Ulta Beauty (ULTA) earnings Q3 2025

Ulta Beauty Raises Full-Year Sales Outlook After Strong Q3 Performance

Ulta Beauty, a leading beauty retailer, has raised its full-year sales outlook after exceeding Wall Street’s expectations for its fiscal third quarter. The company’s strong performance was driven by increased sales of perfumes, skincare items, and other beauty products. As a result, Ulta now expects net sales for the year to reach approximately $12.3 billion, up from its previous forecast of $12 billion to $12.1 billion.

This revised outlook represents a significant increase from last fiscal year’s net sales of $11.3 billion. Additionally, Ulta expects earnings per share to range from $25.20 to $25.50, up from its prior expectations of $23.85 to $24.30. The company’s comparable sales, which include sales at stores open at least 14 months and e-commerce sales, are expected to rise by 4.4% to 4.7%, outpacing its previous outlook of 2.5% to 3.5%.

Key Drivers of Growth

Ulta’s strong Q3 performance was driven by several key factors, including the success of its fragrance and skincare categories. Fragrance sales saw double-digit growth year over year, with luxury scents from brands like Valentino and Dolce & Gabbana, as well as lower-priced options like Squishmallows perfumes, contributing to the increase. Skincare sales also grew by high single digits year over year, with shoppers purchasing items discovered on social media, including Korean or K-beauty brands and merchandise from Rihanna’s Fenty Skin Body collection.

The company’s efforts to expand its online presence and improve the in-store experience have also paid off, with average ticket sales rising 3.8% and transactions increasing by 2.4% year over year. Ulta’s decision to add more shelf space for fragrance in over 60% of its U.S. stores has helped to drive sales in this category, particularly in the lead-up to the holiday season.

Expanding Internationally and Online

Ulta has also been focused on expanding its international presence, with the launch of a third-party marketplace in October and the acquisition of British beauty retailer Space NK in July. This deal allows Ulta to enter a new international market, with Space NK operating 83 stores in the United Kingdom and Ireland. The company has also opened seven stores in Mexico through a joint venture partnership with Grupo Bakso and its first store in the Middle East in Kuwait through a franchise partnership with Al-Shabaab.

Through its marketplace, Ulta has added over 120 brands and 3,500 unique items to its online assortment, providing customers with a wider range of products to choose from. The company is optimistic about the potential for this new capability to drive growth and attract new customers, particularly in the wellness category.

Challenges and Opportunities Ahead

Despite the strong Q3 performance, Ulta faces challenges in the form of increased competition from big-box retailers like Walmart, online players like Amazon, and upstarts like TikTok Shop. The company must also navigate the impact of higher tariffs on the prices of some of its products, which has led to brand-driven price increases in certain categories.

However, with the holiday season approaching, Ulta is well-positioned to capitalize on the popularity of beauty products as gifts. According to market research firm Circana, beauty sales have been strong overall this year in the U.S., with prestige beauty sales rising 4% and mass beauty sales increasing 5% year over year. With its expanded online presence, improved in-store experience, and strong product offerings, Ulta is poised for continued growth and success in the beauty retail market.