Is Ulta Beauty (ULTA) Stock Turning a Corner After Q1 Beat?

TLDR

• Ulta Beauty posted Q1 adjusted EPS of $7.74, well above the $6.89 analyst estimate — a 15.5% year-over-year jump.
• Net sales rose 11.1% to $3.16 billion, topping the $3.12 billion Wall Street expected.
• Comparable store sales grew 5.3%, beating the 4.7% estimate, driven by more transactions and larger basket sizes.
• ULTA stock climbed as much as 7.5% in after-hours trading Tuesday, trading above $532 before pulling back.
• Ulta raised the lower end of its full-year EPS guidance to $28.36–$28.80, up from $28.05–$28.55.

Ulta Beauty (ULTA) stock jumped as much as 7.5% in extended trading Tuesday after the beauty retailer posted first-quarter results that topped Wall Street expectations on both revenue and earnings, and lifted its full-year outlook.

Ulta Beauty, Inc., ULTA

For the quarter ended May 2, ULTA reported adjusted earnings of $7.74 per share on net sales of $3.16 billion. Analysts had expected EPS of $6.89 and revenue of around $3.12 billion, per FactSet and LSEG data. By Wednesday premarket, the stock was up about 1%, having closed regular trading Tuesday down 1.2% at $494.87.

The stock is down 18.2% year-to-date through Tuesday, though it has gained 4.6% over the past 12 months.

Comparable store sales rose 5.3%, ahead of the 4.7% estimate. Transactions increased 1.6% while the average ticket size rose 3.7% — both pointing to more customers spending more per visit.

Gross profit jumped 13.8% to $1.3 billion. Gross margin expanded to 40.1% from 39.1% a year ago, helped by lower inventory shrink and better merchandise margins, CFO Chris DelOrefice said.

Growth Drivers

Fragrances were the standout category, growing from 11% to 12% of total revenue. Cosmetics accounted for 40% of purchases, followed by skincare and wellness at 24%, haircare at 18%, and fragrances at 12%.

Ulta launched its TikTok Shop during the quarter and hosted its first-ever shoppable livestream, racking up more than 5 million impressions. The company also added more than 20 new brands, including Selena Gomez’s Rare Beauty.

Membership in Ulta’s loyalty program grew 4% to nearly 47 million members — a number the company leans on for repeat purchases and long-term retention.

Guidance Update

Ulta raised the lower end of its full-year earnings guidance. It now expects EPS of $28.36 to $28.80, up from the prior range of $28.05 to $28.55. Full-year net sales growth guidance of 6% to 7% and comparable sales growth of 2.5% to 3.5% were left unchanged.

Capital expenditure guidance also held steady at $400 million to $450 million for the year.

Ulta operates 1,521 U.S. stores and 87 international locations, including a store at the Dubai Mall. The company opened 16 net new stores during the quarter.

On May 27, Ulta announced an exclusive partnership with the upcoming Supergirl film, featuring three themed beauty looks and products from brands including Sol de Janeiro and OPI. The film opens June 26.

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