Ulta beats and raises, but comps decelerate to 3.8% and UBS trims its target

Ulta Beauty beat on revenue and adjusted earnings for its fiscal second quarter and raised full-year guidance across sales, comps and EPS. The soft spot is the comp itself, which decelerated to 3.8% from 6.7% a year ago, and the analyst response was split: UBS cut its target while keeping Buy, while Goldman Sachs, Jefferies and Raymond James sit between $650 and $700. SentiSense has the stock at $525.00, down 2.8%.

ULTA put up a clean fiscal second quarter after Thursday's close. Revenue was $3.04 billion, up 8.9% year over year against a $2.97 billion consensus, and adjusted earnings were $6.55 a share against $5.78 a year earlier and a consensus in the $6.17 to $6.21 range . Management raised full-year guidance on all three lines: EPS to $28.70 to $29.00 from $28.36 to $28.80, net sales growth to 6.7% to 7.2% from 6% to 7%, and comparable sales growth to 3.2% to 3.7% from 2.5% to 3.5%.

The number that explains the muted reaction is the comp. Comparable sales rose 3.8%, down from 6.7% in the year-ago quarter . A beat-and-raise built on a decelerating comp is a different story from one built on an accelerating one, and it is the deceleration, alongside gross-margin pressure and a run-up into the print, that the coverage points at. SentiSense has the stock at $525.00, down 2.8%, though the reported move varies by session and should be read as a range rather than a single figure.

Analyst targets moved in both directions, which is unusual after a beat. UBS cut its target to $710 from $735 while maintaining Buy, citing rising promotional activity and a modest gross-margin decline. Others sit lower without being bearish: Goldman Sachs at $667, Raymond James at $700 with a reiterated Strong Buy, and Jefferies at $650, all maintained Buy-side ratings. Two further target changes circulating with this print could not be corroborated against a primary note and are deliberately left out here.

SentiSense's consensus band is $450.00 low, $623.54 average and $735.00 high across 24 analysts, with 18 buy, 7 hold and 1 sell across 26 rated. Against a $525.00 print that leaves the average target well above the tape while the highest marks are already being trimmed. What to watch next quarter is whether the comp stabilizes near the raised 3.2% to 3.7% guide or keeps sliding, and whether promotional intensity shows up in gross margin the way UBS expects.

Ulta beats and raises, but comps decelerate to 3.8% and UBS trims its target

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