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Ulta Beauty (NASDAQ:ULTA) just wrapped its first quarter with a better-than-expected finish, pushing past Wall Street's forecasts with $2.85 billion in revenue and earnings of $6.70 per share. The earning results drove the share price up 11.2% at 12.35pm today. The beauty retailer saw modest gains in foot traffic and average ticket size, but what really stood out was management's tonemeasured optimism, with a side of realism. CEO Kecia Steelman said their new "Ulta Beauty Unleashed" strategy is gaining traction, but also flagged a fluid environment that could reshape consumer demand as the year plays out.
The company dialed up its full-year guidance slightly, now projecting up to 1.5% comp sales growth (up from 1%) and bumping its EPS range to $22.65$23.20. Still, some signals warrant a second look: gross margin dipped slightly to 39.1%, SG&A climbed to nearly 25% of sales, and inventories jumped 11%likely tied to new brand launches and store expansion. Ulta also maintained its full-year operating margin forecast at 11.7%11.8%, suggesting no major shifts in underlying cost dynamics.
One thing that hasn't slowed down? Buybacks. Ulta scooped up nearly $359 million of its own shares this quarter, with another $2.3 billion left to deploy. The store count rose to 1,451 locations, and plans for 60 net new stores are holding steady. For now, the business looks steadybut how consumer spending evolves heading into the second half could be what defines the stock's next move.
This article first appeared on GuruFocus.