Ulta Beauty Stock Rises After Smashing Consensus and Hiking Outlook, Jefferies Upgrades to Buy By Investing.com

By Senad Karaahmetovic

Shares of Ulta Magnificence (NASDAQ:) are up greater than 9% in premarket buying and selling Friday after the corporate hiked its EPS and income steerage for the complete 12 months, topping the analyst estimates.

ULTA a Q1 EPS of $6.30, in comparison with $4.10 within the year-ago interval and crushing the consensus estimates of $4.45 per share. Internet gross sales stood at $2.35 billion, up 21% YoY and above the consensus projection of $2.12 billion.

Comparable gross sales rose 18% within the interval, in comparison with the 65.9% development within the year-ago interval, whereas analysts have been projecting development of seven.72%. The Q1 gross margin stood at 40.1%, in comparison with 38.9% within the year-ago interval, whereas analysts have been anticipating 38.5%. Ulta reported $1.57 billion in merchandise inventories, up 16% YoY and topping the analyst expectations of $1.53 billion.

For the FY 2023, the corporate expects EPS within the vary of $19.20 to $20.21, up from the prior forecast of $18.20 to $18.70, and topping the projected $18.82 per share. Ulta expects FY internet gross sales to land between $9.35 billion and $9.55 billion, up from $9.05 billion to $9.15 billion, and in comparison with the estimates of $9.19 billion.

Piper Sandler analyst Korinne Wolfmeyer hiked the value goal to $485.00 per share from $465.00 after the corporate delivered “a robust Q1 report that beat throughout just about all metrics and raised steerage on the highest and backside strains.”

“Shoppers are returning to the shops able to spend, and make-up is lastly seeing a rebound. Whereas there are a variety of things impacting margins (primarily macro-driven plus some strategic investments), administration nonetheless raised EBIT steerage by ~40bp on the mid-point, and we expect that might even be conservative. Long run, we proceed to love the trajectory right here and assume there’s alternative for upside as one of many extra resilient names in magnificence continues to develop and scale,” Wolfmeyer instructed shoppers.

Jefferies analyst Stephanie Wissink upgraded ULTA from Maintain to Purchase with a value goal of $475.00 (from $400.00).

The analyst wrote that ULTA’s outcomes present that demand had returned to pre-pandemic ranges with enhancing and sustained momentum.