Ulta Beauty Inc. (NASDAQ:ULTA) shares fell Friday as investors digested the retailer’s latest quarterly results and outlook.
Analysts also adjusted their outlooks following the results. Wells Fargo analyst Ike Boruchow maintained an Underweight rating on Ulta Beauty while lowering his price forecast to $475 from $500. Meanwhile, TD Cowen analyst Oliver Chen reiterated a Buy rating but trimmed his price forecast to $750 from $775.
Fourth Quarter Results
Ulta reported fourth-quarter EPS of $8.01, topping the Street estimate of $7.97. Revenue came in at $3.898 billion, beating the $3.802 billion consensus estimate and rising 11.75% from $3.488 billion a year earlier.
Comparable sales increased 5.8%, driven by a 4.2% rise in average ticket and a 1.6% increase in transactions.
Gross profit rose 11.2% to $1.5 billion, while gross margin edged slightly lower to 38.1% from 38.2%.
This was primarily due to unfavorable channel mix, deleverage of store fixed expenses, and deleverage of other revenue, mostly offset by lower inventory shrink and supply chain efficiencies.
SG&A expenses increased 23% to $1.0 billion, driven by higher corporate overhead, advertising spending, and incentive compensation.
Operating income was $476.9 million, or 12.2% of net sales, compared with $516.3 million, or 14.8%, a year earlier.
Full-Year Results
For fiscal 2025, net sales rose 9.7% to $12.4 billion, while comparable sales increased 5.4%, driven by a 3.3% increase in average ticket and a 2.0% rise in transactions.
Gross profit increased 10.4% to $4.8 billion, with gross margin improving to 39.1% from 38.8%. SG&A expenses rose 17.4% to $3.3 billion.
Operating income totaled $1.5 billion, or 12.4% of net sales, while diluted EPS increased 1.2% to $25.64.
Looking ahead, Ulta guided fiscal 2026 GAAP EPS to a range of $28.05 to $28.55 versus the $28.38 analyst estimate. The company also issued a revenue outlook of $13.14 billion to $13.26 billion, compared with the $13.06 billion estimate.
“We are optimistic about the opportunities ahead, while remaining mindful and cautious as we navigate in an environment with ongoing global uncertainty and potential economic volatility,” CEO Kecia Steelman said on the earnings call.
Steelman cited “increasingly mindful” concerns over global conflicts and a “normalized” beauty environment as reasons for the conservative outlook.
Technical Analysis
Ulta is trading 15.8% below its 20-day SMA and 6.8% below its 100-day SMA, a setup that signals the short-term trend has weakened even as the longer-term structure is being tested. Shares are up 79.90% over the past 12 months, and the stock is currently positioned closer to its 52-week highs than lows.
RSI is at 35.92, which is neutral territory but close to the oversold zone where selling pressure can become stretched. Meanwhile, MACD is at -6.8639 versus a signal line of -0.3424, a bearish configuration that suggests downside momentum is still in control.
The combination of neutral-to-weak RSI (below 50) and bearish MACD suggests mixed momentum.
- Key Resistance: $612.00
- Key Support: $493.00
Earnings & Analyst Outlook
Looking further out, the next major catalyst for the stock arrives with the May 28, 2026 (estimated) earnings report.
- EPS Estimate: $7.26 (Up from $6.70 YoY)
- Revenue Estimate: $3.09 Billion (Up from $2.85 Billion YoY)
- Valuation: P/E of 24.0x (Suggests fair valuation relative to peers)
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $694.28. Recent analyst moves include:
- Wells Fargo: Underweight (Lowers Target to $475.00) (Mar. 13)
- TD Cowen: Buy (Lowers Target to $750.00) (Mar. 13)
- Telsey Advisory Group: Outperform (Maintains Target to $715.00) (Mar. 9)
Performance Metrics
Below is the Benzinga Edge scorecard for Ulta Beauty, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Bullish (Score: 91.24) — The longer-term trend has been strong versus the broader market, even with the current pullback.
- Quality: Strong (Score: 83.22) — The score points to solid underlying business quality relative to peers.
- Value: Neutral (Score: 48.7) — Valuation looks closer to the middle of the pack rather than clearly cheap or expensive.
The Verdict: Ulta Beauty’s Benzinga Edge signal reveals a momentum-led setup with strong underlying quality. The main tension is that value is only mid-range, so traders often treat sharp dips as trend tests rather than automatic bargains.
Top ETF Exposure
- Franklin US Mid Cap Multifactor Index ETF (BATS:FLQM): 1.24% Weight
- Invesco NASDAQ Next Gen 100 ETF (NASDAQ:QQQJ): 1.50% Weight
- AGF US Market Neutral Anti-Beta Fund ETF (NYSE:BTAL): 0.58% Weight
Significance: Because ULTA carries significant weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.
ULTA Price Action: Ulta Beauty shares were down 10.10% at $561.58 at the time of publication on Friday, according to Benzinga Pro data.
Photo by Gregory C Sanders via Shutterstock
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