Ulta Beauty (NASDAQ: ULTA) Beats Q2 2026 With $6.55 EPS, Raises Full-Year Guidance

Q2 2026 Results

Ulta Beauty (NASDAQ: ULTA) reported second-quarter fiscal 2026 diluted EPS of $6.55, a 13.3% increase from $5.78 in the year-ago period, as net sales rose 8.9% to $3.04 billion from $2.79 billion. The company simultaneously raised its full-year financial guidance, citing confidence in its strategic priorities and first-half execution.

• Net sales: $3.04 billion, up 8.9% year-over-year, driven by comparable sales growth, the Space NK acquisition, and new store openings
• Comparable sales: increased 3.8%, compared to 6.7% in Q2 2025
• Operating income: $379.6 million, up 10.1% year-over-year, with operating margin expanding 10 basis points to 12.5%
• Diluted EPS: $6.55, up 13.3% from $5.78
• Gross margin: 39.1% for the quarter, a modest 10 basis point decline from 39.2% in the prior-year period, reflecting the Space NK business mix
• Capital expenditures (first half): $139.5 million, directed at new stores, relocations, remodels, and information technology

What Drove the Results

Revenue growth of 8.9% and operating income growth of 10.1% moved in tandem, with SG&A leverage more than offsetting a modest gross margin compression. SG&A expenses rose 8.2% to $802.8 million, but as a percentage of net sales, SG&A decreased to 26.4% from 26.6%, reflecting operating discipline as the company absorbed costs tied to the Space NK acquisition. Gross profit increased 8.7% to $1.19 billion in absolute terms, even as the gross margin rate edged down 10 basis points to 39.1%, primarily attributed to the impact of the Space NK business mix.

Net income for the quarter reached $282.0 million, up from $260.9 million a year earlier. The company ended the quarter with $158.5 million in cash and cash equivalents and $55.0 million in short-term investments. Merchandise inventories of $2.4 billion were essentially flat year-over-year, reflecting improved inventory management partially offset by inventory supporting new brand launches and store openings.

Guidance Raised Across All Key Metrics

Ulta Beauty raised its fiscal 2026 outlook on every key financial line. The company now expects full-year diluted EPS of $28.70 to $29.00, up from prior guidance of $28.36 to $28.80. Net sales growth guidance was tightened and raised to 6.7%-7.2% from the prior range of 6%-7%. Comparable sales growth was revised upward to 3.2%-3.7% from 2.5%-3.5%, and operating income growth guidance was updated to 8.3%-9.3% from the prior 6.5%-9.0%. Capital expenditure guidance remains unchanged at $400 million to $450 million for the full year.

On capital returns, the company increased its fiscal 2026 stock repurchase plan to $1.8 billion from $1.5 billion. During the first six months of fiscal 2026, Ulta repurchased 1.4 million shares at a cost of $791.1 million, excluding excise taxes. As of August 1, 2026, $1.0 billion remained under the current $3.0 billion share repurchase authorization announced in October 2024, and the company expects to deploy that full remaining amount by fiscal year-end.

"Our team delivered another impressive quarter of strong sales, profit, and earnings growth, demonstrating that we are executing with discipline and translating our Ulta Beauty Unleashed strategy into tangible benefits for our guests," said Kecia Steelman, president and chief executive officer.

Wall Street View

Wall Street maintained a broadly constructive stance on Ulta Beauty heading into the print, with analyst consensus skewed toward buy-side ratings as of early August 2026. The raised guidance and consistent operational execution across both revenue and operating income lines provide a concrete basis for the constructive view, particularly given the company's ability to expand operating margin while integrating Space NK.

Investor Takeaway

Ulta's Q2 result is notable not just for the headline EPS growth of 13.3%, but for the operating leverage it shows: SG&A as a share of revenue declined even as the company absorbed Space NK integration costs, pointing to a scalable cost structure. The raised repurchase plan, now at $1.8 billion for the fiscal year with the remaining $1.0 billion of the current $3.0 billion authorization targeted for deployment by year-end, adds a return-of-capital dimension that could support per-share earnings growth beyond operational gains. Shares traded at $540.10 on Thursday, August 27, while the S&P 500 gained 0.66%.