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Ulta Beauty Q2 EPS rose 13.3% to $6.55 as net sales climbed 8.9% to $3.04 billion.
ULTA posted 3.8% comparable sales growth, with e-commerce rising in the high-teens range.
Ulta Beauty raised fiscal 2026 sales, comparable sales and EPS guidance after the strong quarter.
Ulta Beauty, Inc. (ULTA - Free Report) delivered another solid quarter as beauty newness, omnichannel demand and disciplined execution supported profitable growth. For the second quarter of fiscal 2026, earnings of $6.55 per share rose 13.3% year over year and beat the consensus estimate of $6.21.
Net sales increased 8.9% to $3,035.7 million, topping the consensus estimate of $2,973 million. Comparable sales jumped 3.8%, driven by higher average ticket, while transactions were roughly flat.
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Ulta Beauty continued to generate growth across stores and digital. E-commerce sales increased in the high-teens range, marking the sixth consecutive quarter of double-digit digital growth. Comparable-store sales posted modest growth as the company lapped a strong year-ago performance.
The company opened 13 net new Ulta Beauty stores and one net new Space NK store during the quarter. Excluding Space NK, total sales increased in the strong mid-single-digit range. Stores fulfilled more than 50% of e-commerce orders, allowing ULTA to use its physical network to improve omnichannel convenience and fulfillment efficiency.
Ulta Beauty's Category Mix Shows Divergence
Fragrance remained the strongest category, generating high-teen comparable sales growth on successful gifting events and compelling newness. Haircare delivered high-single-digit comparable growth, supported by prestige haircare, treatments and hair tools. K-Beauty sales also increased at a robust double-digit rate, with nearly half of sales coming from exclusive brands or products.
Makeup comparable sales were approximately flat as prestige gains offset a low-single-digit decline in mass makeup. Skincare and wellness declined modestly, with growth in prestige and mass skincare and double-digit wellness gains more than offset by weaker body-care sales. Services generated mid-single-digit comparable growth on solid engagement in salon and specialty services.
ULTA Protects Profitability Amid Mix Pressure
Gross profit increased 8.7% year over year to $1,186.95 million. Gross margin declined 10 basis points (bps) to 39.1%, primarily reflecting the Space NK business mix. Within the core Ulta Beauty business, lower shrink, supply-chain productivity and merchandise-margin preservation supported modest gross-margin improvement.
SG&A expenses increased 8.2% to $802.78 million, but declined 20 bps as a percentage of sales to 26.4%. Lower incentive compensation and corporate-overhead leverage partly offset Space NK costs and higher advertising investments. Operating income rose 10.1% to $379.64 million, while operating margin improved 10 bps to 12.5%. Net income increased 8.1% to $282.01 million.
Ulta Beauty Scales Loyalty and New Growth Engines
Ulta Beauty ended the quarter with about 47 million active loyalty members, up 3% year over year, while average spending per member increased. The mobile app represented more than 60% of online sales, and management continued using personalization capabilities to drive incremental sales and engagement.
Marketplace expanded to more than 450 brands and over 12,000 SKUs, while UB Media delivered double-digit growth. Space NK generated robust sales growth and continued to gain market share. In Mexico, Ulta Beauty ended the quarter with 12 stores as the company continued expanding its international presence.
ULTA Maintains Disciplined Capital Deployment
Merchandise inventory was nearly flat year over year at $2,406.73 million, while inventory per store declined 4.1%. Cash and short-term investments totaled $213.45 million, while short-term debt was $339.58 million. First-half operating cash flow reached $381.59 million, and capital expenditures totaled $139.53 million.
ULTA repurchased $791.10 million of stock during the first six months of fiscal 2026. The company raised its fiscal 2026 repurchase target to $1,800 million and expects to use the remaining $1,000 million under its current share repurchase authorization by fiscal year-end.
Ulta Beauty Raises Fiscal 2026 Outlook
Management raised fiscal 2026 net sales growth guidance to 6.7-7.2% from 6-7% and comparable sales growth expectations to 3.2-3.7% from 2.5-3.5%. Operating income growth is now projected at 8.3-9.3%, up from 6.5-9%. Earnings guidance increased to $28.70-$29.00 per share from $28.36-$28.80.
For the second half, Ulta Beauty expects net sales growth of 4-5%, comparable sales growth of 2-3%, operating profit growth of 6-8% and earnings growth of 9-12%. Full-year gross margin is expected to remain roughly flat, while operating margin could improve by up to 20 bps. Capital expenditures remain projected at $400-$450 million.
Shares of the Zacks Rank #3 (Hold) company have gained 6.1% in the past three months against the industry’s 3.8% decline.
The Zacks Consensus Estimate for Sally Beauty’s current financial-year sales and EPS is expected to rise 0.8% and around 9%, respectively, from the year-ago reported figures.
Five Below, Inc. (FIVE - Free Report) operates as a specialty value retailer in the United States and currently holds a Zacks Rank #2. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.
The Zacks Consensus Estimate for Five Below’s current fiscal-year sales and earnings indicates growth of 15.1% and 36.7%, respectively, from the year-ago reported numbers.
Target Corporation (TGT - Free Report) offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS indicates growth of 4.6% and 37.7%, respectively, from the year-ago reported numbers. TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average.
