Ulta Beauty Sales Momentum Builds As K-Beauty Expansion And Fewer Discounts Drive Growth
Ulta Beauty Inc. (NASDAQ:ULTA) is gaining momentum ahead of its upcoming earnings report, with stronger sales trends, tighter promotions, and accelerating product innovation fueling expectations for robust growth and higher profitability in the quarters ahead.
JP Morgan analyst Christopher Horvers reaffirmed an Overweight rating on Ulta Beauty Inc., raised his price forecast from $525 to $600, and kept the stock on JPM’s Analyst Focus List, citing stronger comps, higher EPS, and valuation upside.
Horvers raised his second-quarter comparable sales forecast to 4.8%, above the Street’s 2.5% and his prior 2%. He credited better Nielsen/Circana data trends of 4%-6%, incremental cost leverage, improved promotional effectiveness, and reduced discounting on easier comparisons.
He pointed out that product innovation nearly quadrupled year over year, highlighted by eight new K-Beauty brands, while Ulta narrowed promotions to exclude fragrance and prestige categories.
He argued Ulta should deliver a more meaningful full-year raise after modestly lifting first-quarter guidance despite a 90-cent consensus beat. If Ulta meets this forecast, earnings would exceed the original full-year EPS guidance by about $1.40 across the first half. He expects management to raise 2025 guidance while leaving room for future upside.
Looking forward, Horvers projected EPS of $24.85 in 2025, $28.03 in 2026, and $31.64 in 2027, supported by 3.5% same-store sales growth.
He set a December 2026 price forecast of $600, based on 19x his 2027 EPS estimate, up from $525 previously. He said Ulta deserves a premium to the normalized 18x market multiple given 4%+ comps, share gains, and sector quality.
Horvers concluded that Ulta’s unique mass-prestige mix, loyalty program data, and market-leading assortment position the company for sustainable margin expansion, share gains, and earnings growth.
In the last month, analysts have turned broadly constructive on Ulta Beauty, with most firms lifting price forecasts despite mixed ratings. Barclays upgraded the stock from Equal-Weight to Overweight and lifted its forecast from $518 to $589. Wells Fargo maintained an Underweight rating but raised its forecast from $350 to $400.
Oppenheimer reiterated an Outperform rating and increased its forecast from $510 to $600. Canaccord Genuity kept a Buy rating and boosted its forecast from $542 to $600. DA Davidson maintained a Buy rating and raised its forecasts from $550 to $585
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