Ulta Beauty closed fiscal 2025 with strong top line momentum and slightly tighter margins, then set 2026 guidance that points to steady, if slower, growth from an already high base. Net sales and comps both accelerated in the holiday quarter, even as operating margin stepped down versus last year.
Fiscal 2025 and Q4 performance
For fiscal 2025, net sales rose 9.7% to $12.39 billion, with comparable sales up 5.4%, driven by a 3.3% increase in average ticket and a 2.0% increase in transactions. Gross profit climbed 10.4% to $4.85 billion, and gross margin improved to 39.1% (from 38.8%) on lower inventory shrink and better merchandise margin, partly offset by channel mix and some deleverage in fixed store costs and other revenue. Operating income reached $1.54 billion, or 12.4% of net sales, down from 13.9% a year earlier, while diluted EPS inched up 1.2% to $25.64.
In the fourth quarter alone, net sales increased 11.8% to $3.90 billion, and comparable sales rose 5.8%, with ticket prices up 4.2% and transactions up 1.6%. Q4 gross margin slipped slightly to 38.1% (from 38.2%), and operating margin declined to 12.2% (from 14.8%), reflecting higher SG&A and mix headwinds. Diluted EPS for the quarter came in at $8.01, below the prior year’s $8.46 despite the double digit sales growth.
“The Ulta Beauty team closed the year with momentum, delivering strong fourth quarter and full-year sales and continued market share gains. Our better-than-planned financial performance reflects our continued focus on serving our guests and consistently delivering great experiences through better execution, compelling newness, more seamless and convenient experiences, and bold new merchandising and marketing strategies,” said Kecia Steelman, president and chief executive officer.
Cash, stores and capital returns
Ulta Beauty ended fiscal 2025 with $424.2 million in cash and cash equivalents, plus $70 million in short term investments and $62.3 million of short term debt. Inventory stood at about $2.2 billion, up 10.8%, reflecting new brands, the Space NK acquisition, and 60 net new U.S. stores. Capital expenditures totaled $434.8 million, funding new stores, remodels, supply chain, and tech.
On the capital return side, the company repurchased about 2.0 million shares for $890.5 million during the year and still has roughly $1.8 billion remaining under its $3.0 billion authorization. Management continues to frame buybacks as a core use of excess cash alongside growth investments.
Fiscal 2026 guidance
For fiscal 2026, Ulta Beauty is guiding: net sales growth of 6% to 7%, comparable sales growth of 2.5% to 3.5%, operating income growth of 6% to 9%, and diluted EPS between $28.05 and $28.55. Planned capital expenditures are $400 to $450 million, implying sustained investment in stores, supply chain, and digital, while slightly trimming capex versus 2025.
This outlook suggests management expects continued demand for beauty, just at a more normalized clip after several strong years, and sees room for modest margin rebuilding even as it spends behind international expansion and platforms like Space NK and its Mexico and Middle East ventures.
