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1. Company Snapshot

1.a. Company Description

Ulta Beauty, Inc.operates as a retailer of beauty products in the United States.The company's stores offer cosmetics, fragrances, skincare and haircare products, bath and body products, and salon styling tools; professional hair products; salon services, including hair, skin, makeup, and brow services; and nail services.


It also provides its private label products, such as the Ulta Beauty Collection branded cosmetics, skincare, and bath products, as well as Ulta Beauty branded products; and the Ulta Beauty branded gifts.As of March 10, 2022, the company operated 1,308 retail stores across 50 states.It also distributes its products through its website ulta.com; and mobile applications.


The company was formerly known as Ulta Salon, Cosmetics & Fragrance, Inc.and changed its name to Ulta Beauty, Inc.in January 2017.


Ulta Beauty, Inc.was incorporated in 1990 and is based in Bolingbrook, Illinois.

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1.b. Last Insights on ULTA

Ulta Beauty's recent performance is driven by strong sales growth, expanding margins, and strategic execution. The company's Q2 sales reached $2.8 billion, with 6.7% comp growth, and gross margin expanded 90 bps to 39.2%, driven by lower shrink and sharper merchandising execution. New product innovation, including 43 new brands in 1H25, has attracted new customers and boosted cross-category spending. A recent upgrade to "Buy" rating by analysts cites improving trends, disciplined leadership, and focus on product innovation as key drivers.

1.c. Company Highlights

2. Ulta Beauty's Q3 2025 Earnings: A Strong Performance

Ulta Beauty's third-quarter 2025 results exceeded expectations, with net sales increasing 12.9% to $2.9 billion, operating profit at 10.8% of sales, and diluted EPS of $5.14 per share, beating analyst estimates of $4.61. The company's gross margin increased 70 basis points to 40.4% of sales, primarily due to lower inventory shrink and higher merchandise margin. The strong top-line results were fueled by the investments made to support the Ulta Beauty Unleashed strategy.

Publication Date: 08:20

📋 Highlights
  • Net Sales Growth: Surpassed $2.9B (+12.9% YoY) with 6.3% Comparable Sales Increase
  • EPS Held Steady: at $5.14 per Share, Despite 23.3% SG&A Growth to $841M
  • Loyalty Program Expansion: Reached 46.3 Million Members (+4% YoY)
  • E-Commerce Strength: Drove Mid-Teen Growth, Contributing to 6.3% Comp Sales Rise
  • Strategic Investments: Added 35+ New Brands and 120+ Brands via UB Marketplace Launch

Segment Performance

The company saw comparable sales growth of 6.3%, with positive comps across all categories and channels, and notable double-digit strength in e-commerce. All major categories exceeded expectations and delivered positive comp growth, with fragrance being the strongest growing category, delivering double-digit comp sales growth. The company's e-commerce sales grew in the mid-teen range, with digital channels contributing to comp growth.

Strategic Initiatives

The company launched over 35 new brands during the quarter, many of which were exclusive, and debuted its new brand equity campaign, "beauty happens here." Ulta Beauty also expanded its international presence, opening seven stores in Mexico and one store in Kuwait. The company successfully launched UB Marketplace in the third quarter, adding over 120 brands and 3,500 SKUs to its online assortment.

Guidance and Outlook

The company updated its outlook for the year, expecting net sales of approximately $12.3 billion, with comp sales growth between 4.4% and 4.7%, and operating margin between 12.3% and 12.4% of net sales. For Q4, the company expects comp growth between 2.5% and 3.5%, operating margin between 12% and 12.3%, and EPS between $7.61 and $7.90. The company is confident in its plans and improvements made, and its teams are ready to drive excitement and deliver for guests and their loved ones.

Valuation

With a P/E Ratio of 22.61 and an expected revenue growth rate of 8.9% next year, the stock appears to be reasonably valued. The company's ROE of 46.87% and ROIC of 22.5% indicate strong profitability. As Kecia Steelman, the new CFO, mentioned, "We're being prudent with our guidance to ensure an achievable plan... I believe we can sustain momentum." The company's strong fundamentals and growth prospects make it an attractive investment opportunity.

3. NewsRoom

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Ulta Stock is Surging This Holiday Season. Here's Why the Beauty Retailer Just Hiked Its Profit and Sales Outlook.

Dec -05

Source: fool.com

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Why Ulta Beauty Stock Jumped Today

Dec -05

Source: fool.com

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Dow Jones Today: Stocks Tick Higher After Key Inflation Data; Netflix To Buy Warner Bros. in $83B Deal

Dec -05

Source: investopedia.com

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Soaring Ulta Beauty Leads Goldman Sachs, Two More Stocks To Highs

Dec -05

Source: investors.com

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This Beauty Retailer's Stock Is Leading the S&P 500 Higher Friday. Here's Why

Dec -05

Source: investopedia.com

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Top Stock Movers Now: Ulta Beauty, Salesforce, Paramount Skydance, and More

Dec -05

Source: investopedia.com

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Investors Cheer Upbeat Inflation, Consumer Sentiment Data

Dec -05

Source: schaeffersresearch.com

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Ulta Beauty: Heavy Costs Now, Stronger Tomorrow -- A Quality Diversifier

Dec -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.21%)

6. Segments

Cosmetics

Expected Growth: 8%

Ulta Beauty's 8% growth in cosmetics is driven by increasing demand for premium and niche brands, expansion of online presence, and strategic partnerships. Additionally, the company's loyalty program, Ultamate Rewards, contributes to repeat business and customer retention. Furthermore, the growing popularity of skincare and makeup among younger generations, particularly Gen Z, fuels sales growth.

