Ulta Beauty Delivers Strong Quarter, Investors Brush Off The Glow

Ulta Beauty, Inc. ULTA shares slipped Friday despite the beauty retailer delivering better-than-expected quarterly results and raising its full-year outlook.

The company reported second-quarter revenue of $2.79 billion, topping analyst estimates of $2.67 billion. Earnings of $5.78 per share also beat expectations of $4.97, according to Benzinga Pro.

Ulta lifted its fiscal 2025 revenue guidance to between $12 billion and $12.1 billion. That’s up from its prior forecast of $11.5 billion to $11.7 billion, and now expects comparable sales to grow 2.5% to 3.5%, versus its earlier range of flat to 1.5% growth.

Here are the key analysts ratings on the stock:

• Goldman Sachs analyst Kate McShane reiterated the Buy rating on the stock, raising the price forecast from $530 to $584.
• JPMorgan analyst Christopher Horvers maintained an Overweight rating and raised the price forecast from $525 to $600.

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Goldman Sachs: McShane writes that Ulta Beauty's call underscored three points: it lifted its FY25 comparable-sales outlook after a second-quarter top-line beat, the anticipation of higher SG&A growth this year even as FY25 operating-margin guidance moved up, and higher EPS projections, which in McShane's view, justify the stock's recent strength.

Ulta's comp gains appear driven by a healthy cosmetics category and strong execution, with stepped-up investment in marketing, labor, and services translating into share gains.

Retailers face a cloudier second half amid broader price pressures. However, McShane considers management's FY25 top-line outlook conservative given the current momentum.

McShane raises the FY25 EPS estimate by about 2% and the FY26 figure by roughly 6%.

With the stock trading near 21x next-twelve-month P/E, McShane adds that higher earnings this year and next should support further upside in the stock.

JPMorgan: The analyst argued that beauty category growth is reverting to its 3%–4% long-term trend and Ulta's unique mass/prestige mix and advantaged industry position should keep driving share gains.

Horvers expects those gains to translate into better margin flow-through, faster earnings growth, and room for multiple expansion.

The analyst also cites Ulta's loyalty program as a structural data edge—often knowing more about the end customer than the brands—and notes Ulta is the only national beauty retailer that pairs prestige and mass products with services and a market-leading, cross-brand hair-care assortment.

Lastly, Horvers views department stores as long-term share donors.

Price Action: ULTA shares are trading lower by 6.44% to $496.47 at last check Friday.

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