Ulta Beauty, the largest beauty retailer in the United States, has reported second-quarter results that surpassed analyst expectations and led the company to lift its full-year outlook for fiscal 2025. The performance reflects steady demand across its product lines and continued momentum from international expansion efforts, including the acquisition of UK-based retailer Space NK and new market entries in Mexico and the Middle East.
Key Takeaways
- Strong Q2 Performance: Revenue reached $2.79 billion, up 9.3% year over year. Diluted earnings per share came in at $5.78, topping analyst forecasts. Comparable sales rose 6.7%.
- Raised Full-Year Forecast: Ulta now expects fiscal 2025 net sales of $12.0 billion to $12.1 billion, with EPS projected in the range of $23.85 to $24.30.
- International Strategy: Expansion is moving forward through the Space NK acquisition and planned market entries in Mexico and the Middle East.
- Growth Drivers: All product categories contributed, with fragrances leading growth. Customer loyalty program membership rose 4% to 45.8 million.
Solid Financials Fuel Optimism
The second-quarter performance was broad-based, with gains across cosmetics, skincare, haircare, and fragrances. Fragrance stood out as a top growth driver, delivering double-digit gains supported by new product launches and seasonal promotions.
CEO Kecia Steelman noted that Ulta is returning “back to the basics” through improved store operations, stronger marketing, and thoughtful product selection. The company’s loyalty program also continues to be a major strength, expanding to a record 45.8 million members, a clear sign of customer retention and engagement.
Acquisition of Space NK and Global Growth
Ulta’s long-term strategy increasingly relies on international markets. The acquisition of Space NK provides a direct entry into the United Kingdom. The retailer, known for its curated beauty offering, operates 83 stores in the UK and Ireland. While Space NK will remain a standalone business under its existing leadership, Ulta intends to leverage its scale and resources to support further growth.
The company is also making moves into other global markets. This year, Ulta will open its first stores in Mexico through a partnership with Grupo Axo and is preparing for entry into the Middle East under a licensing deal with Alshaya Group.
Meanwhile, Ulta has decided to end its partnership with Target by August 2026. This will allow management to direct more attention to its own stores and international strategy. Ulta currently operates 1,473 stores across the United States. With the addition of Space NK’s network, its global footprint now exceeds 1,550 stores. Plans are also underway to add around 63 new US locations in fiscal 2025.
Outlook and Market Position
Although Ulta raised its guidance, management acknowledged potential headwinds from consumer spending in the second half of the year. Even so, the outlook reflects confidence in the brand’s resilience and momentum.
Ulta’s ability to serve a wide customer base is central to its market strength. The combination of high-end prestige brands with more accessible options, together with in-store salons and digital platforms, positions the retailer uniquely within the beauty sector.
Looking ahead, Ulta’s financial health, strong loyalty base, and international expansion plans suggest the company is building toward a more global presence while maintaining its leadership at home.
FAQs
Q1. What is Ulta Beauty and what does it sell?
A1. Ulta Beauty is a US-based retailer that sells cosmetics, fragrances, skincare, and haircare products. It carries both prestige (luxury) and mass-market brands and also offers salon services inside its stores.
Q2. Why did Ulta Beauty buy Space NK?
A2. Ulta Beauty acquired Space NK to enter the UK market. The acquisition gives Ulta an established platform to expand its international business and tap into a new customer base.
Q3. What does Ulta Beauty’s international expansion strategy involve?
A3. Ulta’s international expansion includes the recent Space NK acquisition in the UK, as well as planned market entries into Mexico and the Middle East through partnerships. The goal is to drive long-term growth beyond its US market.
Q4. How does Ulta Beauty’s loyalty program work?
A4. The Ulta Beauty Rewards loyalty program is one of the largest in the beauty industry. Members earn points on purchases that can be redeemed for discounts on products and services. The program is a key driver of customer retention.
Q5. What is the difference between prestige and mass-market beauty brands?
A5. Prestige beauty brands are typically high-end, luxury products sold in department stores and specialty retailers. Mass-market brands are more affordable and are sold in drugstores and supermarkets. Ulta is known for selling both types of brands in the same place.
