Ulta Beauty (ULTA) Shares Slide Despite Strong Q2 Earnings Beat and Raised Guidance

Key Takeaways

• Second-quarter earnings per share reached $6.55, surpassing Wall Street’s $6.17 projection by $0.38
• Quarterly revenue climbed 8.9% from the prior year to $3.04 billion, exceeding the $2.98 billion forecast
• Comp store sales increased 3.8%, representing a deceleration from the 6.7% growth achieved in last year’s comparable period
• Management elevated full-year earnings outlook to a range of $28.70-$29.00, above the previous $28.36-$28.80 target
• Shares declined approximately 3% during Friday’s premarket session following the earnings announcement

The beauty retail giant unveiled second-quarter financial results Wednesday that exceeded analyst projections across key metrics, yet investors responded by sending shares lower in Friday’s premarket session. The stock traded near $524 before the opening bell, representing a decline from Wednesday’s closing price around $540.

Ulta Beauty, Inc., ULTA

On an adjusted basis, earnings per share registered at $6.55, comfortably exceeding the Street’s $6.17 target. Top-line results reached $3.04 billion, marking an 8.9% year-over-year increase and surpassing the $2.98 billion consensus forecast.

Comparable store sales advanced 3.8% during the period. While positive, this represents a moderation from the robust 6.7% comparable sales expansion recorded in the year-ago quarter.

Operating profit expanded 10.1% to reach $379.6 million. Gross profit margin settled at 39.1%, slightly below the prior year’s 39.2% figure, with management attributing the modest compression to the Space NK business contribution.

Full-Year Forecast Increased

Ulta elevated its fiscal year projections across multiple metrics. The revised earnings per share target now stands at $28.70 to $29.00, up from the previous $28.36 to $28.80 range. Net sales growth expectations were lifted to 6.7% to 7.2%, compared with the earlier 6% to 7% outlook. Comparable sales growth guidance was adjusted to 3.2% to 3.7%, an increase from the prior 2.5% to 3.5% range.

Chief Executive Officer Kecia Steelman commented that the quarterly performance demonstrates the organization is “executing with discipline” while successfully implementing its Ulta Beauty Unleashed strategic initiative.

Bank of America’s research team, under the leadership of Lorraine Hutchinson, highlighted the comparable sales outperformance, margin resilience, and guidance increase as addressing the primary concerns investors held entering the earnings release. The firm maintained its Buy recommendation.

Share Repurchase Program Enhanced

The company also announced an expansion of its fiscal 2026 stock buyback authorization from $1.5 billion to $1.8 billion. During the first six months of the current fiscal year, management repurchased 1.4 million shares totaling $791.1 million. The company anticipates deploying the remaining $1.0 billion of its existing authorization before the fiscal year concludes.

Analyst forecasts point to approximately 4.7% revenue growth over the coming twelve months, representing a modest deceleration from the pace achieved during the previous three years. The retailer has expanded its physical store footprint at an average annual rate of 6.9% over the past two years.

Shares finished Wednesday’s regular session at $540.10, then retreated to $524.07 during Friday’s premarket trading hours.

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