Ends Tonight: Tapping into a $2.1 trillion total addressable market

Is Ulta’s Markdown Already in the Price?

Hey there, bargain hunter. Ulta Beauty reports after today’s close, and the setup is genuinely interesting: a stock trading around $534, well off a $714.97 52-week high, with Wall Street consensus targets clustering near $623. The Ulta Beauty at Target shop-in-shop, once spread across 610 locations, has reached its planned end date in August 2026. The partnership is over. The question is whether the market already charged you for that loss of distribution, or whether it’s still working its way through the price.

Scoreboard

Consensus for tonight’s Q2 report sits at $2.97 billion in revenue, implying about 6.5% growth year over year, with EPS of $6.20, up roughly 7.3% from the same period last year. That’s a step down from Q1’s pace. Q1 net sales rose 11.1% to $3.1639 billion, comparable sales climbed 5.3%, and diluted EPS came in at $7.74, comfortably ahead of the $6.90 consensus estimate. Management itself flagged Q2 as “our toughest comp comparison on a 1-year basis” heading into the quarter. A slower quarter was baked in. The debate is whether $6.20 is a floor or a ceiling.

The Real Reason the Stock Is Here

The Ulta Beauty at Target program ran in 610 stores since 2021. About five years after it started, the shop-in-shop partnership ended, with both companies mutually deciding to conclude the agreement in August 2026. The separation came to an end this month. For Ulta, those 610 locations were a traffic funnel into the brand, a loyalty hook, and a prestige halo inside a mass retailer. Losing them is real.

The counterargument: Ulta framed the partnership conclusion as a manageable change, and it can now focus on its core business and longer-term growth initiatives. Target is already converting that same real estate directly into Target Beauty Studio, launching Sept. 10 in more than 600 stores and online. The channel simply reconfigures. Ulta’s own stores, loyalty database of 40-plus million members, and standalone digital presence are the real moat, not a concession inside a mass retailer that was, by some accounts, struggling with in-store execution.

The Business and What It Earns

Ulta is the dominant U.S. specialty beauty retailer: roughly 1,500 standalone stores, a loyalty program that drives the majority of sales, and a product range that runs from drugstore staples to prestige fragrance in one trip. Beyond the U.S., Ulta has started building an international footprint through its 2025 acquisition of Space NK in the U.K. and Ireland.

Key Metrics to Watch Tonight

• Revenue: Consensus at $2.97 billion, up about 6.5% year over year.
• EPS: $6.20 consensus, up about 7.3% from the year-ago quarter.
• Comparable store sales: Q1 comps grew 5.3%. Any deceleration here gets punished.
• Full-year guidance: The company’s current outlook calls for diluted EPS of $28.36 to $28.80 and net sales growth of 6% to 7%.
• Gross margin: Management has discussed transportation expense as a cost headwind, including higher fuel costs.
• Beat rate: ULTA has a trailing four-quarter earnings surprise of nearly 10%, on average.

Is It Cheap?

Ulta is heading into earnings with an average analyst price target around $623.5, compared to a recent share price around $534. That implies roughly 15%-16% upside to the mean target. At roughly 19x forward earnings on the low end of guidance, this is not a distressed valuation, but it is meaningfully below where the stock traded 18 months ago. The Target overhang was the excuse. If tonight’s numbers hold guidance and comps stay positive, the excuse goes away.

Bull / Base / Bear

Bull: Ulta beats $6.20 EPS, raises guidance, and management reframes the Target exit as a margin-accretive cleanup. The stock closes the gap toward $620 over the next two quarters as the headline risk evaporates.

Base: In-line quarter, guidance held steady, comps grow 3-4%. Stock moves modestly higher but stays range-bound while the market waits for Q3 to confirm that no Target-related traffic falloff materialized.

Bear: Comps disappoint, gross margin erodes further on freight costs, and guidance gets trimmed. The stock revisits the low $490s, and the Target wind-down becomes the story rather than a footnote.

Action Plan

If you have no position and the bull case intrigues you, tonight is an information event, not an entry point. Wait for the results and the guidance commentary before committing. Investors will scrutinize comparable sales trends, gross margin trajectory, and any updates to full-year guidance. A beat-and-raise tonight that explicitly addresses the post-Target traffic picture earns a starter position. A beat with vague guidance does not.

Existing holders: hold through the report. The downside is limited by a stock that has already absorbed a year of headline risk.

Cheap Investor Checklist

• Does Q2 EPS beat $6.20 consensus?
• Do comparable sales hold above 3%?
• Does full-year guidance stay at $28.36 or higher?
• Does management quantify the traffic impact from Target’s closure?
• Does gross margin hold flat or improve quarter over quarter?
• Any update on Space NK contribution and international trajectory?
• Any acceleration in share buybacks, which management called a compelling opportunity in Q1?

Bottom Line

If Ulta delivers $6.20-plus EPS, holds the full-year guide, and comps stay positive tonight, the Target wind-down is already in the price and the discount to roughly $623 consensus targets becomes a genuine opportunity. If comps slip and management hedges on guidance, the markdown in ULTA stock has further to run. Tonight’s call tells you which story you’re in.