Ulta Beauty Stock Tumbles as Shrinking Profits Overshadow Record Sales
Bolingbrook, Thursday, 12 March 2026.
Despite a record $12.4 billion in sales, Ulta Beauty shares plunged 8% as shrinking profit margins and a cautious 2026 outlook highlighted growing financial pressures in the retail sector.
A Mixed Bag for the Fourth Quarter
On Thursday, March 12, 2026, Ulta Beauty released its financial results for the fourth quarter ended January 31, 2026 [1][2]. The cosmetics retailer reported revenue of $3.9 billion, or exactly $3,898.4 million, topping Wall Street’s expectation of $3.80 billion [1][3]. This represented an 11.8% increase compared to the same period in the previous year [1][2]. Despite this strong top-line performance, shares sank roughly 8% in extended trading [1]. The market’s reaction was largely driven by an earnings per share (EPS) miss; the company reported a diluted EPS of $8.01, falling short of the $8.03 expected by analysts and down from $8.46 in the year-ago quarter [1][3].
Full-Year 2025 Triumphs Weighed Against Rising Costs
Looking at the broader picture for fiscal year 2025, Ulta Beauty demonstrated robust overall growth. Full-year net sales increased by 9.7% to reach $12.4 billion, or $12,392.8 million specifically, up from $11,295.7 million in the prior year [1][3]. This annual growth was supported by a 5.4% increase in comparable sales, which benefited from a 3.3% higher average ticket and a 2.0% increase in transactions [2][3]. The company’s product mix for the year remained heavily anchored in its core offerings, with cosmetics accounting for 38% of net sales and skincare making up 24% [3].
Cautious Optimism for 2026
As executives look toward the remainder of 2026, the guidance provided on Thursday suggests a more tempered growth trajectory. Ulta anticipates net sales growth of 6% to 7% for fiscal 2026, alongside comparable sales growth of 2.5% to 3.5% [1][3]. The company expects diluted earnings per share to land between $28.05 and $28.55 [1][3]. The midpoint of this EPS guidance, calculated as 28.3, is slightly below the $28.40 midpoint that analysts had modeled for the year [1]. Additionally, capital spending is projected to be between $400 million and $450 million for the upcoming fiscal year [3].