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Ulta Beauty’s net sales grew 9.3 per cent year-on-year to $2.8 billion in the second quarter of 2025, ended 2 August, driven by store openings, better comparable sales and the acquisition of British retailer Space NK.
“Outstanding top-line performance, fuelled by growth across all major categories, drove market share growth and better-than-expected profitability,” said Kecia Steelman, Ulta president and CEO, in a statement. “I am proud of the Ulta Beauty team’s collective efforts to deliver great guest experiences in stores and across our digital channels.”
Gross profit increased 11.6 per cent year-on-year and gross margin inched up from 38.3 per cent in Q2 last year to 39.2 per cent this year, due to more accurate inventory management and higher merchandise margins, which offset heightened supply chain costs. In the first half of 2025, net sales increased 6.8 per cent year-on-year to $5.3 billion.
The Illinois-based company, which sells a mixture of high-end and mass-market beauty brands including Chanel, Drunk Elephant and Fenty Beauty, now expects full-year net sales in the range of $12-$12.1 billion, compared to its prior outlook of $11.5-$11.7 billion. This reflects the early positive impact of acquiring Space NK, which marked its entry into the UK market, the company said.
Ulta’s performance puts it ahead of the pack. Earlier this month, Estée Lauder Companies (ELC) said its sales dropped 8 per cent in fiscal 2025, while Coty’s revenues fell 2 per cent during the same period. L’Oréal Group’s second-quarter sales, which it reported at the end of July, rose 2.4 per cent. Across the beauty sector, tariffs have impacted sourcing throughout the global supply chain and have dampened consumer sentiment.
“As we look to the future, we remain committed to executing our Ulta Beauty ‘Unleashed’ strategy and strengthening our operating model,” said Steelman. “Our outlook for the remainder of the year reflects both the strength of our year-to-date performance and our caution around how consumer demand may evolve in the second half of the year. While near-term uncertainty persists, we’re staying focused on what we can control and on executing with excellence to deliver our uniquely Ulta Beauty experience.”
Fragrance was the best-performing category in Q2, delivering double-digit growth, while the skincare and wellness category increased high single digits, led by bodycare and wellness, K-Beauty, and supplements. The makeup category delivered mid-single-digit comparative growth, with strong performance from Mac, Hourglass and Nyx.
Ulta announced earlier this month that its shop-in-shop partnership with Target will end in August 2026. “For perspective, the royalty revenue from our Target partnership in fiscal 2024 was well below 1 per cent of net sales,” Steelman said during the earnings call.
The CEO highlighted that engagement with beauty and wellness remains healthy despite macro uncertainty. “Our insights suggest consumers continue to prudently manage their day-to-day spending and are watchful of pricing trends in response to tariffs,” she said on the call. “At the same time, beauty enthusiasts tell us that they’re prioritising their beauty regimens and remain strongly engaged with the category. While we continue to manage the business thoughtfully amid ongoing macroeconomic uncertainty, we believe beauty and wellness offer a unique sense of comfort and escape, which we expect will continue to support the beauty category’s resilience.”
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