Ulta Beauty Inc (NASDAQ:ULTA) shares surged more than 14% on Friday to trade at about $610 after the beauty retailer reported fiscal third quarter results that exceeded Wall Street expectations and raised its full-year guidance.
Earnings per share came in at $5.14, surpassing analyst estimates of $4.55 and matching the prior-year figure.
Net sales rose 12.9% year-over-year to $2.86 billion, above forecasts of $2.725 billion.
Comparable sales, which include stores open at least 14 months and eCommerce, grew 6.3%, driven by a 3.8% increase in average ticket size and a 2.4% increase in transactions.
Gross profit increased 14.9% to $1.16 billion, or 40.4% of sales, up from 39.7% in the prior year.
Operating income totaled $309.4 million, or 10.8% of sales, down from 12.6% in the same period last year. Net income was $230.9 million, compared with $242.2 million a year ago.
The company raised its fiscal 2025 outlook, now projecting net sales of approximately $12.3 billion, up from the previous range of $12 billion to $12.1 billion.
Comparable sales growth is expected to be 4% to 4.5%, up from 2% to 3%.
EPS is now projected at $25.20 to $25.50, up from $23.85 to $24.30.
Ulta plans to open around 63 new stores and complete 43 to 48 remodel or relocation projects during the fiscal year.
The company attributed its quarterly growth to increased comparable sales, the acquisition of Space NK, and contributions from net new stores.
Jefferies analysts raised their price target on Ulta Beauty to $600 from $565 following the Q3 results.
“Q3 beat expectations, supported by strong beauty demand, and merchandise margin up on pricing/promo discipline,” the analysts wrote.
They noted that macro caution limited the full-year guide raise, but the outlook remains well above Street estimates, with fiscal 2025 comparable sales now expected at 4.4% to 4.7% versus consensus of 3.8%.
EPS and operating margin guidance were also raised above consensus, with management guiding operating margin above its long-term 12% target and signaling that fiscal 2026 will not be an investment year or see margins drop below fiscal 2025 levels.
The analysts highlighted that category engagement remains high, with fragrance leading growth and solid performance across skincare, wellness, hair, and makeup.
They also pointed to temporary merchandise margin benefits from market-wide price increases and disciplined promotional activity. “This addresses concerns about a post-12% pullback; bulls see it as validating potential for 13% in fiscal year 2026,” the analysts wrote.