Core Viewpoint - The market anticipates a year-over-year decline in Ulta Beauty's earnings despite an increase in revenues for the quarter ending April 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Ulta Beauty is expected to report quarterly earnings of $5.75 per share, reflecting an 11.1% decrease year-over-year, while revenues are projected to reach $2.79 billion, a 2.2% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.31% higher in the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading, which is currently at +0.23% for Ulta, indicates a likelihood of beating the consensus EPS estimate [10][11]. Historical Performance - Ulta has exceeded consensus EPS estimates in three out of the last four quarters, with a notable surprise of +19.15% in the last reported quarter [12][13]. Additional Considerations - While an earnings beat can influence stock movement, other factors may also play a significant role in determining stock performance post-earnings release [14][16].

Company Performance - Ulta Beauty's stock closed at $410.09, reflecting a -0.7% change compared to the previous day, underperforming the S&P 500's gain of 0.09% [1] - Over the past month, Ulta Beauty's shares have increased by 15.44%, surpassing the Retail-Wholesale sector's gain of 13.17% and the S&P 500's gain of 13.05% [1] Upcoming Earnings - The upcoming earnings report for Ulta Beauty is scheduled for May 29, 2025, with an expected EPS of $5.73, indicating an 11.44% decrease from the same quarter last year [2] - The consensus estimate projects revenue of $2.79 billion, which represents a 2.19% increase from the equivalent quarter last year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates predict earnings of $23.03 per share and revenue of $11.57 billion, reflecting changes of -9.12% and +2.42% respectively from the previous year [3] Analyst Estimates and Stock Performance - Recent changes in analyst estimates for Ulta Beauty are crucial as they often indicate the latest business trends, with positive revisions suggesting a favorable outlook on the company's health and profitability [3][4] - The Zacks Rank system, which assesses estimate changes, currently ranks Ulta Beauty at 3 (Hold) [5] Valuation Metrics - Ulta Beauty has a Forward P/E ratio of 17.93, which is higher than the industry's average Forward P/E of 13.79 [6] - The company also has a PEG ratio of 2.45, compared to the Retail - Miscellaneous industry's average PEG ratio of 2.33 [6] Industry Context - The Retail - Miscellaneous industry, part of the Retail-Wholesale sector, holds a Zacks Industry Rank of 43, placing it in the top 18% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - Ulta Beauty's stock has increased by 12.9% over the past month, while the industry and S&P 500 have grown by 16.1% and 15.4% respectively, prompting investors to consider whether to hold or take profits [1] Company Strategy and Performance - Ulta Beauty has transformed the beauty industry by combining mass, prestige, and luxury brands in an accessible shopping environment, which has driven significant profitable growth [3] - The company maintains a balanced approach between online and physical stores, with e-commerce sales growing mid-single digits in Q4 of fiscal 2024, reflecting a shift towards digital beauty shopping [4] - The skincare category has seen mid-single-digit comparable sales growth in Q4 of fiscal 2024, driven by strong demand for body care and new brands like Sol de Janeiro, Naturium, and TATCHA [5] Challenges and Concerns - The fourth-quarter results revealed a mid-single-digit decline in comparable sales for the makeup category, primarily due to softness in mass makeup, which is critical for driving traffic and sales [6] - Rising operating expenses are a concern, with SG&A expenses increasing to 23.4% of net sales in Q4 of fiscal 2024, up from 23.1% the previous year, and expected to rise approximately 10% in fiscal 2025 due to strategic investments and higher payroll costs [7][8] Valuation - Ulta Beauty is trading at a forward 12-month price-to-earnings multiple of 17.38X, which is above the industry average of 16.81X, indicating potential overvaluation relative to its fundamentals [9] Investment Outlook - The recent stock rally reflects investor optimism driven by strong skincare performance, a resilient omnichannel strategy, and ongoing innovation, but challenges in the makeup category and rising expenses suggest the stock may be pricing in near-term perfection [12]

Group 1 - Bridgewater Associates made significant adjustments to its investment portfolio in Q1 2025, focusing on technology, consumer, and financial sectors [1] - The fund increased its holdings in streaming giant Netflix by 30,500 shares, while reducing its stake in semiconductor equipment leader Lam Research by 570,000 shares to 1.96 million shares [1] - Bridgewater's adjustments reflect a "new and old" transition in tech stocks, maintaining stable positions in cloud computing while reducing traditional hardware suppliers [1] Group 2 - In the consumer sector, Bridgewater's holdings in e-commerce giant Alibaba surged from 255,000 shares to 5.66 million shares, an increase of over 21 times, while completely exiting its position in cosmetics retailer Ulta Beauty [2] - The fund exited its positions in four healthcare companies, including 3M, Amgen, Herbalife, and Teva Pharmaceuticals, contrasting with its continued investment in technology stocks [2] - Bridgewater's strategy indicates a focus on the recovery of consumption in the post-pandemic era and opportunities in technology innovation [2] Group 3 - The fund's holdings in Microsoft increased from 667,000 shares to 809,400 shares, while reducing its stake in eBay by 450,000 shares to 1.33 million shares, indicating structural adjustments within tech stocks [2] - In the financial sector, Bridgewater adopted a strategy of "increasing top-tier holdings while reducing tail-end positions," increasing its stake in Goldman Sachs while remaining cautious about regional financial institutions [2] - Overall, the portfolio adjustments reveal three key investment logics: betting on structural opportunities in tech due to accelerated digital transformation, optimism about recovery in sectors like aviation and payments, and optimizing risk-return profiles through increased industry concentration [2]

