Ulta Beauty is poised to report a less optimistic full-year earnings outlook when it unveils its quarterly results this Thursday, as the dynamics within the beauty market grow increasingly challenging. According to Oppenheimer in a recent analysis note, the beauty retailer is anticipated to predict earnings per share (EPS) ranging from $22 to $23 for fiscal year 2025, a figure that falls short of Wall Street's consensus estimate of $23.52.
Oppenheimer has adjusted its own projection for the full-year EPS to $22.65, down from an earlier forecast of $22.95. Ulta Beauty's guidance for 2025 is expected to be somewhat in line with management's insights shared during their Q4 analyst day in October of the previous year. During that event, the company set forth long-term objectives for 2026 and beyond, indicating a projected net sales growth of 4% to 6% and low double-digit EPS growth. "Looking ahead, we anticipate that 2024 and 2025 will function as transitional years as we focus on reinvigorating our growth trajectory.
We remain committed to making strategic investments in 2025 that will ultimately better position us for robust long-term performance," stated Chief Financial Officer Paula Oyibo in the fiscal third-quarter earnings call held in December, as recorded by a FactSet transcript. In light of the evolving market conditions, Oppenheimer has adjusted its price target for Ulta's stock, lowering it from $515 to $435 to reflect a more challenging beauty backdrop. The anticipation surrounding Ulta Beauty's upcoming fourth-quarter results suggests they will closely align with the expectations articulated earlier this year.
Back in January, the company indicated a modest increase in comparable sales for the fourth quarter and projected an operating margin at the high end of their former guidance range, estimating it between 11.6% to 12.4% of sales. Oppenheimer predicts a comparable sales growth of 0.5%, along with an operating margin of 12.5% for the quarter. Recent industry data has indicated a less favorable environment for beauty products as January progressed.
Oppenheimer remarked, "Investor interest toward our more discretionary names, including Ulta, has shown signs of slowing in recent times." Additionally, earlier in January, Ulta announced a leadership change, with Chief Operating Officer Kecia Steelman stepping in as Chief Executive, succeeding Dave Kimbell..