Key Takeaways
- Ulta Beauty exceeded earnings and revenue estimates as consumers look to beauty products as a “comfort and escape.”
- Comparable store sales growth of 2.9% was much higher than expected.
- Ulta Beauty also raised its full-year guidance.
Ulta Beauty (ULTA) shares soared nearly 15% Friday, a day after the beauty products retailer reported better-than-expected results and raised its guidance as consumers continued to spend on personal care merchandise.
The company posted first-quarter earnings per share (EPS) of $6.70 on net sales that increased 4.5% year-over-year to $2.85 billion. Both exceeded Visible Alpha forecasts. Comparable store sales were up 2.9%, well above the 0.37% consensus estimate.
According to a transcript of the earnings call provided by AlphaSense, CEO Kecia Steelman noted that the performance was driven by sales of fragrance products, which were higher by a double-digit percentage, along with new and exclusive brands. Steelman explained that many consumers said that they were “leaning into beauty as a comfort and escape from the stress of macro uncertainty.”
Steelman called the operating environment “fluid,” and said that Ulta Beauty’s “outlook reflects uncertainty around how consumer demand could evolve.” Still, the company boosted its full-year EPS guidance to $22.65 to $23.20, up from the previous $22.50 to $22.90. It also increased the top end of its sales guidance to $11.7 billion from $11.6 billion.
The news sent shares of Ulta Beauty up more than 14% soon after the opening bell Friday and into positive territory for the year.
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