Ulta Beauty Stock Eyeing Breakout, With Earnings on Deck

Ulta Beauty's stock (NASDAQ: ULTA) is currently trading at $544.52, 4.43% higher over the past week, as bullish momentum builds. Markets will be keenly watching the stock as it prepares to release its earnings after market close, positioned near resistance, and looking to break out.

Analysts are projecting an EPS of $4.60 per share, a 10% decrease from the $5.14 reported in the same quarter last year. Revenue is expected to reach $2.7 billion, representing a 6.86% year-over-year growth rate.

The beauty retailer's stock performance has been robust, trading above both its 50-day ($529.90) and 200-day ($457.87) simple moving averages, signaling a bullish trend. Options trading suggests an anticipated stock price movement of approximately 5.9% following the earnings announcement, reflecting market expectations for volatility.

Ulta's recent performance and strategic initiatives have set the stage for this pivotal earnings release. In the second quarter of fiscal 2025, the company reported a 9.3% increase in net sales, reaching $2.8 billion, and a 6.7% growth in comparable sales. Net income rose to $260.9 million, or $5.78 per diluted share, a 9.1% year-over-year increase. Consequently, Ulta raised its fiscal 2025 outlook, projecting net sales between $12.0 billion and $12.1 billion, with comparable sales growth of 2.5% to 3.5%.

Several analyst ratings have also influenced investor sentiment. The average price target for the stock is $577.83, with the lowest target being $405.00 and the highest $680.00. Morgan Stanley upgraded its price target for Ulta Beauty to $550 from $460, maintaining an “Overweight” rating, citing the company's strong first-quarter performance driven by its “Unleashed” strategy.

Jefferies increased its price target to $550 from $425, noting new brand launches and improving sales trends since April, anticipating Ulta's results to surpass Wall Street estimates and expecting the company to raise its full-year guidance. Canaccord Genuity reiterated its “Buy” rating with a price target of $653, highlighting Ulta's successful initiatives to recapture market share in the U.S., including adding new brands, investing in store improvements, and launching a third-party marketplace.

Ulta's strategic moves, including the launch of UB Marketplace, a curated third-party platform, and its international expansion into Mexico with brick-and-mortar stores, demonstrate its commitment to growth and market expansion. UB Marketplace aims to expand product assortment and enhance customer experience by offering a unified search, cart, and checkout system, with purchases eligible for Ulta Beauty Rewards. The expansion into Mexico marks a significant milestone in Ulta's global growth strategy, with initial stores opening in Mexico City and Metepec, with plans for further expansion in key locations across the country.

Leadership changes also play a role in Ulta's trajectory. The appointment of Christopher DelOrefice as Chief Financial Officer, effective December 5, 2025, brings extensive experience from his previous roles at Becton Dickinson and Johnson & Johnson, positioning him to contribute significantly to Ulta's financial strategy.

Furthermore, Ulta's board approved a new share repurchase authorization of $3.0 billion, replacing the prior program. This move underscores the company's commitment to returning capital to shareholders while continuing strategic growth investments.

Despite the positive sentiment, the projected decrease in EPS for the upcoming quarter raises concerns about potential margin pressures or increased operating costs. Investors will be closely monitoring the company's commentary on these factors during the earnings call. The ability of Ulta to maintain its growth trajectory amidst increasing competition and evolving consumer preferences will be critical.