Ulta Beauty Inc. (ULTA) delivered a pleasant surprise Thursday, sending shares climbing nearly 14% to $607.14 in Friday trading after the beauty retailer posted third-quarter results that had analysts reaching for their calculators.
The numbers tell a story of surprising strength in a retail environment where everyone's walking on eggshells. Net sales jumped roughly 12.9%, powered by market share gains across prestige skincare, prestige fragrances, and mass makeup. Not just one category carrying the load—actual broad-based strength.
What the Analysts Are Saying
JPMorgan's Christopher Horvers came away impressed enough to raise his price target from $606 to $647 while maintaining an Overweight rating. He pointed out that Ulta's sales growth came from gains across categories, price points, and channels—basically everywhere you'd want to see momentum.
The company bumped up its full-year guidance substantially. New targets: $12.3 billion in sales, comparable store sales growth of 4.4% to 4.7%, and earnings between $25.20 and $25.50 per share. Compare that to the previous outlook of $12.0 to $12.1 billion in sales, comps of 2.5% to 3.5%, and earnings of $23.85 to $24.30 per share. That's not just a tweak—it's a meaningful upgrade.
Horvers noted the raised guidance reflects both the third-quarter beat and "a stronger-yet-cautious" fourth-quarter outlook. Management cited strong Black Friday and Cyber Monday performances but tempered enthusiasm with references to continued macro and consumer uncertainty. The phrase "cautiously optimistic view of the holiday season" appeared in management commentary, acknowledging "how much lies ahead and broader consumer pressures/uncertainty."
Guggenheim Securities analyst Steven Forbes, who maintains a Neutral rating, called the results strong with net sales and adjusted EBITDA "meaningfully" surpassing expectations. The gross margin expansion caught his attention too—about 70 basis points year-over-year, driven by improvements in shrink, merchandise margins, and other revenue.
Forbes added an interesting caveat: the magnitude of the beat and management's commentary on quarter-to-date trends suggest the fourth-quarter outlook isn't particularly conservative. Translation: don't expect another massive surprise when next quarter rolls around.
