Citi analysts revised the price target for ULTA Salon (NASDAQ:ULTA), reducing it from $400 to $375 while maintaining a Neutral rating on the stock. The outlook reflects concerns over ULTA's upcoming second-quarter performance, which is anticipated to fall short of expectations. The analysts expect ULTA to miss consensus estimates for its earnings per share (EPS) when it reports on August 29, largely due to stagnant comparable sales and a dip in gross margins. Challenges from a weakening beauty category and heightened competition are seen as contributing factors. ULTA faces increased competition from Sephora's presence in Kohl's, Estée Lauder's sales through Amazon, and ULTA's own partnership with Target, making it difficult to drive foot traffic this year. In an effort to safeguard its market share, ULTA is expected to ramp up promotional efforts and marketing investments during the second half of the year. As a result, the analysts predict that ULTA will lower its full-year 2024 guidance to approximately $24.50 per share, down from the current range of $25.20 to $26.00. Looking ahead, the analysts also anticipate that ULTA may announce a reduction in its long-term margin targets, from 14-15% to around 13%, during its analyst day on October 16. This potential shift would align with planned investments in marketing and promotional strategies aimed at navigating an increasingly competitive landscape. Despite the stock's recent 17% gain since August 12, the analysts see the risk/reward balance skewing negatively heading into the second-quarter earnings report.