Skip to content
    ULTA
    Earnings call· Jan 2026(Q4 FY26)

    Ulta Beauty Q4 FY26 earnings call ULTA

    Mar 12, 2026 Source

    Executive summary

    Ulta Beauty Q4 FY26 — Strong Performance and Strategic Investments Drive Growth

    Ulta Beauty concluded FY26 with strong Q4 results, exceeding financial targets through strategic investments in its Unleashed strategy. The company is focused on leveraging these investments to drive sustainable profitable growth and market share expansion in FY27, while navigating a competitive beauty landscape and potential macro uncertainties. Management expects a normalized pricing environment and continued consumer resilience in the beauty category.

    Highlights

    5

    • Full year FY26 net sales grew nearly 10% to $12.4 billion.

    • Full year FY26 diluted EPS of $25.64, exceeding previously provided guidance.

    • Q4 FY26 net sales increased 11.8% to $3.9 billion.

    • Q4 FY26 comparable sales increased 5.8%, driven by a 4.2% increase in average ticket and a 1.6% increase in transactions.

    • Loyalty program grew 5% to a record 46.7 million active members in FY26.

    Concerns

    4

    • Q4 FY26 gross margin decreased 10 basis points to 38.1% of sales, primarily due to channel mix and deleverage of store fixed costs.

    • Q4 FY26 SG&A increased 23% to $1 billion, driven by higher incentive compensation and the impact of Space NK.

    • Q4 FY26 SG&A as a percentage of sales increased 230 basis points to 25.7%.

    • Q4 FY26 operating profit was 12.2% of sales.

    Guidance & targets

    12
    CategoryTargetConfidence
    Net sales growth
    6% to 7% increase
    high materiality
    High
    Net sales
    $13.1 billion and $13.2 billion
    high materiality
    High
    Comparable sales growth
    2.5% and 3.5%
    high materiality
    High
    Operating profit growth
    6% and 9%
    high materiality
    High
    Diluted EPS
    $28.05 and $28.55 per share
    high materiality
    High
    Net new company-operated stores
    50 to 60
    medium materiality
    High
    Gross margin
    Approximately flat
    high materiality
    Medium
    SG&A growth
    In line with to slightly below net sales growth
    high materiality
    High
    Capital expenditures
    $400 million and $450 million
    medium materiality
    High
    Share repurchases
    Approximately $1 billion
    high materiality
    High
    Beauty category growth
    2% to 4% range
    medium materiality
    Medium
    Assumed tax rate
    24.2% and 24.4%
    low materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Skin care and wellness
    Driven by prestige skincare and wellness. K-Beauty brands medicube, ANUA, and Peach & Lily, and new brands DRMTLGY and Personal Day drove strong guest engagement. Highly giftable launches from Therabody, Nodpod, and Saje delivered strong growth in wellness.
    Sales as % of total: 24%
    		—mid-single-digit comp growth——
    Makeup
    Decreased to 35% of sales primarily reflecting the impact of Space NK, which has a higher mix of skin care sales. Market share was gained, supported by positive comps in both mass and prestige makeup. Mass makeup growth was driven by newness from L'Oreal, Morphe, and Ulta Beauty Collection, while Prestige Beauty benefited from newness from Kylie Cosmetics and MAC.
    Sales as % of total: 35%
    		—low single-digit growth——
    Fragrance
    Strongest performing category again this quarter, fueled by newness from established brands (YSL, Prada) and exclusive brands (NOYZ, Snif, Summer Mink by Drake), coupled with strong performance of holiday gift sets. New co-branded TV campaigns, expanded in-store space, and better in-stocks positioned Ulta Beauty as the fragrance destination.
    		—double-digit comp growth——
    Hair care
    Delivered its best comp performance this year, primarily driven by strong performance from new brands including amika and Moroccanoil, and exclusive Cecred, which continued to build sales momentum after its April launch.
    		—high single-digit comp growth——
    Services
    Driven by increases in salon and specialty services, including ear piercing and makeup services.
    		—mid-single-digit comp growth——

    Operational metrics

    23
    Net sales
    $3.9 billionincreased 11.8%
    Q4 FY26

    Compared to $3.5 billion last year.

