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    ULTA
    Earnings call· Apr 2026(Q1 FY27)

    Ulta Beauty Q1 FY27 earnings call ULTA

    Jun 2, 2026 Source

    Executive summary

    Ulta Beauty Q1 FY27 — Strong Sales & EPS Growth Driven by Core Business and Strategic Initiatives

    Ulta Beauty delivered strong Q1 FY27 results, driven by robust core U.S. business performance and traction from strategic initiatives like international expansion and marketplace growth. The company is focused on financial discipline and optimizing investments to achieve consistent double-digit earnings growth, while navigating a value-focused consumer environment. Management remains confident in meeting its full-year expectations.

    Highlights

    5

    • Net sales increased 11.1% to $3.2 billion in Q1 FY27.

    • Comparable sales grew 5.3%, driven by a 3.7% increase in average ticket and a 1.6% increase in transactions.

    • Diluted EPS increased 15.5% to $7.74 per share.

    • Gross margin expanded by 100 basis points to 40.1% of sales, primarily due to lower inventory shrink and higher merchandise margin.

    • Ulta Beauty Rewards loyalty program expanded to nearly 47 million members, up 4% year-over-year.

    Concerns

    4

    • Macroeconomic uncertainty and inflationary measures, including rising fuel prices, are making value increasingly important for consumers.

    • Hair tools category declined due to lapping prior year launches and softness in traditional tools.

    • Mass makeup was relatively flat due to limited innovation from some brands.

    • Body care experienced pressure as the company lapped meaningful expansion of key brands last year.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year net sales growth
    6% to 7%
    high materiality
    High
    Full-year comparable sales growth
    2.5% to 3.5%
    high materiality
    High
    Full-year operating profit growth
    6.5% and 9%
    high materiality
    High
    Full-year gross margin
    roughly flat
    medium materiality
    High
    Full-year SG&A growth
    in line to slightly below net sales growth
    medium materiality
    High
    Full-year diluted EPS
    $28.36 and $28.80 per share
    high materiality
    High
    Full-year weighted average share count
    approximately 43 million shares
    medium materiality
    High
    Full-year tax rate
    approximately 24.5%
    medium materiality
    High
    Fiscal 2026 stock buyback target
    $1.5 billion
    high materiality
    High

    Operational metrics

    16
    Other revenue
    $62 millionup $6 million
    Q1 FY27

    Increase in other revenue primarily due to credit card program and marketplace commissions.

    Interest income
    $0.7 million
    Q1 FY27

    Inclusive of the impact from increased share buybacks.

    Effective tax rate
    23.9%decreased 70 basis points
    Q1 FY27

    Decrease primarily due to a one-time income tax benefit from transferable federal tax credits.

    Cash and short-term investments
    $221 million
    Q1 FY27

    Balance at the end of the quarter.

    Short-term debt
    $145 million
    Q1 FY27

    Balance at the end of the quarter.

    Capital expenditures
    $58 million
    Q1 FY27

    Primarily driven by investments in new and existing stores.

    Stock repurchases
    $555 million
    Q1 FY27

    Amount deployed during the quarter, leveraging cash and revolver.

    Operating profit margin
    14.2%
    Q1 FY27

    Operating profit was $448 million.

    Net income
    $340 millionincreased 10.8%
    Q1 FY27

    Reported net income for the quarter.

    Total sales growth excluding Space NK
    high single-digit range
    Q1 FY27

    Total sales growth was 11.1%, with Space NK contributing to the overall growth.

    Loyalty members
    47 millionup 4% year-over-year
    Q1 FY27

    Expanded Ulta Beauty Rewards loyalty program.

    Marketplace brands
    325
    Q1 FY27

    Number of brands offered on the UB Marketplace.

    Marketplace SKUs
    8,000
    Q1 FY27

    Number of SKUs offered across 7 marketplace assortment focus areas.

    In-store events
    40,000+
    Q1 FY27

    Number of in-store events executed with brand partners, including activations and workshops.

    TikTok Shop impressions
    5 million
    Q1 FY27

    Impressions garnered from the first TikTok shoppable live stream at Ulta Beauty World event.

    New brands launched
    20+
    Q1 FY27

    Number of new brands launched during the quarter, including Rare Beauty, Balmain, Bloomeffects, Hairstory, Gruns.

    Industry KPIs

    6
    MetricValueDetails
    Sg a OPEX ratio$815 millionUSD
    Comparable sales5.3%%
    Store count growth16stores
    Gross margin drivers40.1%% of sales
    Inventory position markdown risk$2.4 billionUSD
    Distribution supply chain cost economics—

    Product announcements

    4
    ProductTypeDetails
    TikTok Shoplaunch
    NOYZ Mylk de Parfumlaunch
    Ulta AIlaunch
    Times Square Flagship Storelaunch

    Deals & partnerships

    3
    Uber Eatspartnership

    Expanded same-day delivery options through Uber Eats to improve functionality, expand convenience, and improve the guest experience.

    Klarnapartnership

    New Buy Now, Pay Later options through Klarna to improve functionality, expand convenience, and improve the guest experience.

    Google's Geminipartnership

    Integrating with leading AI platforms like Google's Gemini to enable agentic commerce, leveraging partner strengths to maximize AI opportunity.

    Risks & headwinds

    5
    Macroeconomic uncertainty and inflationary pressuresongoing

    Rising fuel prices

    Mitigation: Leveraging diverse mass-to-luxury assortment, omnichannel accessibility, compelling loyalty program, and targeted promotional capabilities to satisfy guest value needs.

    Competitive categoryongoing

    Others continuing to level up the battle for share

    Mitigation: Focusing on brand building, exclusivity, wellness, and sharpening operational focus with targeted investments to strengthen long-term competitive advantage.

    Decline in hair tools categoryQ1 FY27

    Impact of lapping prior year launches and softness in traditional tools

    Mitigation: Offsetting with growth from innovative and accessible brands like Shark and T3.

    Flat performance in mass makeupQ1 FY27

    Limited innovation from other mass brands

    Mitigation: Offsetting with compelling innovation from brands like Morphe and L'Oreal.

    Pressure in body careQ1 FY27

    Lapping meaningful expansion of key brands last year

    Q&A highlights

    6

    Which categories are showing the greatest return on marketing investments, and where is the visibility for SG&A leverage in the back half of the year?

    Kecia highlighted fragrance, Ignite brands, and 21 Days of Beauty as areas with strong ROI, emphasizing a balanced portfolio and leveraging UB Media for guest engagement. Chris noted strong execution in Q1 across gross margin and SG&A, creating opportunities for operating profit. SG&A growth is expected to step down in the second half due to anniversarying prior investments, with cost optimization helping further.

    “Where we are seeing the investments really paying off is -- one of the strongest categories that we're seeing results in is really fragrance.”

    asked by Adrienne Yih-Tennant · answered by Kecia Steelman

    2 min read6 chapters

    Detailed Narrative

    01

    Core Business Strength & Innovation

    Ulta Beauty achieved 11.1% net sales growth and 5.3% comparable sales growth in Q1 FY27, with broad-based positive contributions across channels and categories. The company gained market share in prestige beauty and maintained it in mass beauty. Key drivers included successful in-store events, e-commerce momentum with expanded delivery and Buy Now, Pay Later options, and the strategic launch of TikTok Shop to engage younger consumers and spotlight exclusive brands.

    02

    Strategic Growth Pillars

    The company is scaling new businesses, including international expansion with two new stores in Mexico and one in Dubai Mall. Its marketplace now offers over 325 brands and 8,000 SKUs, integrating successfully into promotions. The wellness category expanded with new brands and enhanced digital navigation. UB Media launched a YouTube enhanced measurement product, demonstrating higher returns on ad spend for partners like Clinique.

    03

    Operational Efficiency & AI Integration

    Ulta Beauty is advancing its distribution network with a new regional distribution center in Salt Lake City, leveraging automation for improved speed and efficiency. AI is being integrated through an online shopping agent, Ulta AI, for enhanced discovery and personalization, and through partnerships with platforms like Google's Gemini for agentic commerce.

    04

    Customer Engagement & Loyalty

    The Ulta Beauty Rewards loyalty program grew to nearly 47 million members, up 4% year-over-year. The company is utilizing vast first-party data and tech improvements for enhanced personalization, building around customer journeys to maximize sales-driving opportunities and predict replenishment purchases. The Ulta Beauty World event and field leadership conference reinforced culture and execution focus.

    05

    Times Square Flagship Store

    Ulta Beauty announced plans for a new highly experiential flagship store in Times Square, New York, slated to open in late 2027. This location aims to be a vibrant destination integrating technology, entertainment, and a differentiated assortment to deliver immersive guest experiences, drive brand activations, and enhance global brand awareness and loyalty.

    06

    Navigating Macro Environment

    Despite macroeconomic uncertainty🌐, inflationary pressures, and rising fuel prices influencing value-focused consumers, Ulta Beauty operates from a position of strength. The company leverages its diverse mass-to-luxury assortment, omnichannel accessibility, and compelling loyalty program to meet evolving guest needs and maintain agility in the dynamic environment.

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