Ulta Beauty reported double-digit sales growth in its third quarter of fiscal 2025, driven by higher comparable sales, new store openings and the acquisition of British beauty retailer Space NK, according to results released December 4. The retailer also raised its full-year financial outlook as it heads into the peak holiday selling period.
The results come as cosmetics and personal care manufacturers and suppliers continue to monitor U.S. specialty retail performance for signals on category demand.
Q3 sales growth
Net sales for the third quarter of fiscal 2025 increased 12.9% to $2.9 billion, compared to $2.5 billion in the prior-year quarter. Comparable sales rose 6.3% versus 0.6% a year earlier, driven by an increase in average purchase volume and frequency.
“Our third quarter results exceeded our expectations, reflecting the steady progress and momentum our team is building as we execute our Ulta Beauty Unleashed Strategy,” said Kecia Steelman, president and CEO of Ulta Beauty, in a press statement.
The strategy includes launching new product offerings, improving in-store and digital retail experiences, and experimenting with different marketing efforts, which “drove strong sales results, market share gains and growth across all categories and channels, with notable strength in ecommerce,” she said.
Of note, Ulta’s selling, general and administrative (SG&A) expenses increased 23.3% to $840.9 million. Executives in the earnings call noted this increase was mostly driven by higher incentive compensation, store payroll and benefits, store expenses and amortization of cloud-based software investments.
“We leveraged our advertising as a result of higher topline revenue, and as far as the growth of store payroll expense, its primarily due to additional selling hours to support the guest experience,” said Chris Lialios, interim chief financial officer during the call.
Merchandising strategy points to fiscal 2026 assortment pipeline
Steelman also provided insight into Ulta Beauty’s forward-looking merchandising strategy during the company’s earnings call, outlining early planning for the next fiscal year.
“Our merchandising vision is to really curate and inspire guests with the best beauty and wellness assortment for all life stages,” Steelman said during the call.
“Our merchants have been hard at work in developing their plans for fiscal 2026, we have an exciting pipeline of newness…and its balanced across the portfolio very similar to how this year was,” she said. “Bottom line, I feel really great about what I’m seeing for 2026.”
She also addressed longer-term growth expectations as the company updates its near-term outlook.
“This is a great position to be in because we’re outperforming what the original plan was, and while our guidance for 2025 now is between 12.3 and 12.4% as we’re looking at 2026 we’re focused on building a plan that really positions us to deliver against our long-term targets,” she explained.
Store footprint expansion
Ulta Beauty opened 28 new stores during the third quarter and remodeled 15 stores, while closing one location. For the first nine months of the fiscal year, the retailer opened 58 new stores, relocated four stores, remodeled 24 locations and closed three.
At the end of the third quarter, the company operated 1,500 Ulta Beauty stores totaling 15.6 million square feet across the US, excluding the 84 stores in the U.K. and Ireland operated by Space NK.
Ulta raises full-year fiscal 2025 guidance
The company increased its fiscal 2025 outlook following the third quarter performance. Updated guidance now calls for approximately $12.3 billion in net sales, compared to the prior range of $12.0 billion to $12.1 billion. Comparable sales are now projected to grow between 4.4% and 4.7%, up from the prior range of 2.5% to 3.5%.
