Q1 2026 Ulta Beauty Inc Earnings Call

June 2, 2026

Speaker #1: Conference operator today. At this time, I would like to welcome you to Ulta Beauty's first quarter and fiscal 2026 earnings call. This conference is being recorded and all lines have been placed on mute to prevent any background noise.

Operator: Conference operator today. At this time, I would like to welcome you to Ulta Beauty's Q1 and fiscal 2026 Earnings Call. This conference is being recorded, and all lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question-and-answer session. At this time, I would like to turn the call over to Ms. Kiley Rawlins, Senior Vice President of Investor Relations. Ms. Rawlins, please proceed.

Speaker #1: After the speaker's prepared remarks, there will be a question-and-answer session. At this time, I would like to turn the call over to Ms. Kiley Rawlins, Senior Vice President of Investor Relations.

Speaker #1: Ms. Rawlins, please proceed.

Speaker #2: Thank you, Leila. Good afternoon, everyone, and thank you for joining us for a discussion of Ulta Beauty's results for the first quarter of fiscal 2026.

Kiley Rawlins: Thank you, Layla. Good afternoon, everyone, and thank you for joining us for a discussion of Ulta Beauty's results for Q1 of fiscal 2026. Hosting our call today are Kecia Steelman, Chief Executive Officer, and Christopher DelOrefice, Chief Financial Officer. During today's webcast, a presentation is being shared live and has also been posted to our website at ulta.com/investor. As a reminder, today's earnings release and the comments made by management during this call include forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, factors identified in the earnings release and in our most recent 10-K. The company undertakes no obligation to revise any forward-looking statements.

Speaker #2: Hosting our call today are Kecia Steelman, Chief Executive Officer; and Chris Lialios, Chief Financial Officer. During today's webcast, a presentation is being shared live and has also been posted to our website at ulta.com/investor.

Speaker #2: As a reminder, today's earnings release and the comments made by management during this call include forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections.

Speaker #2: These risks and uncertainties include, but are not limited to, factors identified in the earnings release and in our most recent 10-K. The company undertakes no obligation to revise any forward-looking statements.

Speaker #2: To allow us to accommodate as many questions as possible during the hour scheduled for this call, we respectively ask that you limit your time to one question and no more than one follow-up question.

Kiley Rawlins: To allow us to accommodate as many questions as possible during the hour scheduled for this call, we respectively ask that you limit your time to one question and no more than one follow-up question. As always, the IR team will be available for any questions after the call. Now I'll turn the call over to Kecia. Kecia?

Speaker #2: As always, the IR team will be available for any questions after the call. And now I'll turn the call over to Kecia. Kecia?

Speaker #3: Thank you, Kiley, and good afternoon, everyone. After meeting our ambitious goals in fiscal 2025, we entered fiscal 2026 with a keen focus on continuing our progress while optimizing our model with financial discipline to deliver profitable growth.

Kecia Steelman: Thank you, Kiley. Good afternoon, everyone. After meeting our ambitious goals in fiscal 2025, we entered fiscal 2026 with a keen focus on continuing our progress while optimizing our model with financial discipline to deliver profitable growth. Before I dive into the details of our Q1 performance and priorities for the year ahead, I want to share my perspectives on the business. First, our core US business is fundamentally strong in delivering healthy sales growth. Second, the strategic initiatives we are driving to scale new businesses are gaining traction, are contributing to our results, and position us well for long-term growth and value creation. Third, we are exercising financial discipline and working thoughtfully to optimize our cost and investments to position our business to deliver consistent double-digit earnings growth.

Speaker #3: Before I dive into the details of our first quarter performance and priorities for the year ahead, I want to share my perspectives on the business.

Speaker #3: First, our core U.S. business is fundamentally strong in delivering healthy sales growth. Second, the strategic initiatives we are driving to scale new businesses are gaining traction, are contributing to our results, and position us well for long-term growth and value creation.

Speaker #3: Third, we are exercising financial discipline and working thoughtfully to optimize our costs and investments to position our business to deliver consistent, double-digit earnings growth.