Haircare Products and Styling Tools

Expected Growth: 6%

Ulta Beauty's 6% growth in haircare products and styling tools is driven by increasing demand for premium and natural products, rising popularity of e-commerce and social media influencer marketing, expanding product offerings in curly and textured hair, and growing interest in at-home hair coloring and styling. Additionally, the company's loyalty program and strategic partnerships with popular brands contribute to the segment's growth.

Skincare

Expected Growth: 9%

Uptick in skincare sales at Ulta Beauty driven by increasing consumer focus on self-care, rising demand for natural and organic products, and growing popularity of skincare routines among younger generations. Additionally, Ulta's loyalty program, Ultamate Rewards, and strategic partnerships with popular skincare brands contribute to the 9% growth.

Fragrance and Bath

Expected Growth: 5%

Ulta Beauty's Fragrance and Bath segment growth is driven by increasing demand for premium and niche fragrances, expansion of online sales, and strategic partnerships with popular brands. Additionally, the rise of wellness and self-care trends, as well as the growing popularity of experiential retail, contribute to the segment's 5% growth.

Services

Expected Growth: 4%

Ulta Beauty's 4% growth is driven by increasing demand for premium beauty products, expansion of e-commerce capabilities, and strategic partnerships with popular brands. Additionally, the company's loyalty program and in-store experience enhancements contribute to customer retention and acquisition. Furthermore, the growing trend of self-care and wellness also fuels the demand for Ulta's services.

Accessories and Other

Expected Growth: 7%

Ulta Beauty's Accessories and Other segment growth of 7% is driven by increasing demand for beauty tools, travel-sized products, and gift sets. Strong sales of hair accessories, cosmetics bags, and skincare devices contribute to growth. Additionally, the rise of e-commerce and omnichannel retailing enables customers to easily purchase these items, further boosting segment growth.

7. Detailed Products

Skincare

Ulta Beauty offers a wide range of skincare products, including cleansers, moisturizers, serums, and masks from various brands, catering to different skin types and concerns.

Haircare

Ulta Beauty provides a vast selection of haircare products, including shampoos, conditioners, styling products, and hair color, from popular brands, suitable for different hair types and textures.

Makeup

Ulta Beauty offers an extensive range of makeup products, including foundation, eyeshadow, mascara, lipstick, and more, from various brands, catering to different skin tones and preferences.

Fragrances

Ulta Beauty carries a wide selection of fragrances from popular brands, including perfumes, colognes, and body sprays, suitable for both men and women.

Tools and Accessories

Ulta Beauty offers a variety of tools and accessories, including brushes, sponges, tweezers, and more, from popular brands, designed to help customers achieve professional-looking results at home.

Salon Services

Ulta Beauty provides a range of salon services, including haircuts, color treatments, and waxing, performed by trained professionals in-store.

8. Ulta Beauty, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ulta Beauty, Inc. has a low threat of substitutes due to its strong brand recognition and loyalty programs, making it difficult for customers to switch to alternative products or services.

Bargaining Power Of Customers

Ulta Beauty, Inc. has a medium bargaining power of customers due to the presence of online retailers and specialty beauty stores, which gives customers some bargaining power, but the company's loyalty programs and strong brand recognition mitigate this power.

Bargaining Power Of Suppliers

Ulta Beauty, Inc. has a low bargaining power of suppliers due to its large scale of operations and strong relationships with suppliers, giving it negotiating power to secure favorable prices and terms.

Threat Of New Entrants

Ulta Beauty, Inc. has a medium threat of new entrants due to the high capital requirements and regulatory hurdles in the beauty industry, but the rise of e-commerce and social media has made it easier for new entrants to gain traction.

Intensity Of Rivalry

Ulta Beauty, Inc. operates in a highly competitive industry with many established players, leading to a high intensity of rivalry, with companies competing on price, product offerings, and customer experience.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 45.61%
Debt Cost 3.95%
Equity Weight 54.39%
Equity Cost 10.70%
WACC 7.62%
Leverage 83.84%

11. Quality Control: Ulta Beauty, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ulta Beauty

A-Score: 5.5/10

Value: 3.4

Growth: 7.7

Quality: 6.5

Yield: 0.0

Momentum: 9.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Bath & Body Works

A-Score: 5.0/10

Value: 8.8

Growth: 4.2

Quality: 6.1

Yield: 5.0

Momentum: 2.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Sally Beauty Holdings

A-Score: 4.5/10

Value: 7.7

Growth: 3.3

Quality: 5.1

Yield: 0.0

Momentum: 8.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
e.l.f. Beauty

A-Score: 4.4/10

Value: 0.8

Growth: 9.6

Quality: 7.1

Yield: 0.0

Momentum: 7.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Estee Lauder

A-Score: 2.9/10

Value: 3.3

Growth: 1.7

Quality: 2.7

Yield: 2.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Coty

A-Score: 2.8/10

Value: 6.4

Growth: 3.1

Quality: 2.8

Yield: 0.0

Momentum: 0.5

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

601.5$

Current Price

601.5$

Potential

-0.00%

Expected Cash-Flows