Ulta Beauty has raised its revenue and profit guidance for fiscal 2026, after posting better-than-expected results in the second quarter. The American perfume and cosmetics retailer's net sales grew 8.9% year on year, while comparable sales increased 3.8%.

A performance driven by stores and Space NK

This performance is attributed to higher in-store sales, the contribution of Space NK, the British chain recently acquired by the group, and the continued expansion of the store network. Ulta Beauty opened 13 new stores during the quarter. Gross profit rose 8.7%, to $1.2 billion, even as gross margin as a percentage of net sales declined, mainly due to the impact of Space NK on the business mix. The group also strengthened its presence on TikTok Shop and integrated the Chinese cosmetics brand Proya in August.

K-beauty under watch

Asked during an investor conference, president and CEO Kecia Steelman said the company has been « leader du marché américain du K-beauty depuis 18 mois » and continues to accelerate in this segment. She nonetheless warned against the surrounding hype: « Je pense qu'on peut vraiment se laisser emporter par ce battage autour du K-beauty, perçu comme très orienté fast fashion. » According to her, Ulta Beauty will not let itself be « pas emporter par ce fast fashion du K-beauty en raison du bruit ambiant sur le marché », adding that C-beauty is also very important for Ulta Beauty.

A mixed beauty market

Mass cosmetics sales grew only 5% between January and July, while the fragrance category saw a 15% increase in the first half. Against this backdrop, Kecia Steelman noted that « la valeur est une considération de plus en plus importante pour le consommateur » amid economic uncertainty. She said the promotional environment had increased slightly across both markets, with Ulta Beauty itself being somewhat more promotional year on year.

The executive summed up the quarter by pointing to disciplined execution and tangible benefits for the group's customers, as Ulta Beauty now adjusts its financial ambitions for the full fiscal 2026.