Ulta Beauty Inc (NASDAQ:ULTA) stock rose 3.25% (As on June 13, 11:52:01 AM UTC-4, Source: Google Finance) after Loop Capital upgraded their outlook for the company from Hold to Buy  and adjusts price target to $520 From $490. Ulta Beauty raised its full-year 2023 outlook for sales but lowered its guidance for operating margin. The lowered margin guidance includes the impact of higher inventory shrink. For FY2023, the company now expects net sales of $11.0-11.1 billion versus its previous outlook of $10.95-11.05 billion. Comparable sales are expected to increase 4-5% for the year. Operating margin is now expected to range between 14.5-14.8% versus the prior range of 14.7-15.0%. EPS is expected to be $24.70-25.40 in FY2023. Cash and cash equivalents at the end of the first quarter of fiscal 2023 totaled $636.4 million. Merchandise inventories, net at the end of first quarter of fiscal 2023 increased to $1.75 billion compared to $1.57 billion at the end of the first quarter of fiscal 2022. The increase is due to inventory to support higher demand, product cost increases, 41 net new stores, new brand launches, and brand expansions.

During the first quarter of fiscal 2023, the Company repurchased 541,108 shares of its common stock at a cost of $285.8 million, including excise tax. As of April 29, 2023, $816.5 million remained available under the $2.0 billion share repurchase program announced in March 2022 Real estate activity in the first quarter of fiscal 2023 included five new stores located in Boulder, CO; Denton, TX; Seattle, WA; Surprise, AZ; and Warrensville Heights, OH. In addition, the Company closed one store, relocated one store, and remodeled two stores. At the end of the first quarter of fiscal 2023 the Company operated 1,359 stores totaling 14.2 million square feet.

Moreover, Ulta Beauty continues to see sales growth. Its net sales increased over 12% year-over-year to $2.6 billion in the first quarter of 2023. The top line performance was driven by comparable sales growth, strong performance by new stores, and growth in other revenue. Comparable sales increased 9.3% in the quarter, driven by double-digit growth in store traffic and transactions, which more than offset a drop in average ticket. Comp sales also benefited from product price increases. The company has been seeing sales in its mass category grow faster than sales in its prestige categories. This could either be due to increased consumer price sensitivity or due to brand preference. Due to its wide range of price points, Ulta Beauty is well-positioned to capture consumer shifts within price points.