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Ulta Beauty is Strengthening its Leadership Position

Stock MarketsAug 27, 2021 02:00PM ET
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© Reuters. Ulta Beauty is Strengthening its Leadership Position

Ulta Beauty, Inc. (NASDAQ:ULTA) reported strong Q2 results on Wednesday, strengthening its leadership position in the beauty category market. I am bullish on the stock.

"This performance reflects the recovery of the beauty category, investments and choices we've made over the last year to adapt to the market disruption and strengthen our leadership position, and the ongoing efforts of our associates to deliver great experiences for our guests," said Dave Kimbell, chief executive officer. "Our value proposition is strong, and we are evolving and innovating to lead in the new beauty landscape, capture additional market share, and drive profitable growth."

Net sales came in at $2 billion, up from $1.2 billion from a year ago. Comparable sales rose 56.3%, while net income was $250.9 million, or $4.56 per diluted share.

All numbers beat analysts' estimates, and the company raised its outlook for the year. (See ULTA stock charts on TipRanks)

The solid Q2 sales come on the heels of strong Q1 sales, when comparable sales increased 65.9%, while net income came in at $230.3 million, or $4.10 per share.

In that March, long-time and well-respected Ulta CEO Mary Dillon announced that she would be stepping down from her role in June.

Apparently, the new leadership has been able to keep things running smoothly, helped by the re-opening of the economy and the pent-up demand for Ulta's products.

Wall Street was pleased with Ulta's Q2 results, sending its shares sharply higher in after-hours trade on Wednesday afternoon. Ulta shares have soared 36% year-to-date, beating the S&P 500, which has gained 21%.

Wall Street's Take

The 21 analysts following the stock are moderately optimistic for Ulta's shares over the next 12 months. The stock has a Moderate Buy rating, based on 13 Buys and eight Holds.

Ulta's average price target of $440.80 implies 14.9% upside, with a high forecast of $490 and a low forecast of $345.

TipRanks assigns a Perfect 10 Smart Score to the stock, citing a bullish sentiment among investors, bloggers, and analysts, along with strong technicals.

The stock is an excellent short-term trade, on the long side of the market.

Disclosure: At the time of publication, Panos Mourdoukoutas did not have a position in any of the securities mentioned in this article.​

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Ulta Beauty is Strengthening its Leadership Position

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