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1. Company Snapshot

1.a. Company Description

Ulta Beauty, Inc.operates as a retailer of beauty products in the United States.The company's stores offer cosmetics, fragrances, skincare and haircare products, bath and body products, and salon styling tools; professional hair products; salon services, including hair, skin, makeup, and brow services; and nail services.


It also provides its private label products, such as the Ulta Beauty Collection branded cosmetics, skincare, and bath products, as well as Ulta Beauty branded products; and the Ulta Beauty branded gifts.As of March 10, 2022, the company operated 1,308 retail stores across 50 states.It also distributes its products through its website ulta.com; and mobile applications.


The company was formerly known as Ulta Salon, Cosmetics & Fragrance, Inc.and changed its name to Ulta Beauty, Inc.in January 2017.


Ulta Beauty, Inc.was incorporated in 1990 and is based in Bolingbrook, Illinois.

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1.b. Last Insights on ULTA

Ulta Beauty's recent performance is driven by strong sales growth, expanding margins, and strategic execution. The company's Q2 sales reached $2.8 billion, with 6.7% comp growth, and gross margin expanded 90 bps to 39.2%, driven by lower shrink and sharper merchandising execution. New product innovation, including 43 new brands in 1H25, has attracted new customers and boosted cross-category spending. A recent upgrade to "Buy" rating by analysts cites improving trends, disciplined leadership, and focus on product innovation as key drivers.

1.c. Company Highlights

2. Ulta Beauty's Strong Q2 Earnings: A Testament to its Unleashed Strategy

Ulta Beauty's second-quarter 2025 earnings report was a resounding success, with the company posting a 9.3% increase in net sales to $2.8 billion, driven by a 6.7% increase in comparable sales. The company's operating profit margin stood at 12.4%, with diluted earnings per share (EPS) coming in at $5.78, significantly beating estimates of $5.03. The strong EPS performance was a notable highlight, representing a 9.1% increase from the previous year. Gross margin expanded 90 basis points to 39.2% of sales, primarily due to lower inventory shrink and higher merchandise margin.

Publication Date: Aug -29

📋 Highlights
  • Net Sales Growth:: Q2 net sales rose 9.3% to $2.8 billion, driven by 6.7% comp sales growth and market share gains.
  • Operating Profit Margin:: Maintained a 12.4% operating margin, with $345 million operating profit, despite 50 bps margin contraction.
  • Loyalty Program Expansion:: Achieved 45.8 million loyalty members, a record, supporting comp growth across all channels and categories.
  • Strategic International Push:: Acquired UK retailer Space NK and plans new stores in Mexico and the Middle East, targeting 50–56 new US stores annually.
  • Digital & Personalization Investments:: Launched a curated online marketplace in Q3, leveraging loyalty points and personalized engagement to boost guest retention.

Operational Excellence and Strategic Initiatives

The company's CEO, Kecia Steelman, attributed the strong performance to the team's focus on core business growth, driven by operational excellence, marketing leadership, and merchandising innovation. Fragrance led the way with robust double-digit growth, followed by skin care and wellness, makeup, and hair care. The company is also making progress in advancing its brand-building and digital and personalization efforts, including the launch of its online marketplace initiative in the third quarter.

Valuation and Growth Prospects

With a P/E Ratio of 19.09 and an EV/EBITDA of 13.0, the market appears to be pricing in a certain level of growth for Ulta Beauty. The company's return on invested capital (ROIC) stands at 26.28%, indicating a strong ability to generate returns on its investments. As the company continues to execute its Ulta Beauty Unleashed strategy, investing in its operating model and positioning for sustainable growth, analysts estimate next year's revenue growth at 4.1%. The company's guidance for 2025 expects consolidated net sales to be between $12 billion and $12.1 billion, with comparable sales growth in the range of 2.5% to 3.5%.

International Expansion and Future Plans

The company's recent acquisition of UK specialty beauty retailer Space NK provides a unique opportunity for international expansion, with plans to open its first store in Mexico and the Middle East later this year. The company is also exploring other international expansion opportunities, including licensing, franchising, or joint ventures. As Ulta Beauty continues to execute its plans with excellence and build on its momentum, it is well-positioned to drive future growth and create value for its shareholders.

3. NewsRoom

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Ulta Beauty, Inc. (ULTA) Q3 2026 Earnings Call Transcript

01:38

Source: seekingalpha.com

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Ulta (ULTA) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

00:31

Source: zacks.com

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Ulta Beauty (ULTA) Q3 Earnings and Revenues Beat Estimates

Dec -04

Source: zacks.com

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Markets Flatten on Waning Rate Cut Exuberance

Dec -04

Source:

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Market Today: WBD Sale Bids, Meta Cuts, Apple Shake-Up

Dec -04

Source: gurufocus.com

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Ulta Beauty lifts annual forecasts on demand for cosmetics

Dec -04

Source: reuters.com

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Ulta Stock Jumps After Q3 Earnings Beat Estimates: Details

Dec -04

Source: benzinga.com

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Ulta Beauty Boosts Fiscal-Year Guidance as Third-Quarter Sales Climb

Dec -04

Source: wsj.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.21%)

6. Segments

Cosmetics

Expected Growth: 8%

Ulta Beauty's 8% growth in cosmetics is driven by increasing demand for premium and niche brands, expansion of online presence, and strategic partnerships. Additionally, the company's loyalty program, Ultamate Rewards, contributes to repeat business and customer retention. Furthermore, the growing popularity of skincare and makeup among younger generations, particularly Gen Z, fuels sales growth.

