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Key Takeaways
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Ulta Beauty announced CEO Dave Kimbell's retirement Monday.
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JPMorgan analysts still call the company a "top pick," citing its improved fourth-quarter outlook.
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Ulta's Q4 comparable sales and operating margin update implies higher earnings per share (EPS) than Wall Street's consensus, the analysts said.
Ulta Beauty (ULTA) announced Chief Executive Officer (CEO) Dave Kimbell's retirement after the bell Monday, but JPMorgan analysts don't see the transition as a negative for the company.
The analysts said late Monday that the cosmetics retailer remains one of its "top picks" and reiterated their $480 price target. Ulta stock was little changed Tuesday afternoon at $431.43 after surging as much as 6.7% earlier in the session.
JPMorgan Cites Outlook Boost as CEO Departs
Ulta on Monday also raised its fiscal fourth-quarter comparable sales and operating margin outlook to "make sure that investors clearly understood that the CEO change had nothing to do with 4Q performance," the JPMorgan note said. Kimbell has been succeeded by Chief Operating Officer (COO) Kecia Steelman.
A 1% increase in comparable sales and an operating margin of just above Ulta's previously projected range would imply current-quarter earnings per share (EPS) of $7.21, above Wall Street's consensus of $6.76, JPMorgan said.
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