Ulta Beauty Experiences Stock Decline Despite Positive Q4 Earnings
Located in Bolingbrook, Illinois, Ulta Beauty, Inc. (ULTA) stands as the largest beauty retailer in the U.S. It offers a comprehensive range of products, including cosmetics, skincare, haircare, and fragrance items. With a market capitalization of $16.3 billion, Ulta operates over 1,300 stores nationwide, uniquely blending retail with salon services to enhance the customer beauty experience.
Being categorized as a “large-cap stock,” Ulta’s valuation underscores its significant role in the beauty sector. This designation reflects the company’s extensive product offering and innovative strategies to engage customers.
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Despite these strengths, Ulta’s stock has decreased by 30.9% from its 52-week peak of $529.67, reached on April 1, 2024. In the past three months, ULTA stock declined 15.9%, underperforming the SPDR S&P Retail ETF (XRT), which saw an 11.8% drop in the same period.
When looking back over longer periods, Ulta Beauty’s stock performance appears concerning. The stock has fallen over 9% in the past six months and 29.6% in the last year, lagging behind XRT’s declines of 7.7% and 7.8%, respectively, during those time frames.
Confirming this bearish trend, Ulta has mostly traded below its 200-day moving average and has consistently been under its 50-day moving average since early February.
Interestingly, ULTA stock saw a 13.7% surge in trading after the release of its Q4 results on March 13. Although quarterly sales fell 1.9% year-over-year to $3.5 billion—partly due to an extra week in fiscal 2023 that contributed $181.9 million to revenues—the company reported solid improvements in comparable sales alongside new store contributions that exceeded analyst expectations.
Additionally, Ulta experienced a slight decline in the cost of sales, which allowed for better margins. Its earnings per share (EPS) for the quarter increased 4.7% year-over-year to $8.46, surpassing consensus estimates by an impressive 19.2%.
While Ulta has slightly outperformed Bath & Body Works, Inc. (BBWI), which has seen a 30.7% decline over the past year, it has fallen short compared to BBWI’s gains of 7.8% in the last six months.
According to 28 analysts monitoring ULTA stock, the consensus rating remains a “Moderate Buy.” The average price target is set at $418, indicating a potential upside of 14.2% from current levels.
On the date of publication, Aditya Sarawgi did not hold positions in any securities mentioned. All data and information is solely for informational purposes. Please refer to the Barchart Disclosure Policy here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
