Ulta Beauty is kicking off fiscal year 2025 on a high note, reporting better-than-expected results for its first quarter and confidently raising its full-year revenue outlook, signaling strength in a beauty sector facing mixed results.
In the three months ended May 3, 2025, Ulta Beauty reported net sales of $2.8 billion, a 4.5% year-over-year increase that beat analyst expectations of $2.7 billion. The positive earnings triggered an 8.4% surge in after-hours trading, reflecting investor optimism around the retailer’s updated strategy and performance.
The company also raised its full-year guidance, projecting $11.7 billion in revenue, up from its earlier forecast of $11.6 billion.
“Fiscal 2025 is off to an encouraging start,” said CEO Kecia Steelman. “Our ‘Ulta Beauty Unleashed’ strategy is energizing our teams and fueling growth.”
Strategy in Action: 'Unleashed' Plan Gains Momentum
Unveiled in March 2025, Ulta’s ‘Unleashed’ growth strategy was introduced as a proactive response to slowing sales trends. The multi-pronged plan includes:
-
Streamlining leadership
-
Improving in-store experience and inventory
-
Diversifying its brand portfolio in beauty and wellness
Steelman emphasized the company’s agility amid economic uncertainty:
“The operating environment is fluid. But our model uniquely positions us to win.”
Category Performance: Fragrance, Skincare & Wellness Surge
While the overall beauty market is showing signs of caution, Ulta’s fragrance category emerged as a standout performer, growing 11% year-over-year. This momentum was largely driven by a mix of trending and celebrity-backed launches including XO Khloé by Khloé Kardashian, Billie Eilish, Valentino, and gender-neutral brands.
Skincare and wellness sales jumped 25%, with consumer interest high in bodycare, suncare, and wellness solutions. Brands like Tatcha, Naturium, Inua, Sol de Janeiro, and cult favorite Touchland led the charge.
Despite this, prestige skincare was flat, and mass skincare saw a slight decline, suggesting ongoing softness in the category.
In contrast, haircare sales dropped 1%, but were bolstered by high-performing subcategories such as hair tools and premium mass offerings, particularly those featuring Dyson, Shark Beauty, Olaplex, and the retail debut of Beyoncé’s Cecred line.
Cosmetics remain a pressure point, down 2% year-over-year. However, Steelman pointed to green shoots:
“We saw strength from new and exclusive offerings — including Ilia, Milk Makeup, Dibs, and limited launches from MAC and Lancôme.”
Services, including hair salons, held steady, contributing 4% of net sales.
E-commerce and App-Driven Growth
Ulta’s e-commerce channel continued to shine, with comparable sales increasing 2.9%. Over 60% of online sales were made via the Ulta Beauty app, showcasing the retailer’s strong mobile engagement.
Marketing Muscle: Beyoncé, Super Bowl, and Beauty Festivals
Marketing efforts helped drive brand engagement across both digital and in-store touchpoints. Highlights include:
-
A record-breaking Super Bowl campaign, focused on celebrating women in sports
-
The first-ever Ulta Beauty World festival, which elevated community engagement
-
A major sponsorship of Beyoncé’s “Cowboy Carter” tour, with exclusive product drops and curated beauty looks available in-store
These activations helped Ulta stay culturally relevant and reach a broad, beauty-obsessed audience.
Challenges Ahead: Tariffs & Consumer Uncertainty
CFO Paula Ojibow struck a cautiously optimistic tone. While Q1 performance was strong, she warned that “one quarter does not make a trend,” and flagged potential headwinds from rising tariffs and waning consumer confidence heading into the second half of the year.
“We’re mindful of consumer pressures and the evolving global trade landscape,” she said.
Steelman added that Ulta will continue to invest in the in-store experience, exclusive brand innovation, and bold marketing to navigate uncertainty.
“It’s about staying focused and controlling what we can in a rapidly changing environment,” she concluded.
