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Ulta Beauty's Quarterly Results Show Improving Comparable Sales Growth Trend, Oppenheimer Says

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Ulta Beauty's Quarterly Results Show Improving Comparable Sales Growth Trend, Oppenheimer Says

Ulta Beauty's (ULTA) two-year comparable sales growth trend accelerated in the fiscal second quarter, suggesting the company is better positioned to navigate upcoming difficult comparisons, Oppenheimer said in a note emailed Friday.

The beauty retailer delivered better-than-expected second-quarter results on Thursday. Comparable sales increased 3.8% in the fiscal second quarter, versus 6.7% growth a year earlier. The Street expected same-store sales growth of 2.3%.

Two-year comparable sales growth trend accelerated to 10.5% from 8.2% in the first quarter, according to Oppenheimer. The improvement increases "our confidence in management's ability to lap upcoming difficult compares," analyst Rupesh Parikh wrote.

Ulta raised its fiscal 2026 comparable sales growth outlook to 3.2% to 3.7% from its prior guidance of 2.5% to 3.5%. Analysts polled by FactSet expect 3.6%.

Ulta shares were down 3.7% in Friday morning trade. The stock has fallen 14% so far this year.

Earlier this week, Bath & Body Works (BBWI) said its net sales fell 2.3% year over year in the fiscal second quarter to $1.51 billion. Rival Sally Beauty Holdings (SBH) said earlier this month that its consolidated comparable sales were flat in the fiscal third quarter, while comparable sales at its Sally Beauty segment increased 1.6%.

Ulta raised its full-year per-share earnings outlook to $28.70 to $29.00 for the current fiscal year from the prior view of $28.36 to $28.80. Oppenheimer said it had expected the company to reiterate its prior guidance, citing management's conservative nature.

Oppenheimer maintained an outperform rating on Ulta, with a $650 price target.

"We continue to look favorably on Ulta's long-term prospects," Parikh said, citing multiple reasons, including the company's "differentiated offering and unique value proposition."

Oppenheimer is now looking for EPS of $28.70 for fiscal 2026 and $31.85 for fiscal 2027 for Ulta, up from its prior estimates of $28.55 and $31.70, respectively.

Price: $520.99, Change: $-19.11, Percent Change: -3.54%

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