Key takeaways:
- Net sales rose 8.9% to $3 billion in Q2, with net income up about 8% to $282 million.
- Ulta raised its full-year outlook to 6.7% to 7.2% net sales growth and 3.2% to 3.7% comparable sales growth.
- CEO Kecia Steelman pointed to TikTok Shop, fragrance and loyalty as growth drivers heading into the holidays.
Ulta Beauty is proving that, even in a value-conscious consumer environment, beauty remains a category where discovery can still drive spending.
For the second quarter of fiscal 2026, Ulta Beauty reported an 8.9% increase in net sales to $3 billion, fueled by increased comparable sales, the addition of new stores and the contribution from its acquisition of Space NK. Comparable sales increased 3.8%.
Gross margin decreased to 39.1% of sales compared with 39.2% a year earlier, primarily due to the impact of the Space NK business mix. Net income increased about 8% to $282 million.
The results gave Ulta officials confidence to raise their full-year outlook, with net sales now expected to increase 6.7% to 7.2%, compared with its previous 6% to 7% forecast. Comparable sales are now expected to rise 3.2% to 3.7%, up from the prior 2.5% to 3.5% range.
“Our team delivered another impressive quarter of strong sales, profit, and earnings growth, demonstrating that we are executing with discipline and translating our Ulta Beauty Unleashed strategy into tangible benefits for our guests,” CEO Kecia Steelman said in a statement.
Ulta’s U.S. business remains the principal engine. The company opened 14 net new stores during the quarter, 13 in the U.S. and one Space NK location, and continued to lean into the physical-store experience, where associates hosted more than 40,000 events. High-energy events tied to brand launches and activations sparked in-store traffic, guest engagement and sales, Steelman said.
Ulta Leans into Digital to Drive Beauty Discovery
Digital is becoming a bigger part of Ulta’s ecosystem rather than a separate sales channel.
Ulta’s app engagement continues to climb, with the app now accounting for more than 60% of online sales. Ulta’s TikTok Shop is also gaining traction, having driven more than 100 million impressions since its launch, supported by a grand opening campaign and new brand additions to the shop.
“We are pleased with the ongoing success of TikTok, the initiative, and the competitive differentiation that is enabling for Ulta Beauty,” Steelman said on the call.
Behind those initiatives is a valuable loyalty ecosystem. During the quarter, Ulta’s loyalty program reached about 47 million active members, an increase of 3%.
“We are creating more opportunities to drive engagement and incremental sales while delivering greater relevance for every guest,” Steelman said.
Ulta Beauty CEO Kecia Steelman. Photo courtesy Ulta Beauty.
Newness Drives Fragrance Growth
Fragrance was a notable growth driver in the quarter, delivering high-teen comparable sales growth, with new launches providing the newness that keeps beauty shoppers engaged, executives said.
Ulta is also finding different ways to connect with consumers beyond traditional beauty retail. Its Rewrite the Rules summer campaign leaned into self-expression, amplified through partnerships including Supergirl and actress Millie Alcock.
Navigating a Value-Conscious Environment
That ecosystem will be tested in the back half of the year, when Ulta enters one of its most important promotional periods with a packed calendar of beauty events, launches and holiday activity.
Asked about the promotional environment, Steelman said value is an increasingly important consideration for shoppers navigating economic uncertainty.
“Everybody is watching their pocketbook,” Steelman said.
Asked whether Ulta would get more promotional to defend market share heading into the holidays, Steelman said the company’s focus is on differentiation rather than matching competitors.
“Our job is not to chase competitors, it is to really lean into what differentiates Ulta Beauty and execute it even better,” Steelman said.
