Ulta's weak sales outlook 'could prove conservative': Analyst

03/15/2024 21:34

Ulta Beauty (ULTA) shares are falling Friday morning despite the company beating earnings estimates in its latest quarterly report. The company's weaker-than-expected guidance has weighed heavily on the stock's performance. To provide insight into investor outlook, Canaccord Genuity Managing Director Susan Anderson joins Yahoo Finance Live. Anderson acknowledges that the bottom line was "a little bit light" for investor liking, and notes that investments and promotions are not as favorable as investors would prefer. However, she highlights that "the beauty business remains very strong," positioning Ulta to benefit from the industry's robust performance. The analyst suggests that the weak sales guidance "could prove conservative" thanks to the "newness" of the business. "Newness," drives 20 to 30% of Ulta sales and involves introducing new brands and new products from existing brands, Anderson explains. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Angel Smith

Anderson acknowledges that the bottom line was "a little bit light" for investor liking, and notes that investments and promotions are not as favorable as investors would prefer. However, she highlights that "the beauty business remains very strong," positioning Ulta to benefit from the industry's robust performance. The analyst suggests that the weak sales guidance "could prove conservative" thanks to the "newness" of the business.

"Newness," drives 20 to 30% of Ulta sales and involves introducing new brands and new products from existing brands, Anderson explains.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith