The one thing people are still buying? Beauty products, and Ulta just proved it.

By Claudia Assis

Ulta's stock closes at a record high

A Ulta Beauty store in New Hartford, N.Y. The company is benefiting from a shift to "masstige."

Shares of Ulta Beauty Inc. ended at a record high Friday after the beauty products retailer raised its sales outlook for the year and reported quarterly earnings miles ahead of Wall Street expectations, a sign of that people are still willing to spend on cosmetics and hair products even as they cut down elsewhere.

The company is primed to benefit from its "masstige," or its mix of mass-produced and prestige offerings as consumers crave premium quality at value prices, Jefferies analyst Ashley Helgans said in a note leading up to Thursday's results. Morgan Stanley analysts had already detected that the beauty category was staying "healthy."

Underscoring that sentiment, Victoria's Secret (VSCO), which reported earnings earlier Friday, highlighted its beauty products as one of its successes in the quarter.

Late Thursday, Ulta (ULTA) upped its guidance for same-store sales to be 4.4% to 4.7% higher for the year, compared with a previous guidance of 2.5% to 3.5% gains and investors' expectations of a 3.7% increase.

Besides the record close, the stock notched its largest one-day percentage increase since March 14, when it rose 14%, and was the best performer on the S&P 500 index. SPX

The shift to "masstige" reflects a broader value mindset, especially among lower-income shoppers seeking affordable luxury, Helgans said. "Masstige, particularly skincare, is expected to remain popular," she said.

Ulta just ran Cyber Monday deals with viral names such as Korean beauty brands Medicube and Anua that fit that profile.

The company also raised its sales outlook for the year to about $12.3 billion, from a previous call of between $12 billion and $12.1 billion. Investors expect sales of around $12.1 billion, according to FactSet.

Ulta reported fiscal third-quarter earnings of $5.14 a share on sales of $2.9 billion, up 13% from a year ago, mostly thanks to a jump in same-store sales in the quarter. Analysts polled by FactSet expected EPS of $4.61 on sales of $2.7 billion.

Ulta's Chief Executive Kecia Steelman said that Ulta's "exciting assortment newness, improved in-store and digital experiences, and bold marketing efforts are resonating with our guests," driving the strong results and market-share gains, with a notable strength in e-commerce.

Comparable-store sales rose 6.3%, driven by a 3.8% increase in average ticket and a 2.4% increase in transactions, Ulta said.

Victoria's Secret, for its turn, reported an adjusted loss of 27 cents a share on sales of of $1.5 billion. Investors expected an adjusted loss of 59 cents a share on sales of $1.4 billion, according to FactSet.

Victoria's Secret also upped its outlook for the year, calling for sales in the range of $6.45 billion to $6.48 billion, compared with a previous guidance of $6.33 billion to $6.41 billion. The company's stores offer a slew of branded fragrances and body care products.

Global market research company Circana said last month that the U.S. beauty industry grew across all metrics in the third quarter.

And for the nine months through September 2025, prestige market sales increased by 4% to $24.1 billion, and units sold were also up 4%, while sales in the mass market increased 5% to $54.5 billion and units sold grew 2%.

"Beauty is in a position to shine this holiday," with a third of consumers planning to gift beauty products, a meaningful increase from last year, Circana said. "The momentum is especially strong among higher-income households and those with children, millennials and Gen Z - who are not only buying for others but also indulging in self-gifting."

-Claudia Assis

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12-05-25 1627ET