Ulta raises full-year outlook after Q2 sales gain

Ulta Beauty has enhanced its fiscal 2026 full-year financial projections following robust sales and earnings for the second quarter. This move indicates that the retailer’s strategic transformations are starting to reflect positively in its financials.

The company now anticipates net sales growth of 6.7% to 7.2%, up from its previous forecast of 6% to 7%. Additionally, Ulta Beauty has lifted its comparable sales outlook to 3.2% to 3.7%, compared to its earlier estimate of 2.5% to 3.5%.

Improved Sales and Profitability

For the quarter ending August 1, 2026, Ulta Beauty reported net sales of $3.03 billion, a nearly 9% increase from the $2.8 billion recorded in the same period the previous year. The retailer attributed this growth to increased comparable sales, the acquisition of Space NK, and revenue from new stores.

Related: Walmart to build $1.3bn Georgia fulfilment hub

Comparable sales rose by 3.8% in the quarter, compared to 6.7% in the same period last year. Gross profit increased 8.7% year-on-year to $1.2 billion, while gross margin slightly dipped to 39.1% from 39.2%.

Operating income grew 10.1% to $379.6 million, representing 12.5% of net sales, compared to 12.4% the previous year. Diluted earnings per share rose 13.3% to $6.55 from $5.78.

While the growth mix is encouraging, it’s essential to note that the comparable sales figure of 3.8% is lower than the 6.7% posted in the prior year period. This suggests that the headline numbers are partly driven by the Space NK acquisition and new store openings, indicating that the company’s underlying momentum might not be as strong as the top-line growth implies.

Enhanced Full-Year Outlook

Ulta Beauty has boosted its operating income growth forecast to 8.3% to 9.3%, up from 6.5% to 9%, and increased its diluted earnings per share guidance to $28.70 to $29, compared to the previous estimate of $28.36 to $28.80. Its capital expenditure forecast remains unchanged at $400 million to $450 million.

Related: Congress debates defining ultraprocessed foods

In the first half of FY26, Ulta Beauty spent $139.5 million on capital expenditure, including new stores, relocations, remodels, and information technology. This spending pace suggests that the retailer is committed to maintaining its expansion plans even as it tightens its profit outlook.

Ulta Beauty president and CEO Kecia Steelman credited these results to her team’s successful execution. She said, “Our team delivered another impressive quarter of strong sales, profit, and earnings growth, demonstrating our ability to convert our Ulta Beauty Unleashed strategy into tangible benefits for our customers.”

Despite broader retail sector concerns about consumer spending, particularly in discretionary categories, Ulta’s updated numbers suggest that its customer base continues to spend, at least for now.