Ulta's Q2 Results Beat Expectations Despite Conservative Comp Sales Guidance

Ulta's Q2 results exceeded expectations with higher profits and sales, and a 90-basis-point expansion in gross profit margin despite higher costs. However, investors were spooked by conservative comp sales guidance. Analysts remain positive about the company despite the guidance.

Ulta Beauty Inc. (ULTA) reported robust Q2 results, with earnings per share (EPS) of $5.78, surpassing analyst expectations by $0.74, and revenue of $2.79 billion, exceeding forecasts by $130 million [2]. The company also raised its full-year forecast, expecting net sales of between $12.0 billion and $12.1 billion, up from its previous range of $11.5 billion to $11.7 billion [1]. This represents an increase from last fiscal year's net sales of $11.3 billion. The company expects EPS of $23.85 to $24.30, up from its previous range of $22.65 to $23.20.

Comparable sales, a metric that excludes one-time factors like store openings and closures, are expected to grow between 2.5% to 3.5%, up from projections of as much as 1.5% [1]. This growth was driven by strong consumer demand and the addition of new brands and products, such as Sol de Janeiro, Peach & Lily, and Shakira's hair care brand, Isima [1].

However, investors were cautious about the company's conservative comparable sales guidance. CEO Kecia Steelman attributed this to uncertainty around consumer demand in the second half of the year [1]. Despite this, analysts remain optimistic about the company's prospects. GuruFocus projects a GF Value of $564.12 for Ulta Beauty Inc. (ULTA) one year from now, suggesting an upside potential of 6.31% from the current price of $530.63 [2]. The consensus recommendation from 27 brokerage firms is "Outperform" [3].

Ulta Beauty's resilience to tariffs is also a positive factor highlighted by analysts. Only about 1% of the company's merchandise receipts were direct imports, and the company feels confident it can mitigate any cost increases [3]. Additionally, the company is expanding internationally with the acquisition of Space NK, a British beauty retailer, and plans to open stores in Mexico and the Middle East [1].

References:
[1] https://www.cnbc.com/2025/08/28/ulta-beauty-ulta-earnings-q2-2025.html
[2] https://www.gurufocus.com/news/3086272/ulta-beauty-ulta-surpasses-q2-expectations-and-raises-2025-outlook
[3] https://www.ainvest.com/news/ulta-beauty-set-exceed-earnings-expectations-favorable-analyst-outlook-2508/