    Net sales
    $12.4 billionincreased 9.7%
    FY26

    Increased $1.1 billion from prior year.

    Operating income
    $1.5 billion
    FY26

    Delivered ahead of plans.

    Diluted EPS
    $25.64increased 1.2%
    FY26

    Above previously provided guidance.

    E-commerce sales growth
    mid-teen growth
    Q4 FY26

    Contributed to comparable sales growth.

    Comp stores sales growth
    low single-digit growth
    Q4 FY26

    Contributed to comparable sales growth.

    Operating profit
    $477 million
    Q4 FY26

    Reported for the quarter.

    Diluted EPS
    $8.01
    Q4 FY26

    Per share for the quarter.

    Cash and short-term investments
    $494 million
    end FY26

    Balance at year-end.

    Short-term debt
    $62 million
    end FY26

    Primarily related to Space NK.

    Capital expenditures
    $435 million
    FY26

    Supported reinvestment.

    Active app users growth
    15%YoY
    FY26

    Drove significant engagement.

    Online sales via app
    60%
    FY26

    Approximately 60% of online sales were made through the app.

    New brands launched
    >100
    FY26

    Included Moroccanoil, amika, medicube, isima, Drake's Better World Fragrance, and TIRTIR.

    Marketplace brands
    >200
    FY26

    Curated online assortment.

    Marketplace SKUs
    >5,000
    FY26

    Curated online assortment.

    Wellness brands added (core assortment)
    ~30
    FY26

    Added as part of the wellness initiative.

    Wellness brands added (marketplace assortment)
    ~40
    FY26

    Added as part of the wellness initiative.

    Wellness store presence
    >400
    FY26

    Expanded store presence for wellness products.

    New store formats (percentage of stores)
    25%
    FY26

    Percentage of stores with the new smaller format in the past year.

    New store formats (percentage of stores)
    15%
    FY27

    Expected percentage of stores to be the small store format in FY27.

    SG&A growth ex-incentive comp and Space NK
    17%
    Q4 FY26

    SG&A growth for the quarter, excluding specific impacts.

    SG&A growth ex-incentive comp and Space NK
    13%
    FY26

    SG&A growth for the full year, excluding specific impacts.

    Industry KPIs

    9
    MetricValueDetails
    Sg a OPEX ratio25.7%%
    Comparable sales5.8%%
    Store count growth1,505 Ulta Beauty stores; 86 Space NK storesstores
    Gross margin drivers38.1%%
    Active customers nspac46.7 millionmembers
    Share buyback capital return$890 millionUSD
    Inventory position markdown risk$2.2 billionUSD
    Same sku like for like inflation—
    Distribution supply chain cost economics—

    Product announcements

    3
    ProductTypeDetails
    Ulta Beauty on TikTok Shoplaunch
    Rare Beauty by Selena Gomezlaunch
    Destin De Balmain (new scent)launch

    Deals & partnerships

    4
    Space NKAcquisition of a luxury beauty retailer

    Space NK operates more than 80 stores in the U.K. and Ireland. Its impact on Q4 FY26 sales mix was noted, having a higher mix of skin care sales.

    Grupo AxoInternational expansion into Mexico

    Opened nine stores in Mexico through this joint venture partner.

    AlshayaInternational expansion into the Middle East

    Opened two stores in the Middle East through this franchise partner.

    TikTokExpanded strategic integration for social commerce

    Launching Ulta Beauty on TikTok Shop next week, allowing guests to purchase directly from content. This leverages social and AI-enhanced commerce platforms.

    Risks & headwinds

    5
    Rising global conflicts and economic conditionsFY27

    Could impact economic conditions

    Mitigation: Staying focused on controlling internal factors; beauty category has shown resilience to macro pressures.

    Competitive beauty landscapeFY27

    Competitive and dynamic environment

    Mitigation: No plans to accelerate promotions; leveraging strong loyalty base, personalization, and omnichannel activation; focusing on brand-building capabilities and exclusivity.

