01—Abstract
Summary
Summary of the 10-Q filed August 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Ulta Beauty, Inc. reported its second quarter of fiscal 2025 (13 weeks ended August 2, 2025) with net sales of $2.79 billiona, up from $2.55 billion a year earlier, and net income of $260.9 million, up from $252.6 million.
Comparable sales rose 6.7%, driven by a 3.7% increase in transactions and a 2.9% increase in average ticket. Gross profit margin improved to 39.2% from 38.3%, primarily due to lower inventory shrink and higher merchandise margin, while SG&A expenses rose to 26.6% of net sales from 25.3%, mainly from higher incentive compensation, store payroll and benefits, and corporate overhead. Diluted EPS was $5.78b versus $5.30.
The company completed its acquisition of Space NK, a U.K. and Ireland luxury beauty retailer, on July 10, 2025, for net assets acquired of $399.2 millionc, including $381.7 million of goodwill. Cash and cash equivalents fell to $242.7 million from $703.2 million at fiscal year-end, while short-term debt rose to $289.1 million. Merchandise inventories increased to $2.41 billion from $1.97 billion, and the company repurchased 1.23 million shares for $472.4 million during the 26 weeks.
Approximately $2.2 billiond remained available under the October 2024 repurchase program. Subsequent to quarter-end, Ulta and Target Corporation mutually agreed not to renew the Ulta Beauty at Target shop-in-shop partnership when the current agreement concludes in August 2026.
The company also entered into Amendment No. 4 to its loan agreement on August 27, 2025, increasing the revolving facility by $200 million to a maximum of $1.0 billion. Management noted that persistent inflation and tariffs could contribute to lower sales trends throughout fiscal 2025.
02—Key points
Key Highlights
- Net sales of $2.79 billion for the 13 weeks ended August 2, 2025, up 9.3% from $2.55 billion, with comparable sales up 6.7%.
- Gross profit margin rose to 39.2% from 38.3%, driven by lower inventory shrink and higher merchandise margin.
- SG&A expenses rose to 26.6% of net sales from 25.3%, primarily from higher incentive compensation, store payroll, and corporate overhead.
- Net income of $260.9 million and diluted EPS of $5.78, compared with $252.6 million and $5.30 a year earlier.
- Space NK acquisition completed July 10, 2025, adding $381.7 million of goodwill and 83 U.K. and Irish stores.
- Cash fell to $242.7 million from $703.2 million at fiscal year-end, while short-term debt rose to $289.1 million.
- Target shop-in-shop partnership will not be renewed when the agreement concludes in August 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Ulta Beauty kept $0.09.
- Revenue$2.79B100.0%
- Cost of revenue−$1.70B60.8%
- Gross profit$1.09B39.2%
- Operating costs−$746.8M26.8%
- Operating income$344.9M12.4%
- Interest, other & tax−$84.0M3.0%
- Net income$260.9M9.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 28, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $2.79B$2.55B | +9.3% |
| Cost of Revenue | $1.70B$1.57B | +7.8% |
| Gross Profit | $1.09B$978.18M | +11.6% |
| SG&A Expenses | $741.74M$644.82M | +15.0% |
| Operating Income | $344.85M$329.20M | +4.8% |
| Net Income | $260.88M$252.56M | +3.3% |
| EPS (Basic) | $5.80$5.32 | +9.0% |
| EPS (Diluted) | $5.78$5.30 | +9.1% |
| Shares Outstanding (Basic) | 44.95M47.51M | −5.4% |
| Shares Outstanding (Diluted) | 45.11M47.67M | −5.4% |
05—Questions
Frequently Asked Questions
How did Ulta Beauty perform in the second quarter of fiscal 2025?
Net sales increased to $2.79 billion from $2.55 billion, and comparable sales rose 6.7%, driven by a 3.7% increase in transactions and a 2.9% increase in average ticket. Net income reached $260.9 million, or $5.78 per diluted share.
What drove the change in profitability?
Gross profit margin improved to 39.2% from 38.3%, mainly due to lower inventory shrink and higher merchandise margin. Partially offsetting this, SG&A expenses rose to 26.6% of net sales from 25.3%, primarily due to higher incentive compensation, store payroll and benefits, and corporate overhead.
What was the significance of the Space NK acquisition?
On July 10, 2025, Ulta acquired 100% ownership of Space NK, a luxury beauty retailer in the U.K. and Ireland, for net assets acquired of $399.2 million, including $381.7 million of goodwill. The filing states the acquisition is not material to the consolidated financial statements.
How did the company's liquidity and capital allocation change?
Cash and cash equivalents declined to $242.7 million from $703.2 million at fiscal year-end, while short-term debt rose to $289.1 million. The company repurchased shares totaling $472.4 million for the 26 weeks, and $2.2 billion remained available under its October 2024 repurchase program.
What events occurred after the quarter ended?
On August 14, 2025, Ulta and Target agreed not to renew the Ulta Beauty at Target shop-in-shop partnership when it concludes in August 2026. On August 27, 2025, the company amended its loan agreement, increasing the revolving facility by $200 million to a maximum of $1.0 billion.
06—Continue