Ulta Beauty — Second Quarter Fiscal 2026 Earnings Summary

Financial Performance

• Net sales increased 8.9% year-over-year to $3,035.7 million for the 13 weeks ended August 1, 2026, compared to $2,788.5 million in the prior year period.
• Comparable sales increased 3.8% year-over-year, down from 6.7% in the prior year period.
• Gross profit increased 8.7% to $1.2 billion; gross profit margin decreased to 39.1% from 39.2% in the prior year period, primarily due to the Space NK business mix.
• Selling, general and administrative (SG&A) expenses increased 8.2% to $802.8 million; SG&A as a percentage of net sales decreased to 26.4% from 26.6%.
• Operating income increased 10.1% to $379.6 million; operating margin was 12.5% compared to 12.4% in the prior year period.
• Diluted earnings per share (EPS) increased 13.3% to $6.55, up from $5.78 in the prior year period.
• Net income for the 13-week period was $282.0 million, compared to $260.9 million in the prior year period.
• Cash and cash equivalents ended the quarter at $158.5 million; short-term investments were $55.0 million.
• Short-term debt was $339.6 million at quarter-end, primarily to support working capital and share repurchases.
• Merchandise inventories, net, were $2.4 billion at quarter-end, remaining flat year-over-year.
• Deferred revenue was $542.4 million at quarter-end, compared to $460.2 million in the prior year period.

Guidance and Future Outlook

• Fiscal 2026 net sales growth guidance was raised to 6.7% to 7.2% from the prior outlook of 6% to 7%.
• Fiscal 2026 comparable sales growth guidance was raised to 3.2% to 3.7% from the prior outlook of 2.5% to 3.5%.
• Fiscal 2026 operating income growth guidance was raised to 8.3% to 9.3% from the prior outlook of 6.5% to 9%.
• Fiscal 2026 diluted EPS guidance was raised to $28.70 to $29.00 from the prior outlook of $28.36 to $28.80.
• Fiscal 2026 capital expenditures guidance remains unchanged at $400 million to $450 million.
• Management raised guidance reflecting confidence in strategic priorities and the ability to drive profitable growth.

Business Segments and Product Lines

• Net sales growth was driven by increased comparable sales, the acquisition of Space NK, and sales from new stores.
• Gross profit margin compression was attributed to the impact of the Space NK business mix.
• SG&A expense growth was primarily driven by the acquisition of Space NK.
• Store expansion included 15 new stores opened (14 in the U.S., 1 in International) and 1 store closed during the quarter, resulting in a net increase of 14 stores.
• Total store count reached 1,622 at quarter-end (1,534 in the U.S., 88 International).
• During the first six months of fiscal 2026, 34 new stores were opened (32 U.S., 2 International) and 3 were closed.
• Category sales mix for the 13-week period: Cosmetics (37%), Skincare and wellness (24%), Haircare (20%), Fragrance (13%), Services (4%), Other (2%).

Market and Competitive Landscape

• Ulta Beauty is identified as the largest specialty beauty retailer in the U.S.
• The company is expanding internationally through its subsidiary Space NK (U.K. and Ireland), a joint venture in Mexico, and a franchise in the Middle East.
• The company leverages its "Ulta Beauty Unleashed" strategy to drive excitement and growth through innovation, value, experiences, and convenience.

Risks and Challenges

• Forward-looking statements are subject to risks including changes in global, regional, or local economic, business, competitive, market, and regulatory factors.
• Actual results may differ from expectations due to uncertainties and assumptions difficult to predict or quantify.
• Forward-looking statements do not reflect the potential impact of future acquisitions, mergers, dispositions, joint ventures, investments, or other strategic transactions.

Management Commentary and Tone

• Kecia Steelman, President and CEO, described the quarter as "impressive" with strong sales, profit, and earnings growth.
• Management stated the team is executing with discipline and translating strategic priorities into tangible benefits for guests.
• Management expressed confidence in driving profitable growth and long-term value for stakeholders in a dynamic environment.

Other Key Points

• The stock repurchase plan for fiscal 2026 was increased to $1.8 billion from $1.5 billion.
• During the first six months of fiscal 2026, the company repurchased 1.4 million shares of common stock at a cost of $791.1 million.
• As of August 1, 2026, $1.0 billion remained available under the $3.0 billion share repurchase program announced in October 2024; the company expects to utilize this remaining amount by the end of fiscal 2026.
• Capital expenditures for the first six months of fiscal 2026 totaled $139.5 million, supporting new stores, relocations, remodels, and IT investments.
• The company held a conference call on August 27, 2026, to discuss results, with a webcast available on its Investor Relations website.