Retail exchange traded funds that have been hit hard by worries over a slowing economy were looking for a boost Wednesday from solid earnings from Ulta Salon, Cosmetics & Fragrance (NasdaqGS: ULTA).
The company late Tuesday said first-quarter net sales rose nearly 21% from the year-ago period.
“Ulta continues to defy gravity, posting strong results quarter after quarter, thus justifying its rich valuation,” said Jefferies analysts, who have a hold rating on the stock. “Management is doing a great job re-engaging the customer, taking market shares and growing square feet prudently.”
The stock represents nearly 3% of PowerShares Dynamic Retail (NYSEArca: PMR). Ulta shares climbed 12% before Wednesday’s bell.
Separately, Gap (NYSE: GPS) shares fell 2% in premarket trading Wednesday following a downgrade at Barclays.