Ulta Beauty Inc. is an American chain of beauty stores in the United States, currently headquartered in Bolingbrook, Illinois. It's claim to fame is being one of the largest and most recognizable U.S. retailers for cosmetics, fragrances, skin care products, hair care products, and salon services.
With that out of the way, let's see what the numbers are telling us...
Consensus EPS Estimate is $2.80 (+13.8% YoY)
Consensus Revenue Estimate is $1.68B (+12.8% YoY)
Last four EPS have all been beats with an avg +2.7% surprise.
Three of the last four Revenues have been misses for an avg -0.04% surprise on miss, and single +0.75% surprise on beat.
EPS revisions for the past 90 days include 2 upgrades and 20 downgrades.
Revenue revisions for the past 90 days include 6 upgrades and 10 downgrades.
Technicals are a toss-up, with a current lean toward sell.
This presents a fairly mixed bag of indicators on the surface, and with it being an already uncertain market with China tariffs and scorched earth tweets ever looming, it's not unwise to be fearful here. It wouldn't be too much of a stretch to assume that earnings would need to not only beat, but also surprise by a substantial margin in order for us to see any sort of significant rally.
The other angle to consider here is Amazon's announcement of an online "beauty store for professionals" in June of this year, for which Ulta saw an immediate 2.6% drop in SP the day of its unveiling. It's fair to say however that this does not put Amazon in direct competition with Ulta, as Ultra thrives on brand loyalty and caters to a holistically different demographic than Amazon. One might attribute this to Ulta's focus on the in-store experience, which likely keeps loyal customers coming back for more in lieu of the more detached online shopping approach.
That all said, there's not a lot to be excited about here from a long standpoint, and if we look at how price has responded to the last 6 earnings you'll find price effects ranging from -13.1% to 8.3%. Anything's possible however, and a disproportionately large surprise to the positive could of course see longs rewarded. The downside potential is however difficult to ignore.
As always, please do your own research, and take care to use every tool in your arsenal to fend against unforeseen circumstances (stop-losses, hedges, option spreads, etc.)
Happy Trading!
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