'Terrifically beautiful', 'Rarity in retail'... Analysts heap praise on Ulta after strong earnings

Ulta Beauty (NASDAQ: ULTA) delivered another strong earnings report to see its shares trade modestly higher in pre-open Friday.

Ulta posted earnings per share of $5.34 on revenue of $2.3 billion to beat the analyst consensus for earnings of $4.09 on sales of $2.2B. Comparable sales rose 14.6%, driven by a 10.7% rise in transactions and a 3.5% increase in the average ticket.

"Our third quarter results reflect the sustained resilience of the beauty category and the strong emotional connection and loyalty we have cultivated with our guests. I am confident our business model, which offers unmatched breadth, value, and convenience, is even more relevant today and unlocks opportunities to further delight guests as we continue to lead the beauty category," stated Dave Kimbell, Ulta Beauty's chief executive officer.

On the back of strong earnings for the third quarter, Ulta raised its full-year guidance for EPS to a range of $22.60-22.90, crushing the analyst consensus of $21.40. Revenue is seen in the range of $9.95-10B, topping the consensus of $9.77B. Ulta also raised its full-year forecast for comparable sales, which are now seen growing 12.6-13.2% from the prior 9.5-10.5%.

Piper Sandler analyst Korinne Wolfmeyer hiked the price target to $570 from the prior $525 per share to reflect a “clean beat/raise” quarter.

“The beat and raise story is ongoing at ULTA, and the company is proving itself as not only one of the more resilient names in beauty, but a name with strong momentum that's likely to persist… With all categories growing double digits and loyalty members reaching a record 39M, ULTA is proving its ability to drive engagement and capture share despite a tougher macro backdrop, and we continue to view it as a name to own in beauty,” Wolfmeyer said in a note.

Deutsche Bank analyst Krisztina Katai raised the price target to $607 from $589 per share.

“The bottom line is the stock remains well positioned to outperform driven by a continued upward estimate revision cycle. Buy,” Katai urged clients.

By Senad Karaahmetovic

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