Core Viewpoint - Ulta Beauty is expected to experience a temporary decline in earnings per share (EPS) in fiscal year 2025 due to significant investments under the "Ulta Beauty Unleashed" strategy, but a strong recovery is anticipated in fiscal year 2026, outperforming market expectations [2][3][11] Group 1: Financial Projections - EPS for fiscal year 2025 is projected to be $22.70, a decrease of 10.4% from fiscal year 2024, while fiscal year 2026 EPS is expected to rebound to $24.50, exceeding Wall Street's forecast by 7.3% [3][11] - Analysts are using a blended price-to-earnings (P/E) ratio of 16.5x for fiscal year 2025 and 20.0x for fiscal year 2026, leading to a target price of $432.81, representing a 12% upside [7][9] Group 2: Strategic Initiatives - The "Ulta Beauty Unleashed" strategy is expected to drive high-margin revenue growth through enhanced e-commerce capabilities and a robust loyalty program with 44.6 million members [2][4] - Cost optimization initiatives aiming for $200 million to $250 million in savings will fully materialize in fiscal year 2026, further improving operating profit margins [3][4] Group 3: Market Position and Competitive Landscape - Ulta's loyalty program is a significant asset, providing detailed customer insights that enable personalized marketing strategies, enhancing customer engagement and loyalty [4][5] - The upcoming Mirakl e-commerce platform will allow Ulta to expand its product offerings without increasing inventory risks, differentiating it from competitors [6] Group 4: Risks and Market Dynamics - The competitive landscape remains intense, with pressures from new entrants and established players, which could impact market share and profitability [9][10] - Macro pressures, including high debt levels and cautious consumer spending, may pose risks to the anticipated recovery in high-margin beauty products [10]

Group 1 - The article initiates coverage on Ulta Beauty (NASDAQ: ULTA) with a Buy rating and a price target of $432.81, highlighting it as the largest dedicated beauty retail network in the U.S. with over 1,300 stores and strong digital channels [1] - Ulta Beauty offers a range of products and services including cosmetics, skincare, salon services, and private-label products, indicating a diversified business model [1] - Moretus Research employs a structured framework to identify companies with durable business models and mispriced cash flow potential, focusing on U.S. public markets [1] Group 2 - The research emphasizes rigorous fundamental analysis combined with a judgment-driven process, aiming to provide clarity and actionable insights for investors [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model, emphasizing comparability and simplicity [1] - Moretus Research targets underappreciated companies undergoing structural changes or temporary dislocations, which can lead to asymmetric returns for investors [1]

Core Viewpoint - Ulta Beauty's stock performance has shown a recent decline, but it has outperformed the Retail-Wholesale sector and the S&P 500 over the past month, indicating potential resilience in its market position [1]. Financial Performance - Ulta Beauty is expected to report earnings of $5.73 per share on May 29, 2025, reflecting a year-over-year decline of 11.44%. Revenue is projected to be $2.79 billion, representing a 2.19% increase compared to the same quarter last year [2]. - For the entire fiscal year, earnings are estimated at $23.01 per share, down 9.19% from the previous year, while revenue is expected to reach $11.57 billion, up 2.41% [3]. Analyst Estimates - Recent modifications to analyst estimates for Ulta Beauty indicate changing business trends, with upward revisions suggesting analysts' optimism about the company's profitability [4]. - The Zacks Rank system, which reflects these estimate changes, currently rates Ulta Beauty as 3 (Hold), with a slight decrease of 0.15% in the consensus EPS estimate over the last 30 days [6]. Valuation Metrics - Ulta Beauty's Forward P/E ratio stands at 17.14, which is higher than the industry average of 14.21, indicating a premium valuation [7]. - The company's PEG ratio is 2.34, compared to the industry average of 1.53, suggesting that Ulta Beauty's expected earnings growth is factored into its valuation [7]. Industry Context - The Retail - Miscellaneous industry, which includes Ulta Beauty, has a Zacks Industry Rank of 155, placing it in the bottom 38% of over 250 industries, indicating weaker performance relative to other sectors [8].

Ulta Beauty, Inc. (ULTA) and Bath & Body Works, Inc. (BBWI) are two leading retailers in the beauty space with loyal customer bases and well-established brand recognition. Ulta Beauty stands out as a full-service beauty destination, offering everything from skincare and cosmetics to haircare and salon services. Meanwhile, Bath & Body Works focuses on a narrower but highly profitable niche — dominating the personal care and fragrance space with a strong brand and high-margin product lines.As we move through ...

In the latest trading session, Ulta Beauty (ULTA) closed at $361.46, marking a +1.83% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 1.81% for the day. Elsewhere, the Dow gained 1.56%, while the tech-heavy Nasdaq added 2.06%.Shares of the beauty products retailer have appreciated by 12.87% over the course of the past month, outperforming the Retail-Wholesale sector's loss of 5.27% and the S&P 500's loss of 6.14%.Investors will be eagerly watching for the performance o ...

I am an independent analyst and investor interested in investing at the intersection of value and growth. My method is a highly qualitative focus on mostly small caps, looking for both long term compounders as well as some special situations. On Twitter @GrowthyValueAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinion ...