Ulta’s first quarter saw a positive market reaction, reflecting the company’s ability to outperform Wall Street’s revenue and profit expectations despite ongoing macroeconomic uncertainty. Management credited the quarter’s gains to improved in-store execution, a robust lineup of new and exclusive brand launches, and a refreshed marketing strategy. CEO Kecia Steelman emphasized that these efforts led to higher member growth, stronger in-store conversion rates, and increased guest engagement. The focus on operational improvements and targeted promotions allowed Ulta to gain market share while navigating heightened consumer caution and competitive pressures.
Is now the time to buy ULTA? Find out in our full research report (it’s free).
Ulta (ULTA) Q1 CY2025 Highlights:
- Revenue: $2.85 billion vs analyst estimates of $2.80 billion (4.5% year-on-year growth, 1.9% beat)
- EPS (GAAP): $6.70 vs analyst estimates of $5.80 (15.5% beat)
- Adjusted EBITDA: $473.8 million vs analyst estimates of $422.5 million (16.6% margin, 12.1% beat)
- The company slightly lifted its revenue guidance for the full year to $11.6 billion at the midpoint from $11.55 billion
- EPS (GAAP) guidance for the full year is $22.92 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 14.1%, in line with the same quarter last year
- Locations: 1,451 at quarter end, up from 1,395 in the same quarter last year
- Same-Store Sales rose 2.9% year on year (1.6% in the same quarter last year)
- Market Capitalization: $21.39 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Ulta’s Q1 Earnings Call
- Rupesh Parikh (Oppenheimer): Asked about surprises in the Ulta Unleashed plan’s early traction. CEO Kecia Steelman credited improved store execution, in-stock levels, and marketing clarity as unexpectedly strong contributors.
- Olivia Tong (Raymond James): Questioned the rationale for cautious full-year guidance despite a strong quarter. CFO Paula Oyibo explained the outlook reflects macro uncertainty and a more cautious view of second-half trends, with no major changes expected in promotional intensity.
- Susan Anderson (Canaccord Genuity): Inquired about the newness and innovation pipeline. Steelman emphasized a balanced approach to product launches across categories with a blend of exclusivity to sustain momentum.
- Korinne Wolfmeyer (Piper Sandler): Sought clarity on the source of improved demand and market share gains. Steelman attributed growth to both fading competitive headwinds and operational improvements, particularly in in-stock inventory and marketing.
- Mark Altschwager (R.W. Baird): Asked what drove the acceleration in e-commerce and if digital investments were the primary factor. Steelman highlighted new app features and real-time offer adjustments, while Oyibo said improved fulfillment options have helped balance margin impact.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) the rollout and performance of additional exclusive brands and new product launches, (2) the effectiveness of Ulta’s digital and loyalty program enhancements in driving guest engagement and e-commerce growth, and (3) management’s ability to mitigate cost pressures from supply chain investments and tariffs. Progress on international expansion and the online marketplace initiative will also be important markers of strategic execution.
Ulta currently trades at $475.25, up from $422.03 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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