View the Zacks #1 Rank List
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Ulta Beauty Q2 Earnings Beat as Sales Rise, FY26 View Raised
Key Takeaways
Ulta Beauty, Inc. (ULTA - Free Report) delivered another solid quarter as beauty newness, omnichannel demand and disciplined execution supported profitable growth. For the second quarter of fiscal 2026, earnings of $6.55 per share rose 13.3% year over year and beat the consensus estimate of $6.21.
Net sales increased 8.9% to $3,035.7 million, topping the consensus estimate of $2,973 million. Comparable sales jumped 3.8%, driven by higher average ticket, while transactions were roughly flat.
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote
ULTA's Omnichannel Sales Stay Firm
Ulta Beauty continued to generate growth across stores and digital. E-commerce sales increased in the high-teens range, marking the sixth consecutive quarter of double-digit digital growth. Comparable-store sales posted modest growth as the company lapped a strong year-ago performance.
The company opened 13 net new Ulta Beauty stores and one net new Space NK store during the quarter. Excluding Space NK, total sales increased in the strong mid-single-digit range. Stores fulfilled more than 50% of e-commerce orders, allowing ULTA to use its physical network to improve omnichannel convenience and fulfillment efficiency.
Ulta Beauty's Category Mix Shows Divergence
Fragrance remained the strongest category, generating high-teen comparable sales growth on successful gifting events and compelling newness. Haircare delivered high-single-digit comparable growth, supported by prestige haircare, treatments and hair tools. K-Beauty sales also increased at a robust double-digit rate, with nearly half of sales coming from exclusive brands or products.
Makeup comparable sales were approximately flat as prestige gains offset a low-single-digit decline in mass makeup. Skincare and wellness declined modestly, with growth in prestige and mass skincare and double-digit wellness gains more than offset by weaker body-care sales. Services generated mid-single-digit comparable growth on solid engagement in salon and specialty services.
ULTA Protects Profitability Amid Mix Pressure
Gross profit increased 8.7% year over year to $1,186.95 million. Gross margin declined 10 basis points (bps) to 39.1%, primarily reflecting the Space NK business mix. Within the core Ulta Beauty business, lower shrink, supply-chain productivity and merchandise-margin preservation supported modest gross-margin improvement.
SG&A expenses increased 8.2% to $802.78 million, but declined 20 bps as a percentage of sales to 26.4%. Lower incentive compensation and corporate-overhead leverage partly offset Space NK costs and higher advertising investments. Operating income rose 10.1% to $379.64 million, while operating margin improved 10 bps to 12.5%. Net income increased 8.1% to $282.01 million.
Ulta Beauty Scales Loyalty and New Growth Engines
Ulta Beauty ended the quarter with about 47 million active loyalty members, up 3% year over year, while average spending per member increased. The mobile app represented more than 60% of online sales, and management continued using personalization capabilities to drive incremental sales and engagement.
Marketplace expanded to more than 450 brands and over 12,000 SKUs, while UB Media delivered double-digit growth. Space NK generated robust sales growth and continued to gain market share. In Mexico, Ulta Beauty ended the quarter with 12 stores as the company continued expanding its international presence.
ULTA Maintains Disciplined Capital Deployment
Merchandise inventory was nearly flat year over year at $2,406.73 million, while inventory per store declined 4.1%. Cash and short-term investments totaled $213.45 million, while short-term debt was $339.58 million. First-half operating cash flow reached $381.59 million, and capital expenditures totaled $139.53 million.
ULTA repurchased $791.10 million of stock during the first six months of fiscal 2026. The company raised its fiscal 2026 repurchase target to $1,800 million and expects to use the remaining $1,000 million under its current share repurchase authorization by fiscal year-end.
Ulta Beauty Raises Fiscal 2026 Outlook
Management raised fiscal 2026 net sales growth guidance to 6.7-7.2% from 6-7% and comparable sales growth expectations to 3.2-3.7% from 2.5-3.5%. Operating income growth is now projected at 8.3-9.3%, up from 6.5-9%. Earnings guidance increased to $28.70-$29.00 per share from $28.36-$28.80.
For the second half, Ulta Beauty expects net sales growth of 4-5%, comparable sales growth of 2-3%, operating profit growth of 6-8% and earnings growth of 9-12%. Full-year gross margin is expected to remain roughly flat, while operating margin could improve by up to 20 bps. Capital expenditures remain projected at $400-$450 million.
Shares of the Zacks Rank #3 (Hold) company have gained 6.1% in the past three months against the industry’s 3.8% decline.
Stocks to Consider
Sally Beauty Holdings, Inc. (SBH - Free Report) , a retailer and distributor of professional beauty supplies, currently has a Zacks Rank #2 (Buy). SBH delivered a trailing four-quarter earnings surprise of 6.4%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Sally Beauty’s current financial-year sales and EPS is expected to rise 0.8% and around 9%, respectively, from the year-ago reported figures.
Five Below, Inc. (FIVE - Free Report) operates as a specialty value retailer in the United States and currently holds a Zacks Rank #2. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.
The Zacks Consensus Estimate for Five Below’s current fiscal-year sales and earnings indicates growth of 15.1% and 36.7%, respectively, from the year-ago reported numbers.
Target Corporation (TGT - Free Report) offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS indicates growth of 4.6% and 37.7%, respectively, from the year-ago reported numbers. TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average.