Ulta Beauty (ULTA) Stock Forecast & Price Target

Ulta Beauty's strong financial prospects are underscored by its revised fiscal year 2025 sales expectations of $12.0B-$12.1B, reflecting a significant increase from prior projections, alongside same-store sales growth guidance being raised to between 2.5%-3.5%. The company has demonstrated a robust innovation pipeline by introducing 43 new brands or exclusives in the first half of 2025, compared to 29 in the prior year, contributing to revenue and margin outperformance. Furthermore, Ulta's competitive advantages, including a diverse product offering, a strong loyalty program, and growth in international markets, position the company well for continued market share gains in the evolving beauty sector.

Ulta Beauty is forecasting a significant contraction in its operating margin, expected to decrease by 250 basis points to 10.1%, which is slightly below the consensus estimate of 10.0%. Additionally, the company anticipates a year-over-year gross margin contraction of 60 basis points, indicating potential challenges to profitability in the face of broader retail pressures such as inflation and shifts in consumer spending. Furthermore, with operating expenses projected to deleverage by 190 basis points to 29.0%, versus the consensus of 29.2%, Ulta Beauty may face heightened financial strain impacting its overall financial performance.