Speaker #3: Next, growth in the beauty category remains healthy, even as consumers are increasingly value-focused. And Ulta Beauty's diverse assortment, omnichannel convenience, and compelling loyalty rewards program uniquely positions us to meet our guests' evolving needs.

Kecia Steelman: Next, growth in the beauty category remains healthy even as consumers are increasingly value-focused, and Ulta Beauty's diverse assortment, omni-channel convenience, and compelling loyalty rewards program uniquely positions us to meet our guests' evolving needs. Finally, we are staying focused on capitalizing on the strengths of our model and executing our Ulta Beauty Unleashed strategy to deliver long-term profitable growth and value. While we are continuing to monitor how the macro landscape could evolve, we remain execution-focused and are confident we will deliver our fiscal 2026 expectations, which Chris will cover further later in the call. Turning now to our Q1 performance and the progress being made on our Ulta Beauty Unleashed pillars. The strength of our business continued as we delivered Q1 net sales growth of 11.1%, comparable sales growth of 5.3%, and 15.5% diluted EPS growth.

Speaker #3: And finally, we are staying focused on capitalizing on the strengths of our model and executing our Ulta Beauty Unleashed strategy to deliver long-term, profitable growth and value.

Speaker #3: And while we are continuing to monitor how the macro landscape could evolve, we remain execution-focused and are confident we will deliver our fiscal 2026 expectations, which Chris will cover further later in the call.

Speaker #3: Turning now to our first quarter performance and the progress being made on our Ulta Beauty Unleashed pillars. The strength of our business continued as we delivered first quarter net sales growth of 11.1%, comparable sales growth of 5.3%, and 15.5% diluted EPS growth.

Speaker #3: Performance was broad-based with all channels and major categories contributing positively to our strong results. From a market share perspective, we gained share in prestige beauty and we were roughly flat in mass beauty.

Kecia Steelman: Performance was broad-based, with all channels and major categories contributing positively to our strong results. From a market share perspective, we gained share in prestige beauty, and we were roughly flat in mass beauty. Beginning with our driving the core business growth pillar. Overall company performance continues to be fueled by the strength of our core U.S. business, reflecting a relentless focus on delighting guests with every interaction and building on our new go-to-market approach, marketing leadership, and compelling merchandising innovation. Our stores delivered another solid sales performance, supported by the successful execution of key promotional and marketing events, including 21 Days of Beauty and Spring Haul. As we begin the new fiscal year, our store teams focus on driving engagement, education, and excitement.

Speaker #3: Beginning with our driving the core business growth pillar, overall company performance continues to be fueled by the strength of our core U.S. business, reflecting a relentless focus on delighting guests with every interaction and building on our new go-to-market approach, marketing leadership, and compelling merchandising innovation.

Speaker #3: Our stores delivered another solid sales performance, supported by the successful execution of key promotional and marketing events, including 21+ Days of Beauty and Spring Haul.

Speaker #3: As we began the new fiscal year, our store teams focused on driving engagement, education, and excitement. During the quarter together with our brands, we executed more than 40,000 in-store events including key activations to highlight newness from brands like Coach, Sacred, Lip Tinted, and held several workshops to support education for brands like Redkin, Rare Beauty, and Lancome.

Kecia Steelman: During the quarter, together with our brands, we executed more than 40,000 in-store events, including key activations to highlight newness from brands like Coach, Cécred, Live Tinted, and held several workshops to support education for brands like Redken, Rare Beauty, and Lancôme. As we look to Q2, we will stay focused on the fundamentals to ensure we are delivering great guest experiences, driving conversion, and fueling sales growth. E-commerce momentum continued, with the team delivering another quarter of robust sales performance. The sustained strength of our e-commerce channel is powered by the investments we've made over the last several years to elevate our infrastructure and the ongoing enhancements we're continuing to roll out, like expanded same-day delivery options through Uber Eats and new buy now, pay later options through Klarna to improve functionality, expand convenience, and improve the guest experience.

Speaker #3: As we look to Q2, we will stay focused on the fundamentals to ensure we are delivering great guest experiences driving conversion and fueling sales growth.

