Ulta’s long-term plan indicates 2025 to be transitional year, says DA Davidson

Ulta announced new long-term financial targets at Wednesday’s analyst day, including net sales growth of 4%-6%, mid-single-digit operating profit growth, operating margins of 12%, and low-double digit EPS growth, DA Davidson tells investors in a research note. The plan also calls for increased store growth an an increase in Ulta‘s share buyback program, but positives like maintaining the 2024 guidance are offset by 2025 appearing to be a transitional year and consensus estimates for 2026 at the high-end of Ulta’s long-term plan, DA Davidson says. The firm, which made no change to its Buy rating or $435 price target expects shares to trade down a bit with pressure from consensus estimates likely coming down.