds.
Related Content
-
Stock Market Today: Trump Retreats, Markets RejoiceStocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
In Trump’s Economy Should 401(k) Savers 'Set It and Forget It?'It’s hard to bury your head in the sand when the markets are volatile. Here’s when it makes sense and when it doesn’t.
-
Stock Market Today: Trump Retreats, Markets Rejoice
Stocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw BackTesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
-
Early-Stage Startup Deals: How Do Convertible Notes Work?Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
-
Stock Market Today: Stocks Soar on China Trade Talk HopesTreasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
-
How Can Investors Profit From AI's Energy Use?Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
-
Can Trump Fire Powell? A Supreme Court Case Could DecidePresidential posts threaten to overwhelm decades of precedent and tradition, whatever the nine justices decide.
-
What Are AI Agents and What Can They Do for You?AI agents promise to be the next big thing in artificial intelligence, but what exactly do they do?
