Ulta Beauty Bets Skincare Routines Will Remain Sacred Through Economic Strains — And Retail Traders Are Fully Onboard

Ulta Beauty (ULTA) delivered robust quarterly results and raised its full-year forecast on Thursday, signaling continued strength in the beauty and cosmetics sector despite signs of a broader consumer spending slowdown.

CEO Kecia Steelman indicated that consumers are willing to cut spending on other discretionary categories before they limit their spending on beauty regimens.

Ulta Beauty shares gained 8.4% in extended trading. If the gains hold in the regular session, it would be the stock's best intraday performance in nearly two months.

The company increased the upper end of its annual sales forecast range to $11.7 billion from $11.6 billion. It expects a minimum of $11.5 billion of revenue for the year.

Same-store sales growth projection is now flat to up 1.5%, compared with prior guidance of flat to up 1%. Earnings per share (EPS) are now expected to be $22.65 to $23.20, up from $22.50 to $22.90.

"The operating environment is fluid, and our outlook reflects uncertainty around how consumer demand could evolve," Steelman said.

In the first quarter ended May 3, the company's net sales rose to $2.85 billion and adjusted EPS rose to $6.70. Analysts were expecting $2.79 billion in revenue and $5.81 EPS.

The fragrance category led growth with double-digit gains. New brand launches also boosted sales, while skincare and haircare saw modest performance, according to the company.

On Stocktwits, the retail sentiment jumped to 'extremely bullish' from 'bullish,' with a similar increase in message volume.

Several users posted positive comments about the company's earnings.

One user said that the forecast raise signals the right direction. “Ill take it,” they said.

Ulta Beauty shares are down 3% this year.

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