#Ulta Beauty Reports Fiscal 2025 Results
Ulta Beauty, Inc. (NASDAQ: ULTA) announced its fiscal 2025 fourth quarter and full-year results on March 12, 2026, posting net sales of $12.4 billion for the year ended January 31, 2026, a 9.7% increase over the prior fiscal year. The company simultaneously issued fiscal 2026 guidance that fell below market expectations, and shares declined following the announcement.
For the fourth quarter alone, net sales rose 11.8% to $3.9 billion compared to the same period a year earlier. The quarterly gain reflected contributions from comparable-store sales growth, sales from new stores and the acquisition of Space NK, a UK and Ireland luxury beauty retailer, completed during fiscal 2025. Full-year comparable sales increased 5.4%, up from 0.7% in fiscal 2024, driven by a 3.3% rise in average transaction value and a 2.0% increase in transaction volume.
#Margins and Expenses
Full-year gross margin improved to 39.1% from 38.8% in the prior year, aided by lower inventory shrinkage and higher merchandise margin. Operating income for the year totaled $1.5 billion, or 12.4% of net sales, compared to 13.9% in fiscal 2024. Selling, general, and administrative expenses rose 17.4% to $3.3 billion, representing 26.6% of net sales, up from 24.9% a year earlier. The company attributed the increase primarily to higher incentive compensation, store payroll and benefits, and spending on what it described as strategic enterprise investments. Diluted earnings per share for the full year were $25.64, a 1.2% increase over the prior year's $25.34.
In the fourth quarter, diluted EPS was $8.01, compared to $8.46 in the same period of fiscal 2024, a decline of approximately 5.3%, as SG&A expenses rose 23.0% year over year.
#Capital Deployment
During fiscal 2025, Ulta Beauty repurchased approximately 2.0 million shares at a total cost of $890.5 million, excluding excise taxes. Capital expenditures totaled $434.8 million, directed toward new stores, remodels, IT systems, and supply chain infrastructure. The company ended the fiscal year with $424.2 million in cash and cash equivalents and $70.0 million in short-term investments, against $62.3 million in short-term debt.
#Fiscal 2026 Outlook
The company issued guidance for fiscal 2026 calling for net sales growth of 6% to 7%, comparable sales growth of 2.5% to 3.5%, and operating income growth of 6% to 9%. Diluted earnings per share are projected in the range of $28.05 to $28.55, implying growth of approximately 9.4% to 11.4% over fiscal 2025. The guidance range was below consensus analyst estimates, contributing to the post-market share price decline.
#TikTok Shop Launch
Separately, Ulta Beauty is scheduled to launch on TikTok Shop on March 17, 2026, a move the company said is intended to extend its digital reach. The launch would make Ulta Beauty the first U.S. specialty beauty retailer to establish a presence on the platform.
#Industry Context
The U.S. specialty beauty retail sector faces ongoing pressure from department store beauty counters, direct-to-consumer brand expansion, and mass-market competitors. Ulta Beauty operates 1,505 domestic stores and, following the Space NK acquisition, 86 company-operated international locations across the UK and Ireland. The company has also pursued growth through a joint venture in Mexico and a franchise arrangement in the Middle East. According to third-party data from Circana cited by the company, Ulta Beauty recorded market share gains in both mass and prestige beauty categories during the fourth quarter.