In this articleULTAFollow your favorite stocksCREATE FREE ACCOUNTPeople walk past an Ulta Beauty store in the Manhattan borough of New York City on March 8, 2022.Carlo Allegri | ReutersUlta Beauty on Thursday raised its full-year forecast, after reporting growth in all major categories and topping Wall Street’s quarterly sales expectations.The beauty retailer said it expects net sales of between $12 billion and $12.1 billion, up from its previous range of $11.5 billion and $11.7 billion, representing an increase from last fiscal year’s net sales of $11.3 billion. It expects earnings per share of $23.85 to $24.30, up from its previous range of $22.65 to $23.20.It expects comparable sales, a metric that takes out one-time factors like store openings and closures, to grow between 2.5% to 3.5%, up from projections of as much as 1.5%. The company had raised its annual profit forecast and the upper end of its full year sales range in May.In the company’s news release, CEO Kecia Steelman said its outlook for the year “reflects both the strength of our year-to-date performance and our caution around how consumer demand may evolve in the second half of the year.”Shares of Ulta gained about 3% in extended trading, after earlier hitting a 52-week during the regular session.Here’s what the company reported for the fiscal second quarter compared with what Wall Street expected, according to LSEG:Earnings per share: $5.78. It was not immediately clear if that was comparable to the $5.08 expected by analysts.Revenue: $2.79 billion vs. $2.67 billion expectedIn the three-month period that ended August 2, Ulta’s net income rose to $260.88 million, or $5.78 per share, from $252.6 million, or $5.30 per share, in the year-ago period. Revenue increased from $2.55 billion in the year-ago quarter.Beauty has remained a hot category for consumers, even as they pull back or watch their spending in other discretionary categories. Yet that’s fueled tougher competition for Ulta Beauty as specialty players like LVMH-owned Sephora, big-box retailers like Walmart and department stores like Kohl’s have all bulked up their beauty businesses.For investors, tariffs have been a closely watched challenge for retailers, too. Compared to other retailers, Ulta is not as directly exposed. Only about 1% of the company’s merchandise last fiscal year was direct imports, then-CFO Paula Oyibo said in May on the company’s earnings call. She said at the time most of Ulta’s exposure to the higher duties was minor, such as store fixtures and supplies.Even in tumultous economic times, Steelman said beauty and wellness tend to fare better because they “offer a unique sense of comfort and escape.””Our insight suggests consumers continue to prudently manage their day-to-day spending and are watchful of pricing trends in response to tariffs,” she said on the earnings call. “At the same time, beauty enthusiasts tell us that they’re prioritizing their beauty regimens and remain strongly engaged within the category.”In the second quarter, Ulta’s comparable sales grew 6.7% year over year, more than double analysts’ expectations, according to StreetAccount.Customers visited more and spent more when they shopped on Ulta’s website and in its stores compared to the year-ago quarter. Transactions rose by 3.7% and average ticket increased by 2.9%.Ulta added new brands and products that drove purchases in the quarter, including more products from Sol de Janeiro, exclusive Korean beauty brand Peach & Lily and Shakira’s hair care brand, Isima, Steelman said on the company’s earnings call.Plus, she said, it’s …
