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Research Alert: Ulta: Q1 Comps Accelerate And Margins Expand; Guidance Raised

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

ULTA's Q1 results beat expectations with revenue of $3.16B (+11.1% Y/Y) and EPS of $7.74 (+15.5%), driven by comp acceleration to +5.3% vs +2.9% prior and gross margin expansion of 100bp to 40.1%. The comp growth was balanced between +3.7% average ticket and +1.6% transaction growth, supporting the turnaround thesis alongside operational improvements including lower shrink and better merchandise margins. Management raised operating income guidance to 6.5% from 6% and EPS guidance to $28.36-$28.80 from $28.05-$28.55, while maintaining unchanged top-line expectations. This implies margin gains are proving durable with a clear path to earnings growth without accelerating revenue assumptions. FY comp guidance of +2.5% to +3.5% appears conservative relative to Q1's +5.3% print, leaving upside potential if trends persist. The combination of operational momentum, shrink improvement as a tailwind, and capital returns including $555M in Q1 repurchases supports the case for multiple stability or expansion.

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