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Bolingbrook, Illinois-based Ulta Beauty, Inc. (ULTA) is the largest beauty retailer in the U.S., offering a wide range of cosmetics, skincare, haircare, and fragrance products. With a market cap of $16.3 billion, Ulta operates more than 1,300 stores nationwide, combining retail with salon services to create a unique beauty experience.
Companies worth $10 billion or more are categorized as "large-cap stocks," and Ulta fits this description perfectly. Its valuation reflects its strong presence in the beauty industry, driven by an extensive product portfolio and innovative customer engagement strategies.
Despite its notable strengths, ULTA stock has tanked 30.9% from its 52-week high of $529.67 touched on Apr. 1, 2024. Meanwhile, ULTA stock dropped 15.9% over the past three months, underperforming the SPDR S&P Retail ETF’s (XRT) 11.8% decline during the same time frame.
Ulta Beauty’s performance looks even more concerning over the longer time frame. ULTA stock has plummeted more than 9% over the past six months and 29.6% over the past 52 weeks, underperforming XRT’s 7.7% decline over the past six months and 7.8% dip over the past year.
To confirm the bearish trend, Ulta traded mostly below its 200-day moving average over the past year with some fluctuations and consistently below its 50-day moving average since early February.
Despite its lackluster performance over the past years, Ulta Beauty’s stock surged 13.7% in the trading session after the release of its better-than-expected Q4 results on Mar. 13. Although the company’s quarterly sales declined 1.9% year-over-year to $3.5 billion, it was primarily due to the presence of an extra week in fiscal 2023. The extra week in 2023 contributed $181.9 million to Q4 2023 revenues. Meanwhile, the company observed a solid improvement in comps and contribution from new store openings, which led to its topline beating the Street’s expectations.
Furthermore, the company experienced a slight drop in the cost of sales, leading to a notable improvement in margins. Its EPS for the quarter increased 4.7% year-over-year to $8.46, which surpassed the consensus estimates by a staggering 19.2%.
While, Ulta has slightly outpaced its peer Bath & Body Works, Inc.’s (BBWI) 30.7% decline over the past 52 weeks, it has notably lagged behind BBWI’s 7.8% gains over the past six months.
Among the 28 analysts covering the ULTA stock, the consensus rating is a “Moderate Buy.” Its mean price target of $418 suggests a 14.2% upside potential from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
