By Katherine Hamilton

Ulta Beauty shares fell back down after a boost in pre-market trading, as some investors are still seeing margin pressure and macroeconomic challenges ahead for the cosmetics company.

The stock fell 6.8% to $494.82 on Thursday after being up around 3% before the market opened. Shares are still up 14% this year.

Some analysts are worried that Ulta will struggle to expand its margins--despite its raised full-year outlook and strong sales in the latest quarter--as competition from online retailers remains a threat.

Analysts at William Blair and Jefferies maintained hold ratings for the stock, both citing margin pressure. Operating margins have declined compared with the previous year and guidance for those margins in the back half of the year indicates a slowdown, William Blair analyst Dylan Carden said in a note.

Ulta also has big plans to make investments to try to maintain market share as competition from e-commerce rivals intensifies. Those investments will likely make it difficult for Ulta to expand operating margins, Jefferies analyst Ashley Helgans said.

Ulta Chief Executive Kecia Steelman said she is still prudent about how the condition of the consumer will evolve during the second half of the year.

"While near-term uncertainty persists, we're staying focused on what we can control," she said.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

August 29, 2025 14:01 ET (18:01 GMT)

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