Ulta Beauty Earnings Show Sales Strength, EPS Slip

Ulta Beauty (ULTA) reported earnings on March 12, 2026, showing sales strength alongside a decline in diluted earnings per share (EPS). The company issued fiscal 2026 guidance projecting slower growth, shifting investor focus to margins and capital allocation.

Quarterly and Full-Year Results

Ulta Beauty posted fourth-quarter 2025 net sales of $3.9 billion, up 11.8% year over year. Comparable sales rose 5.8%, driven by a 4.2% increase in average ticket size and a 1.6% rise in transactions. Diluted EPS fell to $8.01 from $8.46 a year earlier. Operating income totaled $476.9 million, or 12.2% of net sales, down from a 14.8% margin in the prior year. Gross profit was $1.5 billion, representing 38.1% of net sales.

Selling, general, and administrative expenses increased 23.0% to $1.0 billion, or 25.7% of net sales, up from 23.4% in the year-ago quarter. The company attributed the rise to higher advertising costs, corporate overhead, and incentive compensation.

For fiscal 2025, Ulta Beauty recorded net sales of $12.4 billion, a 9.7% increase from the prior year, with comparable sales growth of 5.4%. Diluted EPS rose 1.2% to $25.64, while operating income declined to $1.5 billion, or 12.4% of net sales, from 13.9% the previous year. Kecia Steelman, president and CEO, said, "The Ulta Beauty team closed the year with momentum, delivering strong fourth quarter and full-year sales and continued market share gains."

Fiscal 2026 Guidance and Capital Allocation

The company forecasted fiscal 2026 net sales growth of 6% to 7%, comparable sales growth of 2.5% to 3.5%, and operating income growth of 6% to 9%. Diluted EPS is projected between $28.05 and $28.55. Capital expenditures are expected to range from $400 million to $450 million. The guidance is based on current estimates and highlights risks including consumer-spending volatility, tariffs, and geopolitical events.

As of Jan. 31, 2026, Ulta Beauty held $424.2 million in cash and $2.2 billion in inventories, a 10.8% increase attributed to new brands, the Space NK acquisition, and about 60 net new stores. Fiscal 2025 capital spending totaled $434.8 million.

Share repurchases resumed, with 2.0 million shares bought back for $890.5 million. The company has $1.8 billion remaining under a $3.0 billion authorization. The fiscal 2025 product mix consisted of 38% cosmetics, 24% skincare and wellness, 19% haircare, 13% fragrance, 4% services, and 2% other categories.