On June 3, Ulta Beauty declined 5.59% in regular trading, trading at approximately $471.25/share with trading volume of $190 million. Despite reporting Q1 EPS of $7.74 that significantly beat the FactSet consensus estimate of $6.89 by 12.83%, and revenue of $3.16 billion surpassing the expected $3.12 billion, the stock reversed earlier after-hours gains of over 8%.

The company raised its full-year EPS guidance to $28.36-$28.80, up from the prior range of $28.05-$28.55. However, Morgan Stanley cut its target price from $700 to $630 while maintaining an Overweight rating. Additionally, management explicitly warned that inflation and rising oil prices continue to pressure consumers, highlighting macroeconomic uncertainty. The combination of earnings already being priced in, institutional valuation downgrades, and forward-looking macro concerns triggered profit-taking among investors.

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