Ulta Beauty fell Friday after providing a soft forecast during its Q4 earnings beat late Thursday. Still, analysts remain largely positive on ULTA stock.
Specialty cosmetics brand Ulta Beauty reported a 21% increase in Q4 earnings to $8.08 per share while revenue rose 10.2% to $3.55 billion. FactSet analysts expected earnings of $7.53 per share on $3.53 billion in sales.
Ulta's earnings declined 5% in Q3 after three quarters of slowing earnings growth.
Comparable sales rose 2.5% in Q4, slowing from 15.6% growth for the same quarter last year.
Full-year earnings increased more than 8% to $26.03 per share, coming in ahead of FactSet estimates of $25.50 per share. Revenue in 2023 climbed nearly 11% to $11.2 billion, edging out forecasts of $11.18 billion.
Comparable sales growth fell to 5.7% for the year from 15.6% in fiscal 2022.
However, Ulta's full-year outlook came up short of FactSet estimates.
The company guided expectations for net sales to between $11.7 billion and $11.8 billion for fiscal 2024. It targeted comparable sales from 4% to 5% growth. Ulta Beauty guided earnings between $26.20 and $27 per share. It expects to repurchase about $1 billion in stock during 2024. FactSet analysts expect earnings of $27.03 per share on $11.77 billion in sales.
Still, analysts were unfazed by the outlook and broadly raised price targets on ULTA stock.
Baird raised its price target on Ulta Beauty to $625 and $575 early Friday and kept an outperform rating on shares.
Piper Sandler early Friday noted that margin concerns are overblown. Ulta's Q4 operating margin improved to 14.5% from 13.8% the year prior. Piper Sandler sees room to work back to 15% beyond this year. The firm lifted its price target to $665 from $635 and kept an overweight rating on the shares.
Meanwhile, DA Davidson analyst Michael Baker views the early sell-off as a buying opportunity. Baker maintained a $595 price target on ULTA stock and buy rating, noting competitive pressures will ease as Kohl's Sephora beauty brand growth likely peaked in 2023.
Ulta Beauty Stock
Ulta Beauty shares retreated 5.2% Friday on results.
Shares are extended from a cup-with-handle base breakout in late January, MarketSurge charts show.
ULTA stock is up 9.4% in 2024 and vaulted more than 45% from its Oct. 23 lows.
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