Ulta Beauty reported stronger-than-expected fourth-quarter revenue but fell short of profit expectations as the retailer cautioned that economic uncertainty and more value-conscious consumers could weigh on growth this year.
The beauty retailer said shoppers remained resilient throughout 2025 but increasingly focused on affordability and making more selective spending choices.
President and CEO Kecia Steelman told analysts that the company expects those trends to persist into 2026.
“We expect these themes to continue into fiscal 2026, though we are increasingly mindful of rising global conflicts that could impact economic conditions,” Steelman said during the earnings call.
“We are optimistic about the opportunities ahead while remaining cautious as we navigate an environment with ongoing global uncertainty and potential economic volatility.”
Steelman also said the company plans to launch Ulta Beauty on TikTok Shop as part of its digital commerce strategy.
Ulta will continue upgrading its supply chain network during 2026, including expanding automation at existing facilities and beginning construction of a new regional distribution center in the U.S. Northwest later in the year. The facility is intended to increase network capacity and speed up order fulfillment.
“We plan to invest in systems and processes to drive sales and inventory through new merchandising transformation efforts,” Steelman said on the call.
For the quarter ended Jan. 31, Ulta reported net income of $356.67 million, or $8.01 per diluted share, compared with $393.27 million, or $8.46 per share, a year earlier. Analysts had expected earnings of $8.03 per share.
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Net sales rose 11.8% to $3.90 billion, exceeding projections of $3.80 billion. The company attributed the growth largely to higher comparable sales, the acquisition of Space NK and revenue from newly opened stores.
Comparable sales increased 5.8%, driven by a 4.2% rise in average ticket and a 1.6% increase in transactions. Fragrance remained the strongest-performing category during the quarter, delivering double-digit comparable growth.
“The Ulta Beauty team closed the year with momentum, delivering strong fourth quarter and full-year sales and continued market share gains,” Steelman said in the earnings statement.
“Our better-than-planned financial performance reflects our continued focus on serving our guests and consistently delivering great experiences through better execution, compelling newness, more seamless and convenient experiences, and bold new merchandising and marketing strategies.”
For fiscal 2025, Ulta’s net sales climbed 9.7% to $12.4 billion. Comparable sales rose 5.4%, supported by a 3.3% increase in average ticket and a 2.0% gain in transactions.
Looking ahead to fiscal 2026, the retailer expects net sales growth between 6% and 7%. Ulta projects diluted earnings per share of $28.05 to $28.55, while comparable sales are expected to increase between 2.5% and 3.5%.
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