Ulta Beauty Inc. (NASDAQ:ULTA) shares fell Friday as investors digested the retailer’s latest quarterly results and outlook.
Analysts also adjusted their outlooks following the results. Wells Fargo analyst Ike Boruchow maintained an Underweight rating on Ulta Beauty while lowering his price forecast to $475 from $500. Meanwhile, TD Cowen analyst Oliver Chen reiterated a Buy rating but trimmed his price forecast to $750 from $775.
Fourth Quarter Results
Ulta reported fourth-quarter EPS of $8.01, topping the Street estimate of $7.97. Revenue came in at $3.898 billion, beating the $3.802 billion consensus estimate and rising 11.75% from $3.488 billion a year earlier.
Comparable sales increased 5.8%, driven by a 4.2% rise in average ticket and a 1.6% increase in transactions.
Gross profit rose 11.2% to $1.5 billion, while gross margin edged slightly lower to 38.1% from 38.2%.
This was primarily due to unfavorable channel mix, deleverage of store fixed expenses, and deleverage of other revenue, mostly offset by lower inventory shrink and supply chain efficiencies.
SG&A expenses increased 23% to $1.0 billion, driven by higher corporate overhead, advertising spending, and incentive compensation.
Operating income was $476.9 million, or 12.2% of net sales, compared with $516.3 million, or 14.8%, a year earlier.
Full-Year Results
For fiscal 2025, net sales rose 9.7% to $12.4 billion, while comparable sales increased 5.4%, driven by a 3.3% increase in average ticket and a 2.0% rise in transactions.
Gross profit increased 10.4% to $4.8 billion, with gross margin improving to 39.1% from 38.8%. SG&A expenses rose 17.4% to $3.3 billion.
Operating income totaled $1.5 billion, or 12.4% of net sales, while diluted EPS increased 1.2% to $25.64.
Looking ahead, Ulta …