Beauty brand Ulta has beaten Street expectations for the second quarter running. (Brian Cassella/Chicago Tribune/Tribune News Service via Getty Images)
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Ulta Beauty lifted its full-year sales guidance yesterday after outperforming forecasts for the third quarter, buoyed by robust demand for fragrances, skincare and other discretionary treats.
The retailer now expects annual revenue of roughly $12.3 billion, up from its previous range of $12 billion to $12.1 billion and comfortably above last year’s $11.3 billion. Earnings are projected to come in between $25.20 and $25.50 a share, an upgrade from earlier estimates.
The company is also more optimistic about comparable sales, which include online revenue and stores trading for at least 14 months. It anticipates growth of 4.4% to 4.7%, compared with a prior outlook of 2.5% to 3.5%.
This marks the second straight quarter in which Ulta has raised expectations, sending its shares up initially before dropping off again, yet still up over 24% in the year to date.
Chief executive Kecia Steelman attributed the momentum to a steady flow of new products, sharper in-store and digital experiences, plus more assertive marketing, all of which she said have resonated with customers.
“Our third quarter results exceeded our expectations, reflecting the steady progress and momentum our team is building as we execute our Ulta ‘Beauty Unleashed’ strategy. Exciting assortment newness, improved in-store and digital experiences, and bold marketing efforts are resonating with our guests and drove strong sales results, market share gains, and growth across all categories and channels, with notable strength in ecommerce,” said Kecia Steelman, Ulta Beauty President and CEO.
She added that early Black Friday and Cyber Monday trading had been encouraging, even as hard pressed households keep a closer eye on spending. According to Steelman, shoppers remain value-conscious but she said that they continue to indulge in affordable luxuries, seasonal staples and gifts.
“As we look ahead to the all-important holiday season, we know many consumers’ wallets are pressured and they are seeking value. We are confident in our plans,” Steelman said.
Ulta Beauty Sales Surge
For the quarter, Ulta reported earnings of $5.14 a share, ahead of the $4.64 analysts expected, on revenue of $2.86 billion, also above forecasts. Sales rose from $2.53 billion in the same period last year, with comparable sales up 6.3%.
Both store and online traffic increased, while customers spent more per visit, lifting average ticket size by 3.8% and transactions by 2.4%.
Net income for the three months to Nov. 1 came in at $230.9 million, level with per-share profits a year earlier but slightly below last year’s overall earnings figure. Steelman said that despite softer consumer sentiment, engagement remained solid, with both mass and prestige products posting mid single-digit gains.
Fragrance led the pack with double-digit growth, fuelled by high-end labels such as Valentino and Dolce & Gabbana as well as more accessible offerings, prompting the retailer to expand fragrance space in a majority of U.S. stores ahead of holiday trading.
Skincare was the second-strongest category, advancing at a high single-digit rate, helped by social-media-driven demand for Korean brands and the fall debut of Fenty Skin Body.
Ulta Beauty Expands Worldwide
International expansion and a new third-party online marketplace have also become central to Ulta’s growth plans. The company’s acquisition of U.K. retailer Space NK has opened a foothold in Europe, while a joint venture in Mexico added seven stores during the quarter and its first Middle Eastern location opened in Kuwait through franchise.
The new marketplace has already brought in more than 120 brands and over 3,500 products, broadening Ulta’s reach into emerging segments such as wellness.
Ulta earlier this year ended its tie-up with Target and during the third quarter the company opened 28 new stores, remodeled 15 and closed one. For the first nine months of fiscal 2025, Ulta Beauty opened 58 new stores, relocated four, remodeled 24 and closed three, meaning it operated 1,500 Ulta Beauty stores totaling 15.6 million-sq.-ft. across the U.S., plus 84 stores in the U.K. and Ireland operated by Space NK.
Higher tariffs have added cost pressures, contributing to brand-led price rises, according to interim finance chief Chris Lialios. Haircare saw mid single-digit growth, though styling tools were hit by price-related softness.
Ulta Beauty has appointed Christopher DelOrefice, currently with medical-technology group Becton Dickinson, as its new CFO, effective Dec. 5.
Source: https://www.forbes.com/sites/markfaithfull/2025/12/05/ulta-beauty-beats-expectations-once-again-ahead-of-holiday-sales/
