TLDR
- Ulta Beauty surpassed Q4 revenue expectations with $3.90B compared to the $3.80B forecast, while EPS of $8.01 fell slightly short of the $8.03 projection.
- Fourth-quarter net sales increased 11.8% year over year, supported by comparable sales expansion of 5.8%.
- Fiscal 2026 EPS outlook of $28.05–$28.55 trailed analyst projections ranging from $28.40–$28.57.
- Selling, general and administrative costs surged 23% to reach $1 billion, reflecting increased corporate overhead and advertising investments.
- Raymond James maintained a Strong Buy rating, suggesting additional weakness presents an attractive entry point.
Ulta Beauty (ULTA) delivered a fourth-quarter earnings report on Thursday that showcased strength on the top line while falling marginally short on per-share earnings — with the company’s conservative fiscal 2026 projections triggering an approximately 8% decline in after-hours trading.
The beauty retailer reported $3.90 billion in revenue for the quarter ending January 31, surpassing Wall Street’s $3.80 billion estimate. Earnings per share reached $8.01, slightly below the analyst consensus of $8.03.
Comparable sales expanded 5.8% during the period, supported by a 4.2% increase in average ticket size and a 1.6% gain in transaction volume.
Net sales advanced 11.8% on a year-over-year basis. The company attributed this growth to stronger comparable sales performance, the Space NK acquisition, and revenue from newly opened locations.
For the complete fiscal 2025 year, Ulta achieved net sales of $12.4 billion, representing a 9.7% increase over the previous year.
Forward Outlook Falls Short
The primary catalyst for the stock decline came from management’s forward projections. For fiscal 2026, Ulta forecasts net sales growth between 6% and 7%, with comparable sales expected to increase 2.5% to 3.5%.
Regarding earnings, the company projected fiscal 2026 EPS in the range of $28.05 to $28.55. The $28.30 midpoint landed below analyst consensus estimates hovering around $28.40 to $28.57.
Raymond James analyst Olivia Tong indicated the guidance “captured consensus expectations,” while acknowledging that buy-side forecasts had been running higher. She identified elevated spending during the quarter as a contributing factor to the after-hours stock movement.
Tong maintained her Strong Buy rating on shares, characterizing any additional weakness as “a buying opportunity.”
Morgan Stanley’s Simeon Gutman explained that near-term upside potential for Ulta hinges on the company’s capacity to “consistently sustain comp outperformance and provide clearer visibility on disciplined cost management.”
Expense Growth Accelerates
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. Management pointed to an unfavorable sales mix and elevated store-related expenses as headwinds, partially counterbalanced by reduced inventory shrink and supply chain improvements.
Selling, general and administrative expenses expanded 23% to reach $1 billion. This increase stemmed from higher corporate overhead associated with strategic initiatives, expanded advertising expenditures, and increased incentive compensation.
CEO Kecia Steelman highlighted execution and fresh merchandising approaches as key contributors to the quarter’s performance. She emphasized the company’s commitment to enhancing customer experiences through “compelling newness” and “more seamless and convenient” shopping options.
This marked the first earnings release since Christopher DelOrefice assumed the CFO role in early December.
Oppenheimer analysts had anticipated “solid” Q4 results heading into the report, and Ulta delivered on revenue expectations. The stock’s after-hours weakness appears tied directly to questions about whether the 2026 guidance represents cautious planning or signals a genuine deceleration in growth momentum.
