--- title: "Ulta Beauty Earnings Call Shows Confident Growth Outlook" type: "News" locale: "en" url: "https://longbridge.com/en/news/298082003.md" description: "Ulta Beauty reported strong Q2 results with net sales up 8.9% to $3.0 billion and diluted EPS rising 13.3% to $6.55. Management raised fiscal 2026 guidance, anticipating mid-single-digit sales growth and low-teens EPS expansion. The company expanded its share repurchase plan to $1.8 billion, driven by robust e-commerce growth, loyalty program expansion, and strength in fragrance and K-Beauty segments. Despite minor softness in mass makeup and skin care, Ulta emphasized operational efficiencies, AI-driven improvements, and disciplined inventory management to maintain profitability." datetime: "2026-09-05T00:03:08.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/298082003.md) - [en](https://longbridge.com/en/news/298082003.md) - [zh-HK](https://longbridge.com/zh-HK/news/298082003.md) generator: "portal-rs" --- # Ulta Beauty Earnings Call Shows Confident Growth Outlook Ulta Beauty ((ULTA)) has held its Q2 earnings call. Read on for the main highlights of the call. Ulta Beauty’s latest earnings call struck an upbeat tone, with management emphasizing strong sales growth, expanding profits and rising earnings per share. Executives acknowledged pockets of softness and a slightly more promotional market, but framed these headwinds as manageable, underscoring confidence through raised guidance and ongoing investments in digital, loyalty and productivity. ## Strong Revenue, Profit and EPS Upside Ulta reported net sales up 8.9% to $3.0 billion, with comparable sales rising 3.8%, signaling healthy demand across the chain. Operating profit grew 10.1% to $380 million, boosting operating margin to 12.5%, while net income climbed 8.1% and diluted EPS jumped 13.3% to $6.55, highlighting effective cost control and mix management. ## Upgraded Outlook and Aggressive Buybacks Management raised fiscal 2026 guidance, now calling for mid‑single‑digit sales growth and low‑teens EPS expansion, pointing to confidence in Ulta’s business model. The board also expanded the share repurchase plan to $1.8 billion this year, with $236 million bought in the quarter and $791 million year‑to‑date, leaving roughly $1.0 billion still authorized. ## E‑Commerce Strength and Store‑Linked Fulfillment Digital channels continued to power growth, with e‑commerce posting its sixth straight quarter of double‑digit sales gains and high‑teens comp growth. More than 60% of online sales now flow through Ulta’s app, and over half of web orders are fulfilled via stores, which leverages the 1,500‑plus locations to speed delivery and improve efficiency. ## Loyalty Gains and Social Commerce Momentum Ulta’s loyalty program expanded about 3% to roughly 47 million active members, and spending per member increased, reinforcing the brand’s stickiness. On social platforms, a TikTok Shop push generated more than 100 million impressions, supported by the launch of 15 new brands and record levels of earned media value and unaided brand awareness. ## Category Power in Fragrance, Hair, K‑Beauty, Wellness Fragrance stood out as Ulta’s star performer, delivering high‑teen comparable sales growth and solidly outpacing other segments. Hair care posted high single‑digit comp gains, while K‑Beauty and wellness both grew double digits, helped by exclusive offerings and strong demand for nutrition, supplements and self‑care products. ## Marketplace Scale and UB Media Growth Ulta’s marketplace business expanded to more than 450 brands and over 12,000 SKUs, helping attract new and lapsed customers through broader choice. UB Media, the company’s advertising platform, delivered double‑digit year‑over‑year growth, aided by new products such as connected TV, and contributed incremental revenue and margin benefits. ## Capex Discipline and Leaner Inventory Per Store Capital spending totaled $81 million in the quarter, focused mainly on new and existing stores plus technology initiatives that support future growth. Inventory remained flat at $2.4 billion overall, but inventory per store fell 4.1%, indicating tighter inventory management and reduced risk of markdowns as Ulta optimizes its footprint. ## Operational Efficiencies and AI‑Driven Improvements Management highlighted improvements across the supply chain and shrink reductions, which helped protect profitability despite cost pressures. AI investments, including enhancements to Ulta’s site agent and integrations with major AI platforms, were cited as drivers of better traffic and conversion, supporting merchandise margin resiliency. ## Soft Spots in Mass Makeup and Skin/Body While overall makeup comps were roughly flat, mass makeup declined in the low single‑digit range as the company lapped strong innovation from last year. Skin care and body care saw modest declines, with body care facing tough comparisons against prior‑year assortment expansions, signaling more normalized demand in these categories. ## Minor Gross Margin Drag from Business Mix Gross margin edged down slightly to 39.1% of sales from 39.2% a year ago, reflecting mix changes tied to the Space NK acquisition. Management framed the impact as modest and manageable, suggesting that broader margin discipline and efficiency gains should offset this drag over time. ## SG&A Up on Acquisitions and Marketing Spend Selling, general and administrative expenses rose 8.2% to $803 million, largely due to integrating Space NK and higher marketing outlays to support growth initiatives. Even with these investments, SG&A as a percentage of sales actually decreased by 20 basis points to 26.4%, underscoring operating leverage. ## More Promotions Amid Value‑Focused Consumers Executives noted a modestly more promotional environment and Ulta’s selective participation in events such as major online shopping days. With consumers increasingly focused on value and the macro backdrop uncertain, management expects ongoing tradeoffs between promotional activity and margin, but remains intent on protecting profitability. ## Higher Leverage and Interest from Buyback Funding Ulta tapped its revolving credit facility to help fund the robust share repurchase program, introducing a small but notable interest burden. Interest expense was $4 million in the quarter and is forecast at $14 million to $16 million for fiscal 2026, signaling a measured increase in leverage to enhance returns to shareholders. ## Slower Growth in Other Revenue Streams Other revenue grew about 2% to $54 million, lagging the pace of core merchandise categories and e‑commerce. While this line remains a smaller contributor to overall performance, the slower growth indicates that Ulta’s near‑term upside is more heavily driven by product sales and digital engagement. ## Guidance Signals Confidence Despite Macro Caution Looking ahead, Ulta now projects full‑year net sales growth of 6.7% to 7.2% and comparable sales up 3.2% to 3.7%, with operating profits rising around high‑single digits. Diluted EPS is expected between $28.70 and $29.00, implying low‑teens growth, with gross margin roughly flat, SG&A growing slower than sales, modest interest expense and $1.8 billion in planned share repurchases. Ulta Beauty’s earnings call framed the company as a resilient growth story, balancing top‑line momentum with disciplined margin management and shareholder‑friendly capital allocation. While certain beauty segments and the promotional backdrop pose challenges, sustained digital strength, loyalty expansion and category wins underpin management’s raised outlook, keeping investors focused on continued EPS growth. ### Related Stocks - [ULTA.US](https://longbridge.com/en/quote/ULTA.US.md) ## Related News & Research - [Telsey Advisory Reaffirms Their Buy Rating on Ulta Beauty (ULTA)](https://longbridge.com/en/news/299061060.md) - [Ulta Beauty in charts: Comparable sales slide to 3.8%](https://longbridge.com/en/news/297231207.md) - [Where the AI trade goes from here as apocalyptic warnings hit a fever pitch](https://longbridge.com/en/news/298953226.md) - [DA Davidson Reaffirms "Buy" Rating for Ulta Beauty (NASDAQ:ULTA)](https://longbridge.com/en/news/298944411.md) - [Ulta Beauty Sees Resilient Demand, Eyes Fragrance, Wellness Growth After Target Exit](https://longbridge.com/en/news/298839639.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**