Got story updates? Submit your updates here. ›
Ulta Beauty’s strategic investments in e-commerce and virtual try-on technology have helped the beauty retailer weather economic uncertainty by catering to consumers’ desire for small indulgences.Bolingbrook Today
As rising oil prices and economic volatility squeeze consumer spending, Ulta Beauty is proving resilient by catering to shoppers’ desire for small indulgences. The company’s strategic investments in e-commerce, virtual try-on technology, and supply chain automation are positioning it for long-term growth, even as broader demand feels the pinch.
Why it matters
Ulta Beauty’s ability to thrive in the face of economic headwinds highlights the power of the ‘lipstick effect,’ where consumers cut back on big-ticket purchases but still find room for small feel-good purchases. This resilience makes Ulta an attractive investment option for those looking to protect their portfolios from broader market volatility.
The details
Ulta Beauty’s fourth quarter fiscal 2025 results showed demand holding firm, with comparable sales rising 5.8% driven by a 4.2% jump in average ticket and a 1.6% increase in transactions. However, the company’s operating income fell 7.6% and net income dropped 9.3% due to a 23.4% surge in SG&A expenses as Ulta invested in modernizing its supply chain and expanding its virtual try-on and TikTok shop capabilities.
Ulta Beauty reported its fourth quarter fiscal 2025 results on March 12, 2026.The company expects fiscal year 2026 net sales to grow between 6% and 7%, with diluted EPS landing between $28.05 and $28.55.
The players
Ulta Beauty
The largest specialty beauty retailer in the U.S., serving as a one-stop shop for cosmetics, fragrance, skin care, hair care, wellness, and salon services. The company has 1,505 locations across the country and a market cap of $23.3 billion.
Kecia Steelman
The CEO of Ulta Beauty, who has been leading the company’s ‘Ulta Beauty Unleashed’ strategy reset and leadership buildout.
John San Marco
An analyst at Neuberger Berman, an investment management firm, who has analyzed the impact of rising gas prices on consumer spending and Ulta Beauty’s resilience.
Got photos? Submit your photos here. ›
What they’re saying
“The surge in gas prices has wiped out the tax benefit for roughly two-thirds of consumers. However, higher income groups still land on their feet, enjoying the refund tailwind as tax law changes are tilting the scales in their favor and keeping them relatively insulated from rising fuel costs.”
— John San Marco, Analyst
“When push comes to shove, people may skip the splurge but still grab a feel-good purchase, and Ulta sits right in that sweet spot.”
— John San Marco, Analyst
What’s next
Analysts expect Ulta Beauty’s earnings to continue growing, with first-quarter fiscal 2026 EPS expected to rise 3.9% year-over-year and full-year fiscal 2026 and 2027 earnings projected to climb 11% each year.
The takeaway
Ulta Beauty’s strategic investments in e-commerce, virtual try-on, and supply chain automation have positioned the company to thrive even as broader consumer spending feels the pinch of economic uncertainty. The ‘lipstick effect’ is driving shoppers to seek small indulgences, making Ulta an attractive investment option for those looking to protect their portfolios.
