Ulta Soars as Demand Stays Strong

The beauty industry is staying resilient

BREAKING NEWS

After a full year of giving up ground to the likes of e.l.f., Ulta Beauty erased all of their 2023 declines with a radiant earnings report. Let's unpack the details: 

WHAT HAPPENED

Ulta shimmered on both sides of the balance sheet by generating a $5.07 adjusted EPS from $2.49 billion in revenue. More importantly, Ulta reiterated strong holiday demand by raising the lower end of their full-year guidance. Ulta now predicts they'll hit $11.1 billion in full-year revenue and achieve slightly higher profits. After weeks of weaker guidance in the retail space, the market is absolutely leaping at a merchant stock that's projecting confidence of any kind. 

SHRINK-FREE

In another point that goes against the rest of the industry, Ulta also is confident that their efforts to combat shrink at their stores have been working. People are buying more during the holiday season and Ulta is losing fewer and fewer margins to theft. This is another massive sign for the market, so investors are feasting on Ulta stock this morning. 

WHY IT MATTERS

We're still stuck in a moment where investors are deeply worried that consumer spending might slow down enough to crush this recovery. While we have a lot of data suggesting that folks are managing to spend their way through this holiday season, there isn't enough data to really confirm industry-wide levels of spend. So, when a stock like Ulta comes along and confirms that their industry is chock-full of resilient demand, investors are going to crowd into that stock. Good news is great news at this moment, and so Ulta stock erupted nearly 12% when the market opened,