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Key takeaways
- Ulta Beauty reported better-than-expected quarterly results, with sales boosted by increased transactions and higher average spending.
- The cosmetics retailer also boosted its full-year outlook.
Shares of Ulta Beauty ( ULTA ) rose to a record high on Friday after the beauty and fragrance retailer reported earnings that beat analysts’ estimates and raised its forecasts.
The stock is up more than 14% in recent trading, on track to end the week at an all-time high and lead gains for the S&P 500. (Read our daily markets coverage here.)
Ulta Beauty reported third-quarter earnings per share of $5.14 on revenue that jumped 12.9% year over year to $2.86 billion. Both numbers exceeded analysts’ expectations as the cosmetics retailer said its growth strategy and purchase of British luxury cosmetics company Space NK was paying off.
Comparable store sales rose 6.3%, supported by a 3.8% rise in average tickets and a 2.4% increase in transactions. The company said its revenue gains were primarily driven by those higher comparable sales, the acquisition of Space NK, and the addition of new stores.
Why is this important?
Beauty products have been among the most resilient retail categories, outperforming apparel and other goods as consumers continue to spend on cosmetics, fragrances and skincare. Ulta’s strong traffic, higher ticket values and improved routing suggest resilient demand while other parts of retail struggle to attract wary consumers.
“The newness of our exciting assortment, enhanced in-store experiences, digital experiences and bold marketing efforts resonate with our guests,” said Ulta CEO Kecia Steelman.
Ulta and Victoria’s Secret (VSCO), which also reported better-than-expected earnings on Friday, may benefit from the so-called “lipstick effect,” which describes a consumer’s tendency to keep spending on small items like cosmetics and lingerie even when broader economic conditions are uncertain.
Ulta Beauty now expects full-year earnings per share in the range of $25.20 to $25.50, and sales of about $12.3 billion. Previously, it expected earnings per share in the range of $23.85 to $24.30, and sales in the range of $12 billion to $12.1 billion.
With Friday’s gains, Ulta Beauty shares have added nearly 40% to their value in 2025.
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