BOLINGBROOK, August 27, 2026, 18:30 (EDT) — Ulta Beauty (ULTA.O) stock dropped 2.9% in after-hours trading despite the company raising its outlook.
- Shares of Ulta Beauty declined 2.89% in after-hours trading to $524.47.
- Sales for the quarter increased by 8.9% to $3.036 billion, surpassing the LSEG consensus forecast.
- Full-year EPS outlook raised to $28.70–$29.00.
- The company increased its fiscal-2026 share buyback program to $1.8 billion.
Ulta Beauty shares declined 2.89% in after-hours trading on Thursday, erasing gains seen earlier following the company’s release of higher sales and profit outlooks.
The turnaround prioritizes margins over the headline results. While sales and operating income advanced, gross margin decreased by 10 basis points due to the business mix shift from acquiring Space NK.
Ulta Beauty (NASDAQ: ULTA) posted second-quarter net sales of $3.036 billion, an increase of 8.9% compared to the previous year, surpassing the LSEG consensus by about $76 million.
Comparable sales climbed 3.8%, exceeding the 2.3% figure forecast by Reuters. Diluted earnings per share grew 13.3% to $6.55, compared with the consensus of $6.19.
| Metric | Q2 FY2025 | Q2 FY2026 | Change |
|---|---|---|---|
| Net sales | $2.788 billion | $3.036 billion | up 8.9% |
| Comparable sales | 6.7% | 3.8% | down 290 bp |
| Gross margin | 39.2% | 39.1% | down 10 bp |
| Operating income | $344.9 million | $379.6 million | up 10.1% |
| Diluted EPS | $5.78 | $6.55 | up 13.3% |
The company has updated its forecast for fiscal-2026 sales growth to between 6.7% and 7.2%, up from its earlier projection of 6% to 7%.
The forecast for comparable sales increased to 3.2%–3.7%, up from the previous 2.5%–3.5%. The range for operating-income growth moved higher to 8.3%–9.3% from 6.5%–9%.
Full-year EPS forecast was raised to a range of $28.70–$29.00. The new midpoint is 0.94% higher than the previous midpoint, marking a less significant rise than the most recent quarterly earnings beat.
This gap accounts for the movement in the stock. Prior to the report, investors were valuing Ulta at 20.2 times its trailing earnings.
The company raised its targeted share buybacks for fiscal-2026 to $1.8 billion, up from the previous $1.5 billion goal. In the first half, Ulta purchased 1.4 million shares for $791.1 million.
Actual liquidity remains more constrained than the headline capital return figure indicates. Cash at quarter-end totaled $158.5 million, with short-term debt standing at $339.6 million. Inventory was steady, hovering around $2.4 billion.
Ulta CEO Kecia Steelman said the company’s strategy was delivering clear benefits for guests. Shoppers with higher incomes, as well as younger consumers, maintained their purchases of fragrances and makeup even as consumer confidence remained subdued.
Trading volume during the regular session totaled 1.23 million shares, which is approximately 2.1 times the usual average. Following hours trading wiped out nearly $670 million from the closing market capitalization of $23.22 billion.
Wall Street sentiment stayed positive ahead of the release. According to Google Finance, there were 17 buy ratings, four holds, and one sell, with an average 12-month price target of $625.10.
Risks: Lower discretionary spending may reduce beauty demand. Factors such as Space NK’s product mix, tariffs, promotions, inventory management, and debt-financed buybacks could affect margins or cash flow.
