Ulta Beauty is joining TikTok Shop and has indicated that it is "cautious" over the impact of rising conflict amid the Middle East war, as the retailer announced its 2025 full-year earnings and outlook for 2026.
Cosmetics Business rounds up the key takeaways from the beauty retailer’s latest earnings report that you need to know.
Ulta Beauty’s Q4 and full-year 2025 performance
Ulta Beauty’s net sales grew 11.8% in the fourth quarter of the 2025 fiscal year to US$3.9bn.
Comparable Q4 sales grew 5.8%, with a 4.2% increase in average ticket and a 1.6% increase in transactions.
Across the full year to the end of February 2026, net sales grew 9.7% compared with the previous year, hitting $12.4bn.
Comparable sales across the 2025 fiscal year increased 5.4%, driven by a 3.3% increase in average ticket and a 2.0% increase in transactions.
Both full-year and Q4 sales were driven by comparable sales, as well as the acquisition of UK beauty retailer Space NK and sales from new stores.
Gross profit increased 10.4% to $4.8bn, and margins increased to 39.1% from 38.8% due to lower inventory shrink and higher merchandise margin.
This was partially offset by adverse channel mix, as well as the deleveraging of other revenue and store fixed expenses.
Expenses increased 17.4% to $3.3bn, and as a percentage of sales from 24.9% to 26.6%.
This was a result of “higher incentive compensation, higher store payroll and benefits, and higher corporate overhead due to strategic enterprise investments”, the company said in a statement.
“The Ulta Beauty team closed the year with momentum, delivering strong fourth quarter and full-year sales and continued market share gains,” said Kecia Steelman, president and CEO of Ulta Beauty.
“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.”
As the beauty retailer’s “Ulta Beauty Unleashed” strategy continues, Steelman said it is “well positioned for sustainable, profitable growth in 2026 and beyond”.
Ulta Beauty’s 2026 outlook
For the 2026 fiscal year ahead, Ulta Beauty expects net sales growth of 6% to 7%, and comparable sales growth of between 2.5% and 3.5%, signalling slowing growth compared to 2025.
“Throughout 2025, we closely monitored consumer behaviour and observed continued resilience, a strong focus on value and affordability and increasing discernment in spending decisions,” Steelman said on a conference call with investors.
“At the same time, engagement with the beauty category remained healthy, and the landscape remained competitive.
“We expect these themes to continue into fiscal 2026, though we are increasingly mindful of rising global conflicts that could impact economic conditions.
“Absent increased broader macro disruption for the year, our expectation for the beauty category growth is in line with the average historical growth rate, with expected growth in the 2% to 4% range.”
Outlining priorities for 2026, Steelman said the US, where it has more than 1,500 stores, is a “top priority” where it sees opportunities to “unlock further growth”.
She continued: “We will continue to enhance our brand-building efforts to further elevate and differentiate our assortment and strengthen our position as the retailer of choice to launch, build scale and globalise across the full low-to-luxury portfolio.
“We will continue to strengthen our appeal to meet guests’ evolving beauty needs with innovative and relevant newness, like the record-breaking launch of Rare Beauty by Selena Gomez and the exclusive launch of Balmain’s new scent, Destin de Balmain.”
Ulta Beauty will also continue to pursue international expansion in the UK, Mexico, and the Middle East, as well as its wellness initiative and marketplace.
Plus, the retailer will increase automation of its supply chain and expand its artificial intelligence (AI) capabilities “to support the guest experience, drive associate productivity, [and] empower smarter decision making”, said Steelman.
“Beauty is deeply personal, and we believe leveraging new AI capabilities will enable us to deliver relevance, inspiration and expertise seamlessly across the guest beauty journey, powered by our loyalty ecosystem, rich first-party data and convenient omni-channel footprint,” she continued.
“We are engaging with industry leaders to explore how we can further leverage AI to amplify what makes Ulta Beauty distinct.”
The impact of 'rising conflict'
Two weeks into the conflict in the Middle East, JP Morgan analyst Chris Horvath asked on the investor call to what extent the geopolitical backdrop was baked into Ulta Beauty’s outlook for growth.
“We are cautious about how the consumer demand could evolve given the macro pressures and rising conflicts,” Steelman responded.
“But beauty has been a resilient category to these macro pressures.
“We see that the beauty engagement is going to continue to be healthy in 2026.”
Steelman said the retailer has no plans to accelerate promotion, but acknowledged that it was going to be a competitive environment.
“We do not see anything that is going to be out of the ordinary within pricing,” Steelman continued.
“We are going to get some easier comparables in the first half versus the second half of this year, and we are just continuing to focus on controlling what we can control, and making sure that we have a plan that gives us the ability to continue to take share, and to build a strategy regardless of the economic environment.”
TikTok Shop launch
Ulta Beauty announced that it will launch on TikTok Shop, as part of efforts to build its digital capabilities.
“Next week, we will launch Ulta Beauty on TikTok shop where guests can purchase immediately as they engage with content from Ulta Beauty and our brands on the platform,” said Steelman on the investor call.
“We are excited about the opportunities, both social and AI-enhanced commerce platforms, that are providing us to bring our undeniably Ulta Beauty experience and assortment to life.
“We will initially launch with a thoughtfully curated assortment of only adult brands, which will add another exciting tool to our brand-building playbook.”