Oppenheimer says Ulta’s new longer-term targets appear in line with expectations

Oppenheimer notes that ahead of Ulta Beauty’s analyst day, management reaffirmed FY24 guidance, implicitly talked down FY25, and introduced new longer-term targets for FY26 and beyond. The company expects FY24 and FY25 to be transitional years as the company manages through near-term category dynamics. For FY26 and beyond, new longer-term targets include 4%-6% sales growth, mid-single-digit operating profit growth, and low double-digit EPS growth. The firm points out that these parameters including muted commentary on FY25 appear to be directionally consistent with its preview and model update from a few weeks ago. The firm would still be positioned to take advantage of dips from here in a likely continued volatile trade for longer-term players. The firm has an Outperform rating on the shares with a price target of $435.