Ulta Beauty Overcomes Rivals With Advantages in Product Selection, Stores, and Consumer Loyalty
We think Ulta Beauty’s brand strength provides a narrow moat and has allowed the company to thrive despite economic conditions and other external challenges. Over the past decade, Ulta has become the largest specialty beauty retailer in the United States through store openings, product and brand introductions, improved marketing, and—with more than 47 million active members—an enhanced loyalty program. Annual revenue increased to more than $12 billion in 2025 from $912 million in 2007 as Ulta grew its US store base to more than 1,500 stores from fewer than 300, its shops became more productive, and online selling became a major part of its business. Ulta's success has made it a desirable partner for prestige, mass, and emerging beauty brands. While the firm faces intense competition and is affected by innovation and product cycles in cosmetics, we think it has developed a following that has allowed it to take share from mall-based stores while competing effectively against wide-moat Amazon and other e-commerce. We believe that teen girls and women like to sample products in Ulta’s stores and that its salons, selection, promotions, and service encourage frequent visitation.
United States