Utla’s Earnings Slap Downtrend In The Face, Proving Once Again You Can’t Bet Against Vanity…

Here’s a universal truth: People will cut back on groceries, vacations, and probably kidney dialysis before they let anyone see them with under eye bags. And Ulta Beauty just proved that… again… by torching Wall Street’s lowball estimates and flipping the bird at “consumer caution” for the millionth quarter in a row.

(Source: Giphy) 

In short, Ulta’s Q1 net sales hit $2.85 billion, blowing past the $2.79 billion consensus. Meanwhile, EPS came in at $6.70, a full buck above what the analyst spreadsheet jockeys predicted. And if you want the real money shot, comparable store sales jumped 2.9% (expectations were barely above zero, which is about where retail analyst optimism lives these days). 

What’s more is that CEO Kecia Steelman went full Tony Robbins in the earnings call: “Consumers are leaning into beauty as a comfort and escape.” Translation: people are mainlining skincare and perfume as a coping mechanism for a world where the only thing rising faster than CPI is collective existential dread. For instance, Ulta expanded its loyalty club to a face-melting 45 million members, up 3% from last year… once again, reminding skeptics that lipstick is a more reliable safe haven than gold, Bitcoin, or whatever sh*tcoin your degenerate friend is shilling on Telegram. 

(Source: Investopedia) 

How? Because not only are the Hailey Bieber wannabes showing up, but they’re actually spending. The fragrance aisle, in particular, went ballistic with double-digit growth. Look good, smell good, amirite? Oh, and for the “but what about the future?” crowd: Ulta cranked up its full-year revenue forecast to a range of $11.5–$11.7 billion, and jacked up EPS guidance too. The stock responded as you’d expect: a nearly 12% vertical leap that left the rest of retail looking like they got hit by a bus. 

But, but, but… on the other hand, here’s some reality for the Ulta Kool-Aid drinkers: Ulta’s not completely drunk on its own supply. Their guidance for the back half of the year comes with a footnote the size of the Sephora returns desk. Translation: Don’t get too horned up, because comp sales growth is expected to slow, and operating margins are probably going to take a punch. For example, according to the earnings call, operating profit is projected to get bent over deleverage in the low double-digit range.  

(Source: Giphy) 

However, compared to Target and Walmart, Ulta looks like the only honest retailer in town. Target missed revenue estimates, Walmart cried about tariffs, and both quietly slashed sales forecasts… but Ulta, is legit backing up the brinks truck. Especially when you consider the fact that Steelman claims Ulta customers aren’t split by income… Everyone, rich or not, wants to look hot while the economy circles the drain. And honestly, the data backs it up. Ulta’s average spend per customer hasn’t cratered, which is more than fast food or toy retailers can say after Q1’s bloodbath.

In the end, when the world feels like an action movie full of explosions designed by Michael Bay, people still want to look good for when the sh*t hits the fan. Ulta’s selling the escape hatch, and there’s no shortage of buyers. Of course, only time will tell how that narrative will keep up… but it’s clear, you can’t bet against lipstick and retail therapy. Meaning, do what you will with this information and place your bets accordingly. Until next time, friends… 

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Stocks.News does not hold positions in companies mentioned in the article.