Ulta Beauty (NASDAQ:ULTA) delivered stronger-than-expected first-quarter results, surpassing analyst forecasts on both earnings and revenue while lifting its full-year profit guidance. The upbeat performance helped support investor sentiment, with shares rising around 1% in premarket trading on Wednesday.
The beauty retailer benefited from solid demand across its product categories and sales channels, alongside contributions from its recent acquisition of Space NK.
Revenue and Earnings Beat Wall Street Forecasts
For the first quarter, Ulta Beauty reported adjusted earnings of $7.74 per share, comfortably ahead of the consensus estimate of $6.87 per share.
Revenue increased 11.1% year-over-year to $3.16 billion, exceeding analyst expectations of $3.11 billion and improving from $2.85 billion recorded in the same period last year.
The results reflected continued consumer demand and effective execution across the company’s retail and digital operations.
Comparable Sales Growth Driven by Higher Spending and Traffic
Comparable sales rose 5.3% during the quarter, supported by gains in both customer spending and transaction volumes.
Average ticket value increased 3.7%, while the number of transactions climbed 1.6%.
Management said the growth was broad-based, spanning all major product categories and sales channels. The integration of Space NK also contributed to overall performance during the period.
Profitability improved as gross margin expanded to 40.1%, compared with 39.1% a year earlier. The increase was primarily attributed to lower inventory shrink levels and stronger merchandise margins.
Commenting on the results, President and Chief Executive Officer Kecia Steelman highlighted the company’s resilience despite broader economic uncertainty.
“Fiscal 2026 is off to a strong start driven by broad-based growth across all channels and major categories,” said Kecia Steelman, president and chief executive officer. “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.”
Company Lifts Full-Year Profit Forecast
Following the strong first-quarter performance, Ulta Beauty raised its adjusted earnings guidance for fiscal 2026.
The company now expects adjusted earnings per share of between $28.36 and $28.80, compared with its previous forecast range of $28.05 to $28.55. The midpoint of the updated outlook matches the current analyst consensus estimate of $28.58 per share.
Management maintained its expectations for net sales growth of 6% to 7% and comparable sales growth of 2.5% to 3.5%.
The company also modestly increased its operating income growth forecast to a range of 6.5% to 9%, up from its prior outlook of 6% to 9%.
Analysts See Progress but Remain Divided
Following the results, Bank of America analysts pointed to improvements in several key areas that investors have been monitoring closely.
“The most important takeaway from 1Q was progress on the key debates: consistent sales, cost discipline, and profitable growth,” analyst Lorraine Hutchinson said in a note.
The firm maintained a positive stance on the stock.
“We reiterate our Buy rating and expect ULTA’s multiple to expand as it builds on 1Q and continues to deliver against its F26 plan,” he added.
Morgan Stanley adopted a more cautious view, suggesting that the stronger-than-expected quarter was not fully reflected in the company’s updated guidance.
The brokerage argued that “limited guidance flow-through from the ~85c EPS beat and tougher Q2-Q4 compares raise questions around the extent of 2H earnings delivery.”
Analysts added: “As a result, early upside case less compelling after today.”
Share Repurchases Continue to Support Shareholders
Ulta Beauty continued returning capital to shareholders during the quarter through its ongoing buyback program.
The company repurchased 958,323 shares for a total of $555.0 million.
Following those purchases, approximately $1.3 billion remains available under the $3.0 billion share repurchase authorization announced in October 2024.
More About Ulta Beauty
Ulta Beauty is one of the largest beauty retailers in the United States, offering cosmetics, skincare, fragrance, haircare and salon services through a nationwide store network and digital platforms. The company combines prestige and mass-market beauty brands under one retail model and continues to expand its omnichannel presence through strategic acquisitions and customer loyalty initiatives.