Ulta said investments were a factor in a fourth-quarter earnings decline while reporting a comparable sales gain and a Wall Street beat.
Net income was $356.7 million, or $8.01 per diluted share, versus $393.3 million, or $8.46 per diluted share, in the year-earlier period.
Ulta topped a Zacks Investment Research analyst consensus earnings estimate of $8 per diluted share and revenue forecast of $3.81 billion.
Comparable sales advanced 5.8% year over year in the quarter, the company noted. Net sales were $3.9 billion versus $3.49 billion in the year-pervious period. Operating income was $476.9 million versus $516.3 million in the year-before quarter.
For the full fiscal year, Ulta posted net income of $1.15 billion, or $25.64 per diluted share, versus $1.2 billion, or $25.34 per diluted share, in the year earlier.
Net sales were $12.39 billion versus $11.3 billion in the year previous. Operating income was $1.53 billion versus $1.56 billion in the year before.
In providing fiscal 2026 financial guidance, Ulta maintained it expected net sales growth of 6% to 7% and diluted earnings per share growth of 9.4% to 11.4% to between $28.05 to $28.55.
In a conference call, Ulta President and CEO Kecia Steelman said investments in customer-facing initiatives pressured earnings. Ulta has been preparing to open a TikTok shop, integrating Space NK, a British beauty retailer it acquired last summer, and expanding the company’s recently launched marketplace.
Chris Del Orfus, Ulta CFO, said the overall comparable sales gain in the fourth quarter resulted from a 4.2% increase in average ticket and a 1.6% increase in transactions.
“From a channel perspective,” Del Orfus said, “both store and digital channels contributed to comp growth, with e-commerce sales delivering mid-teen growth and comp stores increasing sales in the low single-digit range.”
By category, Skincare and Wellness was strong, reflecting the impact of Space NK. The British operation, part of Ultra’s international expansion, has a higher mix of skincare sales than the Ulta Beauty business, Del Orfus pointed out. Skincare and Wellness delivered mid single-digit comp growth, in part because of the lift provided by giftable launches from the Therabody, Nodpod and Saje brands. Fragrance was the strongest performing category, delivering double-digit comp growth in the quarter. The hair care category delivered its best comp performance of the year, Del Orfus indicated, with comp growth in the high single-digit range.
Steelman said, “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.”