Haircare Products and Styling Tools

Expected Growth: 6%

Ulta Beauty's 6% growth in haircare products and styling tools is driven by increasing demand for premium and natural products, rising popularity of e-commerce and social media influencer marketing, expanding product offerings in curly and textured hair, and growing interest in at-home hair coloring and styling. Additionally, the company's loyalty program and strategic partnerships with popular brands contribute to the segment's growth.

Skincare

Expected Growth: 9%

Uptick in skincare sales at Ulta Beauty driven by increasing consumer focus on self-care, rising demand for natural and organic products, and growing popularity of skincare routines among younger generations. Additionally, Ulta's loyalty program, Ultamate Rewards, and strategic partnerships with popular skincare brands contribute to the 9% growth.

Fragrance and Bath

Expected Growth: 5%

Ulta Beauty's Fragrance and Bath segment growth is driven by increasing demand for premium and niche fragrances, expansion of online sales, and strategic partnerships with popular brands. Additionally, the rise of wellness and self-care trends, as well as the growing popularity of experiential retail, contribute to the segment's 5% growth.

Services

Expected Growth: 4%

Ulta Beauty's 4% growth is driven by increasing demand for premium beauty products, expansion of e-commerce capabilities, and strategic partnerships with popular brands. Additionally, the company's loyalty program and in-store experience enhancements contribute to customer retention and acquisition. Furthermore, the growing trend of self-care and wellness also fuels the demand for Ulta's services.

Accessories and Other

Expected Growth: 7%

Ulta Beauty's Accessories and Other segment growth of 7% is driven by increasing demand for beauty tools, travel-sized products, and gift sets. Strong sales of hair accessories, cosmetics bags, and skincare devices contribute to growth. Additionally, the rise of e-commerce and omnichannel retailing enables customers to easily purchase these items, further boosting segment growth.

7. Detailed Products

Skincare

Ulta Beauty offers a wide range of skincare products, including cleansers, moisturizers, serums, and masks from various brands, catering to different skin types and concerns.

Haircare

Ulta Beauty provides a vast selection of haircare products, including shampoos, conditioners, styling products, and hair color, from popular brands, suitable for different hair types and textures.

Makeup

Ulta Beauty offers an extensive range of makeup products, including foundation, eyeshadow, mascara, lipstick, and more, from various brands, catering to different skin tones and preferences.

Fragrances

Ulta Beauty carries a wide selection of fragrances from popular brands, including perfumes, colognes, and body sprays, suitable for both men and women.

Tools and Accessories

Ulta Beauty offers a variety of tools and accessories, including brushes, sponges, tweezers, and more, from popular brands, designed to help customers achieve professional-looking results at home.

Salon Services

Ulta Beauty provides a range of salon services, including haircuts, color treatments, and waxing, performed by trained professionals in-store.

8. Ulta Beauty, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ulta Beauty, Inc. has a low threat of substitutes due to its strong brand recognition and loyalty programs, making it difficult for customers to switch to alternative products or services.

Bargaining Power Of Customers

Ulta Beauty, Inc. has a medium bargaining power of customers due to the presence of online retailers and specialty beauty stores, which gives customers some bargaining power, but the company's loyalty programs and strong brand recognition mitigate this power.

Bargaining Power Of Suppliers

Ulta Beauty, Inc. has a low bargaining power of suppliers due to its large scale of operations and strong relationships with suppliers, giving it negotiating power to secure favorable prices and terms.

Threat Of New Entrants

Ulta Beauty, Inc. has a medium threat of new entrants due to the high capital requirements and regulatory hurdles in the beauty industry, but the rise of e-commerce and social media has made it easier for new entrants to gain traction.

Intensity Of Rivalry

Ulta Beauty, Inc. operates in a highly competitive industry with many established players, leading to a high intensity of rivalry, with companies competing on price, product offerings, and customer experience.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 45.61%
Debt Cost 3.95%
Equity Weight 54.39%
Equity Cost 10.70%
WACC 7.62%
Leverage 83.84%

11. Quality Control: Ulta Beauty, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ulta Beauty

A-Score: 5.5/10

Value: 3.4

Growth: 7.7

Quality: 6.5

Yield: 0.0

Momentum: 9.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Bath & Body Works

A-Score: 5.0/10

Value: 8.8

Growth: 4.2

Quality: 6.1

Yield: 5.0

Momentum: 2.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Sally Beauty Holdings

A-Score: 4.5/10

Value: 7.7

Growth: 3.3

Quality: 5.1

Yield: 0.0

Momentum: 8.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
e.l.f. Beauty

A-Score: 4.4/10

Value: 0.8

Growth: 9.6

Quality: 7.1

Yield: 0.0

Momentum: 7.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Estee Lauder

A-Score: 2.9/10

Value: 3.3

Growth: 1.7

Quality: 2.7

Yield: 2.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Coty

A-Score: 2.8/10

Value: 6.4

Growth: 3.1

Quality: 2.8

Yield: 0.0

Momentum: 0.5

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

605.86$

Current Price

605.86$

Potential

-0.00%

Expected Cash-Flows