BofA Securities analyst Lorraine Hutchinson reiterated the Neutral rating on Ulta Beauty, Inc. (NASDAQ:ULTA) with a price objective of $380.

The analyst reduced the FY25 EPS estimate by 8% to $22.41, reflecting a 3% decline due to more store openings offset by lower margins.

The company projects annual sales growth of 4-6%, comparable sales growth of 3-4%, and low-double-digit EPS growth.

Per Hutchinson, FY25 may be a transitional year, with results falling short of long-term targets as the company navigates softer sales while investing in initiatives to strengthen its market position and reignite growth.

Additionally, the company announced a new $3 billion share buyback program, which is projected to contribute 500 basis points to annual EPS growth, Hutchinson notes.

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The analyst emphasizes that the company will concentrate on enhancing its product assortment through new offerings and brand partnerships, which drive 20%-30% of annual revenue; management has indicated a strong pipeline.

Additionally, the focus will be on improving the in-store and online guest experience, boosting the loyalty program, expanding social media presence, and refining the promotional strategy.

The analyst notes that investment will be directed toward marketing, loyalty initiatives, sampling, digital exposure, major events, employee training, and in-store activities.

The analyst lowered the FY26 EPS estimate to $22.41 from $24.44.

Price Action: ULTA shares are trading lower by 0.10% to $372.82 at last check Thursday.

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