Investing.com - Shares in Ulta Beauty (NASDAQ:ULTA) surged in premarket U.S. trading on Friday after the cosmetics retailer reported fourth-quarter results that topped Wall Street estimates thanks to strong demand over the holiday quarter.
Ulta announced earnings per share of $8.46 on revenue of $3.5 billion. Analysts polled by Investing.com anticipated per-share income of $7.11 on revenue of $3.46 billion.
Comparable sales increased 1.5%, which analysts at Barclays (LON:BARC) noted was ahead of consensus estimates despite an intensely competitive market. Like other retailers, Ulta rolled out lower prices during the Thanksgiving period to help entice customers prior to the end-of-year holiday shopping season.
Ulta has also been grappling with industry-wide pressures on customer spending, as many shoppers choose to forego some purchases during a time of economic uncertainty and stubbornly elevated inflation.
The firm's guidance for annual sales and profit came in short of expectations, although fragrance prices may be set to rise following a recent escalation in global trade tensions fueled by U.S. President Donald Trump's tariff plans.
For the full-year 2025, per-share profit was guided in a range of $22.50 to $22.90 on revenue between $11.5 billion to $11.6 billion, compared with estimates of $23.47 and $11.67 billion, respectively. Comparable sales growth is forecast to be between 0% to 1%.
"Fiscal 2025 will be a pivotal year as we make purposeful investments to fuel our future growth and move quickly to optimize our business," the company said.
Ulta's exposure to Trump's tariffs is also relatively muted, the Barclays analysts said, adding that direct imports were only around 1% of total group shipments in 2024.
"[A]s such, direct-cost tariff risk is minimal for Ulta," the brokerage wrote in a note to clients. "The company has previously noted slight China exposure in some hair care tools, along with fixtures and store supplies, but all-in-all, risk is low due to reduced reliance on Chinese imports for beauty/personal care products."
(Yasin Ebrahim contributed reporting.)