- Raymond James analyst Olivia Tong reiterates a Strong Buy rating on the shares of Ulta Beauty Inc ULTA with a price target of $600.
- ULTA reported a big beat to end FY22 with F4Q EPS of $6.68, well ahead of Raymond James' estimate of $5.65 and the consensus.
- Comparable sales were up 16% versus Raymond James estimate of +8.5%, and sales increased 18% versus the analyst's estimate and consensus +11%.
- The analyst said strength was broad-based, with each beauty sub-category and mass and prestige growing double-digits y/y.
- Management introduced an FY23 outlook towards the upper end of its medium-term targets on comparable sales and ahead on margins, but it implies a growth deceleration after a very strong FY21/22, added the analyst.
- The deceleration is attributed to challenging comps, an expectation for promotion to pick up that has yet to occur, heavier spending, and more volatile macros, even if it hasn't seen a slowdown and to the contrary, noted that momentum seen during the holiday continued into 1Q, remarked the analyst.
- While mindful of comps, macros, and other risks, the analyst thinks the muted guide sets FY23 up for the continued potential for beats and raises.
- Innovation should continue to sustain demand across categories, the company's more than 40 million plus loyalty members provide an edge should the environment get more promotional, and a greater focus on luxury brands will benefit average ticket size, the analyst said.
- Also Read: Ulta Beauty Underpromises, Overdelivers: 4 Analysts Raise Price Targets After Q4 Print
- Price Action: ULTA shares are trading higher by 0.84% at $524.31 on the last check Friday.
- Photo Via Company
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ULTAUlta Beauty Inc
$458.71-0.08%
Edge Rankings
Momentum
72.83
Growth
82.68
Quality
52.58
Value
56.17
Price Trend
Short
Medium
Long
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