Ulta Beauty has continued to benefit from K-beauty and its acquisition of UK beauty retailer Space NK after recording an 8.9% net sales rise to US$3bn in Q2 2026.

Comparable sales increased 3.8%, and gross profit rose 8.7% to $1.2bn, with the US beauty retailer also benefiting from new store openings during the quarter.

However, as a percentage of net sales, gross profit decreased to 39.1% compared with 39.2% last year, primarily due to the impact of the Space NK on business mix.

Demand for K-beauty also bolstered sales growth during the quarter, Kecia Steelman, Ulta Beauty President and CEO, revealed during an investor call held on 27 August.

The US beauty retailer delivered double-digit K-beauty sales in Q2, with nearly half of sales originating from exclusively stocked products.

Steelman said during the call: “As the US leader at K-beauty for the last 18 months, we have been continuing to accelerate.

“We continue to lead into this assortment innovation of bringing the best global beauty to the US market and our international markets around the world.”

However, Steelman gave a more measured response to the overall explosion of K-beauty, with the business also prioritising other emerging beauty markets including China – recently onboarding Chinese cosmetics brand Proya in August.

She added: “I think you can get really caught up in this K-beauty hoopla about it being very fast fashion [orientated].

“It is not just about K-beauty anymore; I think C-beauty is also very important to us.

“Our merchants are very responsible in curating the best brands that have great formulations, and making sure that they have strong efficiency.

“So we are not going to get caught up in this fast fashion of K-beauty because there is a lot of noise out there.

“We want to put the very best of the assortment and have that trusted experience from our customers that are coming into the store.”

Ulta Beauty on the make-up’s global declines and managing promotional activity

The make-up category has seen more middling growth in the first half of 2026.

Mass cosmetics retail sales increased only 5% between January and July, versus other categories such as fragrance, which saw a 15% sales boom in H1, according to recent data from market research firm Circana.

Steelman argued that mass make-up performance is a “reflection of a lack of newness from some of the major brands as they lose some strength from last year”.

However, Ulta Beauty is seeing some “encouraging activity” in its outlook for the remainder of the year.

She added: “This includes older face looks and more expressive eyes, and we are also very optimistic about some of the newness coming into the category in the back half of the year.”

Steelman was also asked about Ulta Beauty’s promotional activity during the call, with the executive reiterating the retailer’s priorities on bringing value to its consumer.

She explained: “Value is an increasingly important consideration for the customer as they are facing some heightened economic uncertainty, and you know everybody's watching their pocketbook.

“The overall promotional environment did tick up a little bit in both markets, and we were a little bit more promotional year-over-year.

“But what I would say is that we were really strategic in our promotional plan, and we were very thoughtful in how we participated.

“One of the things that we have been talking about here internally is that we want to evolve our promotional strategies to really drive profitable growth.

“What that really means is that we are looking at a promotional [activity] holistically.”

Ulta Beauty’s financial outlook for the remainder of 2026.

Kecia Steelman, Ulta Beauty President and CEO

On the back of a robust second quarter of trading, Ulta Beauty has increased its full-year guidance for 2026.

The US beauty retailer now expects net sales growth of 6.7% to 7.2%, up from the previous estimate of 6% to 7%.

The outlook for comparable sales growth has also been increased from 2.5% to 3.5% to 3.2% to 3.7%.

Steelman said: “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.

“We continue to strengthen our position as the ultimate beauty discovery destination, leveraging our unique understanding of our guests to drive excitement and growth through compelling innovation, value, experiences, and convenience.

“With our strong first-half performance, we have raised our financial guidance for the year, reflecting our confidence in our strategic priorities and our ability to drive profitable growth and long-term value for all stakeholders in a dynamic environment."

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Source: Cosmetics Business (https://www.cosmeticsbusiness.com/)

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