TLDR
- Ulta Beauty reports Q2 earnings Thursday after market close, with analysts expecting EPS of $6.21 on revenue of $3 billion
- The stock is down double digits year to date after selling off following each of the last two earnings reports
- Revenue growth is expected to come in at 6.9% year over year, slowing from 9.3% in the same quarter last year
- Analysts have an average price target of $623.54 versus a current price of $533.95, implying nearly 20% upside
- Two-thirds of analysts tracked by FactSet are bullish, though margin pressure from marketing spend remains a key concern
Ulta Beauty reports Q2 results Thursday after the bell. The stock is down double digits year to date and is coming off back-to-back post-earnings selloffs in March and June.
Wall Street is expecting EPS of $6.21 on revenue of $3 billion. That would represent revenue growth of 6.9% year over year, a step down from the 9.3% growth posted in the same quarter last year.
The stock is currently trading around $533.95. The average analyst price target sits at $623.54, which implies roughly 17% upside from current levels.
Two-thirds of analysts tracked by FactSet carry a bullish rating on the stock.
Last quarter, Ulta beat revenue estimates, posting $3.16 billion, up 11.1% year over year. Gross margins also came in ahead of expectations, though full-year EPS guidance fell slightly short.
Analysts have largely held their estimates steady over the past 30 days, suggesting they expect a steady performance heading into the print.
Ulta rarely misses Wall Street’s revenue estimates, which gives bulls some comfort going in.
Margin Pressure in Focus
Investors have flagged ongoing spending on marketing and other initiatives as a drag on profitability. The concern is that rising costs are eating into margins even as top-line growth continues.
Ulta lost its dedicated shelf space in Target, removing one visibility channel just as Target shows signs of a recovery.
Beauty Demand Still Holding Up
Estée Lauder posted a strong quarter last week, which lifted sentiment around consumer demand for prestige beauty products. Whether Ulta sees similar trends in its own numbers remains to be seen.
Ulta does benefit from exclusive product lines and a loyal customer base, both of which could help support results.
Peers in specialty retail have had mixed quarters. Warby Parker grew revenue 9.8% but missed estimates and fell 9.6% after reporting. Sally Beauty came in flat, in line with expectations, and rose 10.6% post-earnings.
Investors in the specialty retail segment have kept steady hands going into earnings season, with the group roughly flat over the past month. Ulta is up 11.1% over that same stretch.
After two tough earnings reactions, some investors may be positioned for a better-than-feared result. Consumer spending on beauty products has remained resilient, which could provide some support.
The stock’s current discount to its average analyst price target of $623.54 reflects both the uncertainty and the potential upside heading into Thursday’s report.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
