Executive Summary

• Ulta reported 2Q19 revenues of $1.67 billion, up 12.0% year over year but below the consensus estimate of $1.68 billion. The company’s earnings per share (EPS) were $2.76, up 12.2% from the year-ago period and below the consensus estimate of $2.80.
• The company saw comparable store sales growth of 6.2% compared to an increase of 6.5% in the year-ago period, lower than the consensus estimate of 6.6%.
• The company updated full fiscal year guidance to reflect industry-wide headwinds in cosmetics. The company lowered EPS guidance to $11.86-12.06 from $12.83-13.03, versus the consensus of $12.97. Ulta expects revenue growth of 9-12% versus prior guidance of up low double digits and compared to the consensus of 12.3%. Ulta reduced its comp guidance to 4-6% growth from 6-7%, compared to the consensus estimate of 6.7%.
• Ulta plans to open approximately 80 new stores, remodel or relocate 20, and complete approximately 270 store refreshes.