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The company reported second quarter earnings per share of $6.02 on revenue of $2.53 billion. Analysts expected earnings per share of $5.83 on revenue of $2.50B. Comparable store sales rose 8% in the quarter, slowing from 14.4% one year ago.
CEO Dave Kimbell said: “The beauty category has continued to deliver healthy growth, as consumers maintain their post-pandemic routines and expand their definition of beauty.”
The company forecasts full-year profit of $25.10 to $25.60 a share and revenue of $11.05B to $11.15B, both higher than earlier forecasts. It also expects full-year comparable sales to rise 4.5% to 5.5%.
TD Cowen analysts reiterated a Top Beauty Idea designation on ULTA stock.
“We continue to see the resilience of the category and ULTA’s mass and prestige offering resonating with ~42mm loyalty members. 2H23 is expected to see deceleration in growth given tough comparisons, but guidance reflects management’s conservatism, in our view. Valuation is compelling vs. growth prospects,” they said.
DA Davidson analysts added:
“After posting an inline quarter in 1Q23 with some more tepid guidance, ULTA is back on the beat and raise path. The quarter wasn’t perfect and comps did slow a bit from last quarter, although less than expected. But there were more positives than concerns and full year estimates should go up even,” they said.
“The back half estimates will be rebalanced between 3Q and 4Q, but to us, that sets up for another beat next quarter particularly as the back half comp outlook seems conservative. Beyond the short term, we think 2023 will be a peak investment year, meaning margin should reaccelerate in 2024.”
Additional reporting by Senad Karaahmetovic
