Beauty retailer Ulta Beauty (ULTA) had a strong second quarter, with profit and sales both beating Wall Street’s expectations. The company’s gross profit margin also improved by 90 basis points, despite higher costs. In addition, same-store sales rose by 6.7%, the best in two years, thanks to more shoppers and higher average spending. However, even with these positive results, Ulta’s stock is down at the time of writing due to its cautious guidance for the rest of the year.
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Looking ahead, Ulta expects its full-year 2025 same-store sales to grow between 2.5% and 3.5%. That’s better than its earlier forecast of flat to up 1.5%, but still a clear slowdown from the strong Q2 results. Interestingly, analysts believe that Ulta is being cautious because of uncertain economic conditions and tougher comparisons in the second half. Indeed, some experts, like DA Davidson’s 4.5-star analyst, Michael Baker, think comps could still reach 3% to 4%, while Evercore ISI’s four-star analyst, Michael Binetti, says Ulta’s guidance may be overly conservative.
Even with the cautious outlook, many analysts still see long-term potential. This is because Ulta is exiting its partnership with Target (TGT), expanding into Mexico, and acquiring Space NK. It’s also focusing on exclusive launches—like Fenty Skin Body—and bold marketing at major events like Lollapalooza, Coachella, and Beyoncé’s tour. As a result, analysts believe that these moves position Ulta for continued growth.
Is ULTA Stock a Good Buy?
Overall, analysts have a Moderate Buy consensus rating on ULTA stock based on 13 Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average ULTA price target of $563.27 per share implies 12.9% upside potential.
