Ulta Beauty's stock heads for worst day in 2 years as consumers get pickier about cosmetics

By Bill Peters

CEO says beauty industry remains competitive, after the chain last year tried to focus more on wellness and online sales

Ulta Beauty reported quarterly results on Thursday.

Shares of Ulta Beauty were falling in early Friday trading, after the cosmetics retailer forecast a profit and same-store sales for this year that were below Wall Street's estimates, adding that it expects more selective consumer spending and that it was "increasingly mindful" of conflicts abroad.

Ahead of earnings reported late Thursday, some analysts said Ulta (ULTA) could stay cautious on the consumer backdrop, as the U.S. and Israel's attacks on Iran, the U.S.-led trade war and other geopolitical tensions threaten to push prices higher and keep shoppers cautious.

Nonetheless, the stock dropped 7.5% in premarket trading, enough to make it one of the S&P 500 index's SPX top decliners ahead of the open, and to put it on track for its biggest selloff since it sank 15.3% on April 3, 2024. The selloff comes after the stock had soared 98.7% over the past 12 months through Thursday.

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The company made its forecasts after it spent last year trying to improve store displays, while focusing more on expanding into wellness and refining its approach to online sales. Ulta has faced deeper threats from retail giants like Walmart (WMT) and Amazon (AMZN), who have expanded their beauty-product offerings.

Ulta said it expects earnings per share of $28.05 to $28.55, below FactSet forecasts for $28.64. The company forecast same-store sales growth of 2.5% to 3.5%, with the midpoint below estimates for a 3.5% gain.

Ulta said it expects revenue gains of 6% to 7%. The midpoint of that range was above forecasts for around 6.1% growth.

CEO Kecia Steelman, during Ulta's earnings call, said the pickier consumer sentiment seen last year would likely be alive and well this year.

She said that through last year, shoppers showed "continued resilience, strong focus on value and affordability, and increasing discernment in spending decisions."

"At the same time, engagement with the beauty category remained healthy and the landscape remained competitive," she continued. "We expect these themes to continue into fiscal 2026, though we are increasingly mindful of rising global conflicts that could impact economic conditions."

For the fourth quarter, Ulta reported sales of $3.89 billion, with a 5.8% same-store sales gain. Both were above Wall Street's estimates. The company's earnings per share came in at $8.01, below estimates for $8.10.

-Bill Peters

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03-13-26 0738ET