By Senad Karaahmetovic

After the company raised its full year revenue guidance, and exceeded analyst estimates, shares of Ulta beauty (NASDAQ:) rose more than 9% Friday in premarket trading

ULTA reported a Q1 EPS value of $6.30. This compares to $4.10 for the previous year and surpasses the consensus estimate of $4.45 per shares. The net sales reached $2.35 Billion, an increase of 21% YoY over the consensus estimate of $2.12Billion.

Comparable sales increased 18% in this period, as compared with the 65.9% increase in the previous year, while analysts projected growth of 7.72%. Analysts were anticipating 38.9% growth in Q1, while the gross margin for Q1 was 40.1%. Ulta’s merchandise inventory was $1.57 Billion, an increase of 16% YoY. This is higher than analyst expectations and surpasses the $1.53 Billion analysts expected.

According to the company, FY 2023 EPS will be $19.20-20.21. That’s an increase from its previous forecast of $18.20-18.70 and surpassing the estimated $18.82 per shares. Ulta anticipates FY net sales between $9.35 and $9.55 Billion, an increase of 9 to 5 billion from $9.05 to $9.15 trillion, and in comparison to estimates of $9.19Billion.

Piper Sandler analyst Korinne Wolfmeyer hiked the price target to $485.00 per share from $465.00 after the company delivered “a strong Q1 report that beat across pretty much all metrics and raised guidance on the top and bottom lines.”

“Consumers are returning to the stores ready to spend, and makeup is finally seeing a rebound. Although margins are affected by many factors (mainly strategic investments and macro-driven), the management raised EBIT guidance at mid-point by 40bp. We think this could be even conservative. Longer term, we continue to like the trajectory here and think there’s opportunity for upside as one of the more resilient names in beauty continues to grow and scale,” Wolfmeyer told clients.

Stephanie Wissink (an analyst at Jefferies) upgraded ULTA’s status from Hold to Purchase with a target price of $475.00 (from 400.00).

The analyst wrote that ULTA’s results show that demand had returned to pre-pandemic levels with improving and sustained momentum.