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Valued at a market cap of $24 billion, Ulta Beauty, Inc. (ULTA) is a specialty beauty retailer based in Bolingbrook, Illinois. It offers branded and private label beauty products, including cosmetics, fragrances, hair care, skincare, bath and body products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, website, and mobile applications.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and ULTA fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the specialty retail industry. The company leverages data-driven loyalty programs and personalization to deepen customer engagement, strengthen margins, and maintain its leadership in the U.S. specialty beauty retail market.
Despite its notable strength, this specialty beauty retailer slipped marginally from its 52-week high of $539, achieved on Sep. 3. Shares of ULTA have gained 13% over the past three months, underperforming the Nasdaq Composite’s ($NASX) 15% return during the same time frame.
Nonetheless, in the longer term, ULTA has rallied 32.8% over the past 52 weeks, outpacing NASX's 27.9% uptick over the same time period. Moreover, on a YTD basis, shares of ULTA are up 23%, compared to NASX’s 16.4% rise.
To confirm its bullish trend, ULTA has been trading above its 50-day and 200-day moving averages since late April, with slight fluctuations.
On Aug. 28, ULTA delivered its Q2 results. Both its revenue of $2.8 billion and earnings of $5.78 per share handily topped the consensus estimates. Moreover, compared to the year-ago quarter, its top line improved 9.3% primarily due to increased comparable sales, the acquisition of Space NK, and new store contribution, while its EPS grew 9.1%. Additionally, noting its strong Q2 performance, ULTA raised its fiscal 2025 guidance, now expecting revenue to be between $12 billion and $12.1 billion, and EPS in the range of $23.85 to $24.30. However, despite reporting an upbeat performance, its shares plunged 7.1% in the following trading session primarily due to broader market headwinds.
ULTA has significantly outperformed its rival, Bath & Body Works, Inc. (BBWI), which declined 11.5% over the past 52 weeks and 32.2% on a YTD basis.
Despite ULTA’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 27 analysts covering it, and the mean price target of $579.57 suggests an 8.4% premium to its current price levels.
