Ulta Beauty Inc (ULTA) shares took a tumble on Friday after the company reported a disappointing second-quarter earnings miss. The news came amidst a flurry of earnings reports during an exciting earnings season. Multiple analysts weighed in on the results, offering their perspectives on Ulta’s performance and future outlook.
Analyst Kate McShane maintained a Neutral rating on Ulta Beauty while reducing the price target from $412 to $398. McShane attributed the decline in same-store sales, which fell by 1.2%, to a combination of lower transactions and higher ticket prices. She further noted that the company continued to lose market share in prestige products, particularly in makeup and hair, citing increased competition and an increasingly value-conscious consumer.
Another analyst, Mark Astrachan, reiterated a Hold rating on Ulta Beauty shares while cutting the price target from $475 to $385. Astrachan expressed disappointment with the company’s quarterly results, highlighting that EBIT (Earnings Before Interest and Taxes) missed consensus estimates and that comparable store sales were weaker than anticipated. He also pointed to a reduction in the company’s full-year guidance across key metrics.
Analyst Simeon Siege maintained a Market Perform rating while slashing the price target from $500 to $385. He noted that Ulta Beauty’s revenue fell short of consensus estimates, with a 1.2% decline in comparable store sales. While digital sales accelerated during the quarter, Siege highlighted that the company’s overall sales decelerated throughout the second quarter, with July being particularly challenging. He also expressed concerns about the company’s rising inventory levels.
Analyst Korinne Wolfmeyer reaffirmed a Neutral rating while reducing the price target from $404 to $356. Wolfmeyer expects the decline in same-store sales to continue into the fiscal third and fourth quarters, citing worsening spending trends. While August saw some improvement in trends, Wolfmeyer pointed out that the midpoint of the company’s guidance still suggests an overall deceleration.
In contrast to the more cautious views expressed by other analysts, Christopher Horvers reiterated an Overweight rating and a price target of $450. He acknowledged the decline in second-quarter comparable store sales and the contraction in gross margins but emphasized that the company’s management team is actively working to re-accelerate the business.
Ulta Beauty’s stock price declined by 2.33% to $359.30 at the time of publication on Friday. The company’s future performance remains uncertain, with analysts offering a range of perspectives on the challenges and opportunities ahead. The company’s upcoming October Analyst Day, where they will provide a long-term outlook, is likely to be closely watched by investors and analysts alike.
