What Happened in the Stock Market Today

A strong jobs report from the U.S. Department of Labor boosted stocks on Friday, with major benchmarks making big moves. The Dow Jones Industrial Average (DJINDICES:^DJI) erased most of its losses from earlier in the week and the S&P 500 (SNPINDEX:^GSPC) actually closed up for the week.

Today’s stock market

IndexPercentage ChangePoint Change
Dow1.22%337.27
S&P 5000.91%28.48

As for individual stocks, investors liked third-quarter results from Ulta Beauty (NASDAQ:ULTA), and Okta (NASDAQ:OKTA) beat already-high expectations for revenue growth.

Ulta Beauty grows despite cosmetics headwinds

Cosmetics and personal care retailer Ulta Beauty reported profit growth in the third quarter that beat expectations that the company had tamped down considerably three months ago, and shares soared 11.1%. Net sales increased 7.9% to $1.68 billion, close to what analysts were expecting. Earnings per share rose 3.2% $2.25, well above the consensus estimate of $2.13.

Comparable sales grew 3.2%, compared with 6.2% last quarter and 7.8% in the period a year ago. Growth deceleration like that would ordinarily cause a big share price drop, but Ulta took that hit last quarter when it said that cosmetics, which account for over half of the company’s sales, are going through a cyclical decline that will last several quarters. Ulta stock plummeted almost 30% in one day on the lowered outlook.

This quarter, the negative trend in cosmetics continued as expected, but Ulta saw expansion in the skincare, fragrance, and hair products categories, and it says it’s gaining market share in all major beauty categories. The company narrowed guidance ranges for the full year, slightly raising the midpoint for EPS and nudging down sales, and those moves had investors thinking Ulta’s slump may have bottomed out.

Okta continues to expand revenue

Identity services provider Okta reported another quarter of rapid growth that beat expectations, but investors took the news in stride and shares slipped 0.7%. Revenue in Q3 increased 45% to $153 million and the company lost $0.53 per share on a GAAP basis. Excluding Okta’s sizable stock-based compensation and some other expenses, adjusted loss per share was $0.07 compared with per-share loss of $0.04 in Q3 last year. Analysts were expecting an adjusted loss of $0.12 per share on revenue of $144 million.

Okta continues to attract new customers wanting to protect their cloud-based data, saying on the conference call that it added 400 new clients in the quarter to bring the total to 7,400. Existing customers are also signing contracts that are bigger and longer, resulting in remaining performance obligations — the amount the company expects to collect on booked contracts — ballooning 68% to $1.03 billion.

Okta raised guidance for the year, and although expectations are already high for this rapid-growth business, it continues to exceed them.

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