Ulta Beauty, Inc.

Ulta Beauty reported first-quarter fiscal 2026 net sales of $3.2 billion, up 11.1% from $2.8 billion last year. Comparable sales increased 5.3%, driven by a 3.7% increase in average ticket and a 1.6% increase in transactions. Gross margin improved 100 basis points to 40.1% of sales. Operating profit increased 11.6% to $448 million, and diluted EPS rose 15.5% to $7.74. Net income increased 10.8% to $340 million. For the full year, the company maintained net sales growth guidance of 6% to 7% and comp growth guidance of 2.5% to 3.5%, raised operating profit growth guidance to 6.5% to 9%, kept gross margin guidance roughly flat with operating margin expected flat to up 20 basis points, and increased EPS guidance to $28.36 to $28.80. The company also raised its fiscal 2026 stock buyback target from $1 billion to $1.5 billion.

Kecia Steelman said Ulta entered fiscal 2026 focused on profitable growth, financial discipline, and execution of the Ulta Beauty Unleashed strategy. She emphasized that the core U.S. business remains strong, new businesses are gaining traction, and the company is positioning itself to deliver consistent double-digit earnings growth. Her tone was confident but measured, with repeated references to macro uncertainty and a focus on controllable factors such as assortment, loyalty, personalization, AI, and store/digital execution.

Chris DelOrefice highlighted that Q1 profitability benefited from strong revenue growth and gross margin expansion, with shrink and merchandise margin improving results. He cited SG&A up 14.6% to $815 million, operating profit up 11.6% to $448 million, cash and short-term investments of $221 million, short-term debt of $145 million, capital expenditures of $58 million, and $555 million of stock repurchases in the quarter. He said full-year gross margin is still expected to be roughly flat, SG&A to grow in line to slightly below sales, operating margin to be flat to up 20 basis points, and EPS growth to be double digits, helped by the higher buyback target.

Analysts focused on whether Q1 strength and rising profit outlooks implied easing pressure later in the year, and management said the year is playing out as expected with a planned step-down in SG&A growth and balanced first-half/second-half profit trends. They also pressed on TikTok Shop, where Kecia said the focus is not near-term cannibalized sales but guest acquisition, brand discovery, and halo effects for stores and e-commerce. On competition and traffic, management said the plan assumes continued share gains despite a more competitive category, with exclusivity, brand building, and personalization seen as key differentiators.