© Reuters. Citi sees Ulta lacking expectations and guiding decrease, expects shares to underperform
Analysts at Citi lowered the value goal on Ulta Magnificence (NASDAQ:) by $35 to $440 per share on expectations the corporate will miss analyst targets when it stories this week.
Consequently, they’ve opened a 30-day destructive catalyst watch on ULTA inventory.
“We anticipate a slight 3Q EPS miss vs consensus ($4.92 vs cons $4.97) driven by lower GM (-190bps vs cons -140bps) due to the impact of lapping favorable pricing dynamics LY and higher shrink/promos,” the analysts stated in an EPS preview word.
Furthermore, Citi sees Ulta reducing full-year outlook because the administration takes “a more cautious view of the holiday season given slowing category trends, higher promos/ongoing shrink headwinds.”
“As we look to F24, we believe these challenges will continue and with the macro environment uncertain, we are taking a more cautious view. Our F24E of $25.30 is below cons $26.83 based on lower sales/GM. We believe there is risk that shrink could be impacting ULTA beyond just the fragrance category, making it a more structural challenge into F24,” the analysts added.
Citi charges Ulta inventory as Impartial as risk-reward at these ranges is “more balanced.”
Ulta inventory is down 0.2% in pre-open Monday.
