What Happened?
Shares of beauty, cosmetics, and personal care retailer Ulta Beauty (NASDAQ:ULTA) jumped 11.8% in the morning session after the company reported an impressive "beat and raise" quarter. Ulta blew past analysts' sales, EPS and EBITDA expectations during the quarter (Q1 2025).
Sales grew 4.5%, helped by stronger store traffic and rising average ticket size, with comparable sales climbing nearly 3 percent, twice the pace from the same period last year.
Looking ahead, it lifted its full-year revenue guidance, which was impressive, especially given how many retailers are reducing guidance or withdrawing it altogether. Overall, we think this was a solid quarter with some key metrics above expectations.
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What The Market Is Telling Us
Ulta’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for Ulta and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 15.1% on the news that Warren Buffett's Berkshire Hathaway revealed a stake of 690K shares of Ulta valued at ~$266 million in its Q2 2024 13-F filing.
Given the legendary investor's reputation for identifying quality opportunities in the stock market, the market likely read the information positively for the company's near term prospects.
The sentiment was also supported by Walmart's strong earnings outperformance and sales outlook for the rest of the year, which indicated a healthy spending pattern for the U.S. consumer.
Ulta is up 9.1% since the beginning of the year, and at $468.28 per share, has set a new 52-week high. Investors who bought $1,000 worth of Ulta’s shares 5 years ago would now be looking at an investment worth $1,959.
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