Ulta Beauty (ULTA) Stock Forecast & Price Target

Ulta Beauty's strong financial performance is underscored by a 12.9% increase in net sales, driven by robust market share gains across multiple categories, including prestige skincare and mass makeup, along with the contribution from newly launched brands. The company reported a comp store sales increase of 6.3%, significantly surpassing the anticipated 3.5%, and achieved a gross margin expansion of 70 basis points year-over-year, reaching 40.4%. Additionally, Ulta's stock has demonstrated impressive performance, appreciating 38% year-to-date, outperforming the broader S&P 500 and retail indices, highlighting its strong competitive position in the beauty retail market.

Ulta Beauty's Q3 earnings per share (EPS) remained flat year-over-year at $5.14, reflecting potential stagnation in growth amid multiple economic challenges. Key risks influencing a negative outlook include a deteriorating macroeconomic environment, declining consumer confidence, increased competition from e-commerce retailers, and supply chain vulnerabilities, as the top ten vendor partners account for approximately 50% of net sales. Additionally, potential losses in royalty revenue from the Target partnership in late 2026, alongside rising labor costs and unfavorable weather impacts on store traffic, suggest the company may face significant headwinds moving forward.