Ulta Beauty, Inc.

Second-quarter net sales increased 8.9% to $3 billion versus $2.8 billion a year ago. Comparable sales rose 3.8%, driven by average ticket with transactions roughly flat. Gross margin was 39.1% of sales, down slightly from 39.2% last year. SG&A increased 8.2% to $803 million, operating profit rose 10.1% to $380 million, operating margin was 12.5% versus 12.4%, net income increased 8.1% to $282 million, and diluted EPS increased 13.3% to $6.55. For the full year, Ulta now expects net sales growth of 6.7% to 7.2%, comp growth of 3.2% to 3.7%, operating profit growth of 8.3% to 9.3%, and diluted EPS of $28.70 to $29. Management said year-over-year EPS growth implied by that range is 11.9% to 13.1%, and it now expects modest operating margin improvement up to 20 basis points. For the second half, it expects net sales growth of 4% to 5%, comp growth of 2% to 3%, operating profit growth of 6% to 8%, and EPS growth of 9% to 12%. Gross margin for the year is still expected to be roughly flat, while SG&A is expected to grow less than revenue. The company ended the quarter with $213 million in cash and short-term investments, $340 million in short-term debt, and year-to-date stock repurchases of $791 million, with $1 billion remaining under the current authorization.

Kecia Steelman framed the quarter as evidence that Ulta’s model is still resonating, pointing to disciplined execution, strong guest engagement, and share gains in a dynamic environment. She emphasized brand building in fragrance, K-Beauty, wellness, marketplace, and TikTok Shop as key growth vectors, while also highlighting personalization, loyalty, and AI as long-term differentiators. Her tone was confident but measured, repeatedly noting that the company is staying disciplined and flexible as consumers remain value-conscious.

Chris DelOrefice focused on profitable growth and capital discipline. He cited 8.9% sales growth to $3 billion, 39.1% gross margin, 12.5% operating margin, and $6.55 EPS, noting that gross margin was managed well despite competitive pressure and Space NK mix. He also pointed to $81 million of capex, $213 million in cash and short-term investments, $340 million in short-term debt, and $236 million of buybacks in the quarter, with the full-year repurchase target increased to $1.8 billion. He said the outlook assumes roughly flat gross margin for the year, SG&A growing slower than revenue, and interest expense of $14 million to $16 million.

Analysts focused on makeup weakness, the promotional environment, and whether Q2 strength represented an acceleration. Management said mass makeup was hurt mainly by a lack of newness versus last year, but they see potential green shoots in the back half from trend shifts and new launches. On promotions, management said the environment got more promotional, but Ulta was selective and strategic, using events like Big Summer Beauty Sale, Prime Days, and holiday flexibility to protect share while preserving profitability. They also said there was no notable trade-down behavior, and that Space NK, marketplace, and wellness are still early but already generating learnings and growth.