Why These Ulta Beauty Analysts Are Not Impressed With Beat-And-Raise Quarter
Benzinga
Published Aug 25, 2023 16:16
Updated Aug 25, 2023 17:40
Why These Ulta Beauty Analysts Are Not Impressed With Beat-And-Raise Quarter
Benzinga - by Priya Nigam, Benzinga Staff Writer.
Shares of Ulta Beauty Inc (NASDAQ: ULTA) tanked in early trading on Friday, despite the company reporting a beat-and-raise quarter.
The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.
- Telsey Advisory analyst Dana Telsey maintained an Outperform rating and price target of $600.
- Oppenheimer analyst Rupesh Parikh reiterated an Outperform rating and price target of $540.
- William Blair Analyst Dylan Carden reaffirmed an Outperform rating on the stock.
Telsey Advisory: Ulta Beauty reported its second-quarter earnings ahead of the consensus estimate, with the upside being driven by “slightly stronger topline growth and better-than-expected operating deleverage, as gross margin deleverage was greater than expected,” Telsey said in a note.
“The better-than-expected topline growth reflected a 9.0% increase in transactions which more than offset a 1.0% decrease in average ticket, as well as growth across all categories, with DD comps in both prestige and mass skincare, while haircare comps were up MSD and makeup comps improved LSD in the quarter,” the analyst further wrote.
Oppenheimer: Ulta Beauty managed to beat earnings expectations even against “an increasingly difficult retail backdrop and amidst difficult compares,” Parikh said.
The company’s gross margins were adversely impacted by “lower merchandise margins, higher inventory shrink, and higher supply chain costs,” which more than offset “strong growth in other revenue and fixed cost leverage."
William Blair: “The company offset lower gross margin with better cost control, flowing through sales upside for a modest beat on EPS,” Carden wrote.
Management raised their full-year sales guidance “by roughly 0.5% at the midpoint, and raised EPS expectations by 1%,” the analyst said. However, the EPS will likely decline year-over-year in the third quarter “as certain costs associated with the company’s ongoing transformation initiatives shift into the quarter."
ULTA Price Action: Shares of Ulta Beauty had declined by 2.55% to $411.98 at the time of publication Friday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read the original article on Benzinga
Get The App
Written By: Benzinga
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.