:max_bytes(150000):strip_icc()/GettyImages-2249178666-2a763d0ef3924d1b8c1de2d3bce0a79d.jpg "This Beauty Retailer’s Stock Is Leading the S&P 500 Higher Friday. Here’s Why")
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Key Takeaways
- Ulta Beauty posted better-than-expected quarterly results, with sales getting a boost from increasing transactions and higher average spending.
- The beauty retailer also boosted its full-year outlook.
Ulta Beauty (ULTA) shares surged to a record high on Friday after the cosmetics and fragrance retailer posted earnings that topped analysts’ estimates and raised its outlook.
The stock was up over 14% in recent trading, on track to finish the week at an all-time high and leading gains in the S&P 500. (Read our daily markets coverage here.)
Ulta Beauty reported third-quarter earnings per share of $5.14 on revenue that jumped 12.9% year-over-year to $2.86 billion. Both figures exceeded analysts’ expectations as the beauty retailer said its growth strategy and purchase of British luxury cosmetics seller Space NK were paying off.
Comparable store sales climbed 6.3%, boosted by a 3.8% rise in average ticket and a 2.4% increase in transactions. The company said its revenue gain was primarily driven by those higher comparable sales, the acquisition of Space NK, and the addition of new stores.
Why This Is Significant
Beauty has been among retail’s most resilient categories, outperforming apparel and other goods as consumers continue to spend on cosmetics, fragrances, and skin care. Ulta’s strong traffic, higher ticket values, and improved guidance suggest resilient demand while other parts of retail struggle to attract anxious consumers.
“Exciting assortment newness, improved in-store and digital experiences, and bold marketing efforts are resonating with our guests,” said Ulta CEO Kecia Steelman.
Ulta and Victoria’s Secret (VSCO), which also reported better-than-expected earnings Friday, may be benefiting from the so-called “lipstick effect,” which describes the consumer’s tendency to maintain spending on smaller indulgences like cosmetics and lingerie even when broader economic conditions are uncertain.
Ulta Beauty now sees full-year EPS of $25.20 to $25.50, and sales of about $12.3 billion. Previously, it anticipated EPS in the range of $23.85 to $24.30, and sales of $12 billion to $12.1 billion.
With Friday’s gains, shares of Ulta Beauty have added nearly 40% of their value in 2025.
