Ulta Beauty Shares Rise Amid Mixed Earnings Outlook

Ulta Beauty is showing positive momentum heading into its second-quarter fiscal 2025 earnings report, with strong sales and international expansion plans despite margin pressures and changing consumer behavior. Analysts have generally raised price targets and maintain mostly positive or neutral ratings, with Canaccord Genuity increasing its target to $630 and Telsey Advisory Group raising earnings estimates and price forecasts, while William Blair and Citi remain cautious with Hold ratings due to potential margin impacts from online growth and retail challenges. Ulta's recent quarter beat earnings and revenue expectations, reporting $6.70 EPS and $2.85 billion in revenue, supported by a return to growth and strategic initiatives such as the acquisition of U.K. retailer Space NK and expansion into Mexico and the Middle East. The company plans to end its Target shop-in-shop program by 2026 to focus on core retail, while projecting fiscal 2025 sales between $11.5 billion and $11.7 billion and EPS of $22.65 to $23.30, though operating margins are expected to decline amid cost pressures. Analysts also note a slight increase in store count and square footage, reflecting Ulta's ongoing physical retail footprint growth. Overall, the beauty retailer faces a balancing act between sustaining growth and managing margin contraction in a stabilizing but competitive market.