TLDR
- Ulta Beauty exceeded Q4 revenue projections with $3.90B versus the $3.80B consensus, though earnings per share of $8.01 fell short of the $8.03 forecast.
- Fourth-quarter net sales increased 11.8% compared to the prior year, supported by a 5.8% rise in comparable sales.
- The company’s fiscal 2026 EPS outlook of $28.05–$28.55 trailed analyst projections of $28.40–$28.57.
- SG&A expenses surged 23% to reach $1 billion, fueled by increased corporate investments and marketing expenditures.
- Raymond James maintained its Strong Buy stance, viewing potential weakness as an attractive entry point.
Ulta Beauty (ULTA) delivered a split fourth-quarter performance on Thursday, surpassing revenue expectations while falling short on earnings — but it was the company’s cautious fiscal 2026 forecast that triggered an approximate 8% decline in after-hours trading.
For the period concluding January 31, the beauty retailer generated revenue of $3.90 billion, exceeding the Street’s $3.80 billion projection. However, earnings per share of $8.01 narrowly missed the anticipated $8.03.
Comparable store sales advanced 5.8% during the quarter. This improvement stemmed from a 4.2% uptick in average transaction value combined with a 1.6% gain in customer traffic.
Net sales expanded 11.8% on a year-over-year basis. The acceleration reflected robust comparable sales performance, the Space NK acquisition, and revenue from newly opened locations.
For the complete fiscal 2025 period, Ulta recorded net sales of $12.4 billion, representing a 9.7% jump versus the previous year.
Guidance Disappoints
The market’s negative reaction centered on forward-looking projections. For fiscal 2026, Ulta forecasted net sales expansion of 6% to 7%, alongside comparable sales growth of 2.5% to 3.5%.
Regarding profitability, the company outlined an EPS range of $28.05 to $28.55 for fiscal 2026. The $28.30 midpoint trailed analyst consensus estimates hovering around $28.40 to $28.57.
Raymond James analyst Olivia Tong acknowledged the guidance “captured consensus expectations,” while observing that buy-side forecasts had been more optimistic. She also highlighted elevated spending levels as a contributor to the after-hours pressure.
Tong reaffirmed her Strong Buy recommendation, characterizing any additional weakness as “a buying opportunity.”
Morgan Stanley’s Simeon Gutman suggested that near-term gains for Ulta hinge on the retailer’s capacity to “consistently sustain comp outperformance and provide clearer visibility on disciplined cost management.”
Costs Rise
Gross profit climbed 11.2% to $1.5 billion, while gross margin contracted modestly to 38.1% from 38.2% in the year-ago period. The company cited an unfavorable product mix and elevated store expenses, partially counterbalanced by reduced shrinkage and supply chain improvements.
Selling, general and administrative costs jumped 23% to $1 billion. This escalation reflected higher corporate overhead associated with strategic initiatives, expanded advertising investments, and elevated incentive-based compensation.
CEO Kecia Steelman credited execution and enhanced merchandising approaches as catalysts behind the quarter’s performance. She emphasized the organization’s commitment to elevating customer experiences through “compelling newness” and “more seamless and convenient” shopping options.
This marked the inaugural earnings release since Christopher DelOrefice assumed the CFO role in early December.
Oppenheimer analysts had anticipated “solid” fourth-quarter results heading into the announcement, and Ulta’s top-line performance met those expectations. The stock’s after-hours weakness appears directly tied to investor uncertainty about whether the 2026 guidance represents conservative planning or signals an authentic deceleration in momentum.
