Ulta Beauty kicked off fiscal 2026 with a stronger-than-expected performance, underscoring the continued resilience of the beauty market despite broader economic uncertainty. First-quarter net sales climbed 11.1% to $3.16 billion, while comparable sales rose 5.3%—nearly double the 2.9% growth recorded in the prior-year period. Growth was broad-based across channels and categories, with gains driven by both higher spending per visit (+3.7% average ticket) and increased shopper traffic (+1.6% transactions).
If that wasn't enough, the company announced a forthcoming Times Square flagship. Slated to open in late 2027, the site is being designed as an immersive destination that blends technology, entertainment, convenience and Ulta's differentiated assortment. The high-profile location is also expected to amplify marketing reach through prominent digital billboard exposure while building brand awareness and customer loyalty among both domestic and international visitors.
The quarter shows Ulta's growth is increasingly coming from high-margin, differentiated businesses rather than store expansion alone. Management is leaning into:
- Exclusive brands
- Social commerce
- Loyalty-driven personalization
- Wellness
- Marketplace
- Retail media
- AI-enabled shopping
Together, these initiatives are helping Ulta capture beauty demand while expanding into new profit pools and customer acquisition channels, particularly among younger consumers.
During an analyst call, Kecia Steelman, president and chief executive officer outlined the retailer's main growth drivers:
1. TikTok Shop and Social Commerce
- Ulta launched its TikTok Shop with a focus on exclusive brands.
- Its first TikTok Live shopping event generated more than 5 million impressions and delivered GMV comparable to top affiliate livestreams.
- The initiative is attracting creators and brand partners while strengthening Ulta's reach with younger consumers.
- Management views TikTok as a critical discovery channel that can drive brand awareness, influence purchasing and support customer acquisition.
2. Exclusive Brands Becoming Bigger Growth Engines
- Ulta is pursuing a strategy to build multiple $100 million-plus exclusive brands.
- Fragrance brand Noyz was highlighted as a standout success:
- Its new "Milk De Parfums" launch created excitement around a fragrance-skincare hybrid concept.
- The brand entered Ulta's Top 20 fragrance brands during the quarter.
- Strong social engagement continues into Q2 through celebrity collaborations.
3. New Brand Launches Driving Traffic and Excitement
- More than 20 new brands launched during the quarter.
- Notable additions included:
- Rare Beauty
- Bloom Effects
- HairStory
- Newness across makeup, fragrance, skin care, hair care and wellness continues to be a major traffic and sales driver.
4. Loyalty Program Scale and Personalization
- Ulta Beauty Rewards grew to nearly 47 million members, up 4% year over year.
- The company is leveraging first-party data to:
- Predict replenishment purchases.
- Improve cart conversion.
- Deliver more personalized marketing and promotions.
5. Marketplace Expansion
- Ulta's marketplace reached:
- More than 325 brands
- More than 8,000 SKUs
- Marketplace products were successfully integrated into major promotions like 21 Days of Beauty, helping drive customer engagement and incremental growth.
6. Wellness Category Momentum
- Wellness continues to be a meaningful growth opportunity.
- Growth is being driven by:
- Expanded assortments.
- New brand launches.
- Dedicated marketing events.
- Improved digital merchandising.
7. International Growth
- Expansion continued through:
- Space NK in the UK and Ireland.
- New stores in Mexico City.
- A flagship opening at Dubai Mall.
8. Retail Media and Advertising Growth
- Ulta's media business (UB Media) is becoming a higher-margin growth engine.
- Enhanced measurement tools are improving advertiser ROI and demonstrating stronger conversion versus other video channels.
9. AI and Digital Investments
- Ulta launched Ulta AI, an online shopping assistant focused on product discovery and personalization.
- The company is also integrating with AI ecosystems such as Google's Gemini to support emerging forms of AI-powered commerce.
“Fiscal 2026 is off to a strong start driven by broad-based growth across all channels and major categories," said Steelman in an earnings release statement. "Our results demonstrate the strengths of our model, focused execution of our talented associates, and the effectiveness of our strategy in an uncertain macroeconomic landscape. I am particularly proud of our teams’ commitment to delighting our guests while also advancing our longer-term strategic initiatives with discipline. Looking ahead, we remain focused on delivering long-term shareholder value through our strategic growth initiatives, continued prudent cost management, and our differentiated guest experience.”
The retailer also demonstrated improving profitability, with gross margin expanding to 40.1% from 39.1% a year ago, reflecting stronger merchandise margins and lower inventory shrink. Operating income rose 11.6% to $448.3 million, while diluted earnings per share jumped 15.5% to $7.74, suggesting beauty consumers remain willing to spend on both prestige and mass offerings when retailers deliver compelling assortments and experiences.
Ulta's inventory increased 12.5%, fueled by new brand launches, investments in growth categories, the acquisition of Space NK, and 70 net new stores added over the past year—indicating confidence in future demand.
While the company maintained its sales outlook for the year, it raised its earnings guidance, signaling expectations for stronger profitability ahead. Taken together, the quarter suggests that beauty remains one of retail's healthiest categories, supported by innovation, premiumization, and consumers' enduring appetite for self-care and personal expression.
