Ulta Beauty(US:ULTA) Benzingaยท2025-08-25 16:22Core Viewpoint - Ulta Beauty Inc. is entering its second-quarter earnings report with strong sales momentum and international expansion plans, despite facing margin pressures and changing consumer spending patterns [1]. Financial Performance - The company is expected to report second-quarter fiscal 2025 results on August 28, with earnings projected at $5.07 per share, an increase from the previous estimate of $4.87 but down from $5.30 a year ago [3]. - Revenue is forecasted to rise by 4.7% year-over-year to $2.67 billion, slightly above consensus estimates of $2.66 billion [4]. - Gross margins are anticipated to narrow by 20 basis points to 38.1%, while operating margins are expected to contract by 160 basis points to 11.3% [4]. Analyst Ratings and Forecasts - Telsey Advisory Group analyst Dana Telsey raised her price forecast for Ulta to $590 from $520, reflecting a 21.4x multiple on forward earnings, which is above recent trading levels but below Ulta's 10-year average [2]. - For fiscal 2025, Ulta reaffirmed guidance with sales expected between $11.5 billion and $11.7 billion and earnings per share between $22.65 and $23.30, while Telsey raised her EPS estimate to $23.45 [6]. Strategic Developments - Recent corporate updates include the planned conclusion of Ulta's Target shop-in-shop program in 2026, the acquisition of U.K.-based retailer Space NK, and international expansion initiatives in Mexico and the Middle East [5]. - Leadership changes are ongoing under new CEO Kecia Steelman, who took over in June following the departure of CFO Paula Oyibo [5]. Market Sentiment - Analysts from JPMorgan, Barclays, Oppenheimer, Canaccord, and DA Davidson have raised their price forecasts for Ulta, reflecting optimism despite margin challenges [8]. - Telsey highlighted consumer spending trends as a significant risk for the latter half of the year, with fragrance being a standout category while skincare, wellness, and makeup show mixed performance [7].