Ulta’s fourth quarter results were met with a significant negative market reaction, despite revenue surpassing Wall Street expectations. Management pointed to successful holiday promotions, omnichannel execution, and continued market share gains as key drivers of sales growth. CEO Kecia Steelman emphasized that “holiday served as a culmination of our efforts to advance the business,” with notable strength in fragrance and hair care categories. However, profitability was pressured by increased guest-facing investments and higher expenses, a point management acknowledged as necessary for long-term positioning.
Is now the time to buy ULTA? Find out in our full research report (it’s free for active Edge members).
Ulta (ULTA) Q4 CY2025 Highlights:
- Revenue: $3.90 billion vs analyst estimates of $3.83 billion (11.8% year-on-year growth, 1.9% beat)
- EPS (GAAP): $8.01 vs analyst expectations of $8.03 (in line)
- Adjusted EBITDA: $558.7 million vs analyst estimates of $561.9 million (14.3% margin, 0.6% miss)
- EPS (GAAP) guidance for the upcoming financial year 2026 is $28.30 at the midpoint, missing analyst estimates by 1%
- Operating Margin: 12.2%, down from 14.8% in the same quarter last year
- Locations: 1,505 at quarter end, up from 1,445 in the same quarter last year
- Same-Store Sales rose 5.8% year on year (1.5% in the same quarter last year)
- Market Capitalization: $23.1 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ulta’s Q4 Earnings Call
- Christina Kattai (Deutsche Bank) asked about the composition of comparable sales and the impact of pricing vs. transactions. CEO Kecia Steelman explained that pricing increases affected 10%–15% of the assortment and that 2026 is expected to see normalized pricing trends.
- Christopher Michael Horvers (JPMorgan) questioned whether Ulta’s 2%–4% industry growth outlook reflects a slowdown and how geopolitical risks are factored into guidance. Steelman responded that the outlook is in line with recent trends, with caution built in for potential macro disruptions.
- Sydney Wagner (Jefferies) inquired about competitive pressures from mass retailers entering prestige beauty and Ulta’s strategy to maintain its competitive moat. Steelman cited Ulta’s “low to lux” positioning, loyalty program, and investments in brand-building and omnichannel as differentiators.
- Oliver Chen (TD Cowen) asked about category trends in makeup, wellness, and K-Beauty, and how newness is managed. Steelman emphasized curated assortment, quality control, and leveraging marketplace as complementary to the core business.
- Susan Anderson (Canaccord Genuity) sought detail on the timing and cost implications of the new Northwest distribution center and margin progression. Steelman and Del Orfus said the center will be operational in 2027 and that margin improvement will come as investments annualize and efficiencies ramp up.
Catalysts in Upcoming Quarters
Looking forward, our analysts will be tracking (1) the effectiveness of Ulta’s digital and in-store personalization initiatives, (2) the pace of international expansion and integration of Space NK, and (3) progress in driving growth from new wellness, fragrance, and marketplace offerings. We will also monitor SG&A discipline and whether margin pressures ease as productivity initiatives scale.
Ulta currently trades at $521.05, down from $624.70 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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