Ulta Beauty Q2 Earnings Call Highlights

Ulta Beauty NASDAQ: ULTA reported second-quarter fiscal 2026 results that included 8.9% net sales growth, 10.1% operating profit growth and a 13.3% increase in diluted earnings per share, prompting the beauty retailer to raise its full-year sales and earnings outlook.

Chief Executive Officer Kecia Steelman said the company generated 3.8% comparable sales growth during the quarter, increased active loyalty-program members by 3% and saw higher average spending per member. Ulta’s loyalty program reached about 47 million active members.

“Our sales outpaced the U.S. beauty market in a dynamic environment,” Steelman said, adding that the company gained share in prestige beauty while maintaining flat share in mass beauty, according to Circana.

Net sales rose to $3 billion from $2.8 billion a year earlier. Excluding the impact of Space NK, the U.K. and Ireland beauty retailer Ulta acquired, total sales increased in the mid-single-digit range, Chief Financial Officer Chris DelOrefice said.

Comparable sales growth was driven by average ticket, largely reflecting category-mix shifts, while transactions were roughly flat from the prior year. E-commerce posted high-teens sales growth, marking Ulta’s sixth consecutive quarter of double-digit digital growth, while comparable-store sales increased modestly. Ulta opened 13 net new U.S. stores and one new Space NK location during the quarter. More than half of e-commerce orders were fulfilled through its network of more than 1,500 store locations.

Gross margin was 39.1% of sales, compared with 39.2% a year earlier, primarily due to the Space NK business mix. SG&A expense increased 8.2% to $803 million, though it declined to 26.4% of sales from 26.6% a year earlier. Operating profit rose to $380 million, with operating margin improving to 12.5% from 12.4%. Net income increased 8.1% to $282 million. Diluted earnings per share rose to $6.55.

DelOrefice said gross-margin management benefited from lower shrink, supply-chain productivity and preserved merchandise margin, partly offsetting channel-mix effects, higher fuel costs and slower growth in other revenue.

Fragrance was Ulta’s strongest category, producing high-teens comparable sales growth. Management cited Mother’s Day and Father’s Day campaigns, new launches and continued strength in luxury brands including Prada, Carolina Herrera and YSL. The company also launched fragrances from Drake’s Better World Fragrance House, Khloé Kardashian, Megan Thee Stallion and Viktor&Rolf.

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