Ulta Beauty (ULTA) Stock Drops 8% as Guidance Takes the Shine Off a Strong Quarter

TLDR

• Ulta Beauty beat Q4 revenue estimates at $3.90B vs $3.80B expected, but missed on EPS with $8.01 vs $8.03 expected.
• Net sales grew 11.8% year over year in Q4, driven by comparable sales growth of 5.8%.
• Fiscal 2026 guidance came in soft — EPS of $28.05–$28.55 vs analyst estimates of $28.40–$28.57.
• Selling, general and administrative expenses jumped 23% to $1 billion, driven by higher corporate overhead and advertising spend.
• Raymond James reiterated a Strong Buy rating, calling any further drop a buying opportunity.

Ulta Beauty (ULTA) posted a mixed fourth-quarter earnings report on Thursday, beating on revenue but missing on earnings per share — and it was the soft 2026 outlook that sent the stock sliding roughly 8% in after-hours trading.

For the quarter ended January 31, Ulta reported revenue of $3.90 billion, topping Wall Street’s estimate of $3.80 billion. EPS came in at $8.01, just short of the $8.03 that analysts had pencilled in.

Ulta Beauty, Inc., ULTA

Comparable sales grew 5.8% in the quarter. That was helped by a 4.2% rise in average ticket and a 1.6% increase in transactions.

Net sales climbed 11.8% year over year. The growth was driven by stronger comparable sales, the acquisition of Space NK, and contributions from new store openings.

For the full fiscal 2025 year, Ulta reported net sales of $12.4 billion, a 9.7% increase from the prior year.

Guidance Disappoints

The real hit came from the company’s outlook. For fiscal 2026, Ulta guided for net sales growth of 6% to 7%, with comparable sales growth of 2.5% to 3.5%.

On the EPS front, Ulta projected $28.05 to $28.55 for fiscal 2026. The midpoint of $28.30 came in slightly below the analyst consensus of around $28.40 to $28.57.

Tong kept her Strong Buy rating on the stock, calling any further drop “a buying opportunity.”

Costs Rise

Gross profit rose 11.2% to $1.5 billion, though gross margin edged down slightly to 38.1% from 38.2% a year earlier. The company attributed the pressure to an unfavorable sales mix and higher store-related costs, partly offset by lower inventory shrink and supply chain efficiencies.

Selling, general and administrative expenses jumped 23% to $1 billion. That increase was driven by higher corporate overhead tied to strategic investments, increased advertising spend, and higher incentive compensation.

CEO Kecia Steelman pointed to execution and new merchandising strategies as drivers of the quarter’s results. She noted the company’s focus on delivering better guest experiences through “compelling newness” and “more seamless and convenient” offerings.

This was the first earnings report since Christopher DelOrefice joined as CFO in early December.

Oppenheimer analysts had gone into the report expecting “solid” Q4 results, and on the top line at least, Ulta delivered. The stock’s decline appears to hinge squarely on whether the 2026 guidance reflects a conservative setup or a genuine moderation in growth.

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