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Choosier Shoppers Not Seen Hurting Ulta's Q2 Sales, Analysts Say

By Liz Moyer AiVIF.com -- Cash-strapped consumers are making tradeoffs at the cash register, buying food and putting off purchases of clothing and home decorating items, but...
Choosier Shoppers Not Seen Hurting Ulta's Q2 Sales, Analysts Say © Reuters.

By Liz Moyer

AiVIF.com -- Cash-strapped consumers are making tradeoffs at the cash register, buying food and putting off purchases of clothing and home decorating items, but they haven’t stopped buying beauty products, according to some analysts.

On Tuesday, Deutsche Bank’s Michael Lasser called out Ulta Beauty Inc (NASDAQ:ULTA), the cosmetics and beauty product retailer, which is set to report earnings later this month. Lasser kept a buy rating on the shares and a $500 price target, brushing aside worries about slowing consumption.

Lasser said Ulta shoppers have shown they are still interested in buying products, and their engagement “remained strong” in the recent quarter. Ulta shares were up 1.9% on Tuesday and are up about 0.4% for the year. 

Currently trading around $411, Lasser’s price target assumes 21% upside. 

The call comes a day after an Oppenheimer analyst also said the quarter should be another “beat and raise” quarter. The analyst has an outperform rating on the stock with a $485 price target.

One of the drivers of sales is a partnership Ulta has with Target Corporation (NYSE:TGT), which is opening hundreds of smaller Ulta stores within its own stores and eventually plans to have such outposts in 40% of its U.S. locations. 

Target reports earnings early Wednesday, and it could talk about sales in the beauty category on its conference call. Analysts expect the retailing giant to report earnings of 80 cents a share on revenue of $26.1 billion.

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    USD/CAD 1.3780 ↑ Buy  
    EUR/JPY 168.32 ↑ Buy  
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    Gold 2,295.80 ↑ Sell  
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    Copper 4.5305 ↑ Buy  
    Crude Oil WTI 81.14 ↑ Sell  
    Brent Oil 85.62 ↑ Sell  
    Natural Gas 1.946 ↑ Sell  
    US Coffee C 213.73 ↑ Sell  
    Euro Stoxx 50 4,920.55 ↑ Sell  
    S&P 500 5,035.69 ↑ Sell  
    DAX 17,921.95 ↑ Sell  
    FTSE 100 8,144.13 Sell  
    Hang Seng 17,763.03 ↑ Sell  
    Small Cap 2000 1,973.05 ↑ Sell  
    IBEX 35 10,854.40 Neutral  
    BASF 49.155 ↑ Sell  
    Bayer 27.35 ↑ Sell  
    Allianz 266.60 ↑ Sell  
    Adidas 226.40 ↑ Sell  
    Lufthansa 6.714 Neutral  
    Siemens AG 175.90 ↑ Sell  
    Deutsche Bank AG 15.010 Neutral  
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