    Consumer discernment in spending decisionsFY27

    Strong focus on value and affordability, increasing discernment in spending decisions

    Mitigation: Strategic advantage of carrying low-to-lux price points; ability to flex as the consumer flexes; leveraging AI for strategic business decisions.

    Challenging comparable sales comparisonsH2 FY27

    Increasingly challenging comps as we move through the year

    Mitigation: Plan built to continue taking market share regardless of economic environment; focus on strong execution and innovation.

    SG&A growth in first half of FY27H1 FY27

    Double-digit SG&A growth

    Mitigation: Due to Space NK acquisition and annualization of investments; expected to normalize in H2 FY27 with productivity programs and disciplined investment prioritization.

    What to watch in Q1 FY27

    5

    Comp Sales Growth

    Q1 FY27
    Current5.8%
    Target2.5% to 3.5%

    Why it matters

    To assess if the company can achieve its FY27 guidance, especially with easier comparable sales comparisons in the first half of the year.

    For the year, we anticipate net sales will increase between 6% to 7% with comp sales growth between 2.5% and 3.5%.

    Q&A highlights

    6

    Can you discuss the dynamics of the 4.2% average ticket increase versus decelerating transactions, and what you're seeing from brands regarding pricing for FY27?

    Kecia Steelman stated that pricing increases typically impact 10% to 15% of the assortment annually, and the company is planning for a normalized pricing environment in FY27, with no unusual trends observed.

    “We see pricing increases every year. They typically impact about 10% to 15% of the overall assortment. And we're really planning for normalized pricing environment in fiscal 2026.”

    asked by Krisztina Katai · answered by Kecia Steelman

    2 min read6 chapters

    Detailed Narrative

    01

    FY26 Strategic Progress and Achievements

    Ulta Beauty's 'Unleashed' strategy in FY26 focused on driving core business growth, scaling new businesses, and realigning its foundation for the future. The company achieved significant progress, including enhancing the omnichannel guest experience, modernizing its assortment with over 100 new brands, and expanding internationally. These efforts led to stronger-than-expected financial performance and market share gains.

    02

    International Expansion and New Growth Channels

    The company expanded its international footprint with nearly 100 stores across five countries, including the acquisition of Space NK in the UK and Ireland, nine new stores in Mexico via a joint venture with Grupo Axo, and two stores in the Middle East through a franchise partner, Alshaya. Additionally, Ulta launched a curated online Marketplace with over 200 brands and 5,000 SKUs, and expanded its wellness initiative into over 400 stores.

    03

    Digital and AI-Enhanced Commerce Initiatives

    Digital upgrades introduced guest-friendly features like 'replenish and save' and 'wish list,' alongside expanded convenience through 'split cart.' AI-powered personalization and an automated marketing engine delivered relevant content, while AI capabilities were also implemented for guest services and an order management system to optimize fulfillment and reduce out-of-stocks. An expanded strategic integration with TikTok will launch Ulta Beauty on TikTok Shop next week.

    04

    Supply Chain Transformation and Operational Productivity

    Ulta Beauty plans to continue its supply chain transformation efforts in FY27 with increased automation in existing facilities and the construction of a new regional distribution center in the Northwest. These initiatives aim to expand network capacity, increase fulfillment speed, and drive further operational productivity. Investments in systems and processes will also target sales and inventory productivity.

    05

    Consumer and Beauty Category Outlook

    Management observed continued consumer resilience, a strong focus on value, and increasing discernment in spending decisions throughout FY26, themes expected to persist into FY27. The beauty category is anticipated to grow in the 2% to 4% range, in line with historical averages, assuming no increased broader macro disruption🌐. Ulta remains mindful of rising global conflicts and potential economic volatility.

    06

    Culture and Brand Reinvigoration

    Ulta Beauty reignited its culture and reinvigorated its brand through decisive organizational changes, adopting a winning mindset, and launching a new marketing brand equity campaign, 'Beauty happens here.' This included engaging in cultural activations like Lollapalooza and Coachella, and leveraging new AI capabilities to deliver relevance and expertise across the guest beauty journey.

    AI-generated summary of the company’s earnings call. Not investment advice.