What Happened?
Shares of beauty, cosmetics, and personal care retailer Ulta Beauty (NASDAQ:ULTA) jumped 5.2% in the afternoon session after the company's CEO and CFO presented at the Raymond James Consumer and TMT Conference, expressing confidence in the beauty category and Ulta's place within it. Shorter term, the holiday period will ultimately determine how the company performs this quarter, but management sounds confident coming out of Black Friday and Cyber Monday. They also spoke about how well new stores are performing, how loyal customers are, and how both established brands/products as well as new ones are driving traffic and sales.
After the initial pop the shares cooled down to $430.65, up 4.6% from previous close.
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What The Market Is Telling Us
Ulta’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 12.6% on the news that the company reported strong third-quarter earnings. Ulta blew past analysts' EBITDA and EPS estimates while revenue was slightly ahead. It is also encouraging that management slightly lifted sales guidance for the full year on the back of the solid results posted in the quarter, suggesting the momentum is expected to continue amid improved shopping trends observed by some of the retailers that have reported this earnings season. Similarly, full-year EPS guidance beat Wall Street's expectations, indicating a healthy balance of growth and profitability. Overall, we think this was a decent quarter, with some key metrics above expectations.
Ulta is down 11.5% since the beginning of the year, and at $430.65 per share, it is trading 24.1% below its 52-week high of $567.18 from March 2024. Investors who bought $1,000 worth of Ulta’s shares 5 years ago would now be looking at an investment worth $1,711.
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