Ulta Pops on Beat-and-Raise Report, Company Seen as a 'Relative Star of Positivity' in Retail Sector

Shares of Ulta Beauty (NASDAQ: ULTA) are trading over 3% higher in pre-open Friday after the company reported robust results and raised its full-year forecast.

Ulta crushed Q2 estimates by reporting an EPS of $5.70, which compares to the analyst estimate of $4.90. Revenue for the quarter came in at $2.3 billion versus the consensus estimate of $2.19 billion. Comparable sales came in at +14.4% to smash the consensus estimate of +10.3%.

Ulta also raised its full-year forecast to now see revenue between $9.65 billion and $9.75 billion, from the prior range of $9.35 billion to $9.55 billion, and higher than the estimate of $9.63 billion.

EPS is seen between $20.70 and $21.20, much higher than the prior range of $18.20 to $18.70. Similarly, comparable sales are now forecasted at +9.5% to +10.5% from the previous +6% to +8%, while analysts were looking for +8.2%.

Stifel analyst Mark Astrachan raised the price target to $450 from $435 to reflect “strong” results.

“The strong 2Q results indicates Ulta continues to gain meaningful share of a U.S. beauty market likely growing in the mid-single-digits. We lift 2022-2023 EPS estimates for the F2Q22 upside and to reflect a 53rd week in F2023,” Astrachan said in a client note.

Wells Fargo analyst Ike Boruchow said Ulta “continues to be a relative star of positivity in our retail coverage thus far in 2022.”

“The business remains robust and the guidance remains conservative,” Boruchow told clients in a note.

By Senad Karaahmetovic

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