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Ulta Beauty Shines with Strong Sales, Raises Full-Year Outlook

Prime Highlights: 

  • Ulta Beauty raised its full-year forecast after reporting stronger-than-expected second-quarter results. 
  • The beauty retailer saw growth across all major categories, with customers spending more both in stores and online. 

Key Facts: 

  • Ulta now projects annual net sales between $12 billion and $12.1 billion, compared to last year’s $11.3 billion. 
  • Comparable sales grew 6.7% year-over-year in the second quarter, beating analyst expectations. 

Key Background: 

Ulta Beauty raised its full-year forecast after strong second-quarter earnings beat Wall Street expectations, with growth across all major categories. The company now predicts sales growth of 2.5% to 3.5% this year, higher than its previous estimate of 1.5%. 

For the quarter ending August 2, Ulta reported revenue of $2.79 billion, topping analyst estimates of $2.67 billion, while net income rose to $260.9 million, or $5.78 per share, compared with $252.6 million, or $5.30 per share, a year earlier. Comparable sales surged 6.7% year-on-year, well above predictions. Customer visits rose by 3.7%, and the average amount spent per purchase went up by 2.9% 

CEO Kecia Steelman highlighted that the outlook reflects both strong performances so far and a cautious approach to how consumer demand may evolve later this year.  

Ulta’s expansion strategy remains a key driver of growth. The company has recently entered the international market by acquiring Space NK, a UK-based beauty retailer. Ulta has already opened its first store in Mexico and is planning to enter the Middle East before the year ends. Simultaneously, Ulta is increasing the number of wellness options, as special wellness stores are present in over 370 stores. 

The retailer will also establish a third-party marketplace in order to expand its products. The company plans to stop its partnership with Target by 2026. Executives noted that the Target venture contributed very little to overall sales. 

Even with rising competition from Sephora, Walmart, and Kohl’s, Ulta continues to grow as consumers focus on beauty and wellness. CEO Kecia Steelman said the beauty category gives people comfort and escape, which keeps customers engaged even during uncertain economic conditions.