Speaker #3: E-commerce momentum continued with the team delivering another quarter of robust sales performance. The sustained strength of our e-commerce channel is powered by the investments we've made over the last several years to elevate our infrastructure and the ongoing enhancements we're continuing to roll out, like expanded same-day delivery options through Uber Eats and new Buy Now, Pay Later options through Klarna, to improve functionality, expand convenience, and improve the guest experience.

Speaker #3: The convenience of Buy Anywhere, Fill Anywhere capabilities, including Buy Online, Pickup In-Store, have been a key driver of our e-commerce growth and of our strong guest satisfaction metrics.

Kecia Steelman: The convenience of buy anywhere, fill anywhere capabilities, including buy online, pickup in store, have been a key driver of our e-commerce growth and of our strong guest satisfaction metrics. This quarter marked the exciting launch of our TikTok Shop with a strategic focus on our only at Ulta exclusive brands. We hosted our first-ever TikTok Shop Live at our Ulta Beauty World event, garnering more than 5 million impressions and strong GMV, rivaling top affiliate live stream performances. This initiative is driving a lot of excitement with guests and the creator community, which is showing high interest in collaborating with us. In addition, a number of brand partners have expressed interest in offering their products as part of our curated TikTok assortment and bundles.

Speaker #3: This quarter marked the exciting launch of our TikTok Shop, with a strategic focus on our Only at Ulta exclusive brands. We hosted our first-ever TikTok shoppable livestream at our Ulta Beauty World event, garnering more than 5 million impressions and strong GMV, rivaling top affiliate livestream performances.

Speaker #3: This initiative is driving a lot of excitement with guests and the creator community which is showing high interest in addition, a number of brand partners have expressed interest in offering their products as part of our curated TikTok assortment and bundles.

Speaker #3: This new channel positions Ulta Beauty at the center of a critical discovery point and will enable us to spotlight our exclusive brands, build influence, and fuel our marketing efforts.

Kecia Steelman: This new channel positions Ulta Beauty at the center of a critical discovery point and will enable us to spotlight our exclusive brands, build influence, and fuel our marketing efforts, particularly with younger consumers. Turning to brand building, we are making meaningful progress on our ambition to build multiple $100 million plus exclusive brands over time. To compete and win in beauty and wellness, we are driving the innovation pipeline, co-investing in marketing with strategic and exclusive brand partners, and creating exciting activations in stores and online. Today, I'd like to highlight an exclusive fragrance brand, NOYZ. An approachable, vegan, and cruelty-free fragrance brand inspired by relatable real-life feelings and self-expression. During Q1, NOYZ launched its innovative Milk Eau de Parfum, part fragrance, part hydrating skincare.

Speaker #3: Particularly with younger consumers. Turning to brand building, we are making meaningful progress on our ambition to build multiple $100 million-plus exclusive brands over time.

Speaker #3: To compete and win in beauty and wellness, we are driving the innovation pipeline, co-investing in marketing with strategic and exclusive brand partners, and creating exciting activations in stores and online.

Speaker #3: We have several exciting success stories on this front, and today I'd like to highlight an exclusive fragrance brand: Noise, an approachable vegan and cruelty-free fragrance brand inspired by relatable real-life feelings and self-expression.

Speaker #3: During Q1, Noise launched its innovative milk de perfumes part fragrance part hydrating skincare. Milks are perfect for layering and are creating a new subcategory that is excited our guests and is helping drive the brand's continued growth.

Kecia Steelman: Milks are perfect for layering and are creating a new subcategory that has excited our guests and is helping drive the brand's continued growth. Ulta Beauty collaborated with NOYZ on a 360-degree go-to-market activation strategy that helped catapult the brand into our top 20 in the category for the quarter. NOYZ continues to fuel social buzz into Q2 with the recent debut of Be Her, a fragrance collaboration with award-winning singer-songwriter Ella Langley. From a broader newness perspective, our balanced approach is driving consumer excitement across categories and fueling positive performance. During the quarter, we launched more than 20 new brands, including our record-breaking launch of Rare Beauty in makeup, Balmain, an exclusive early lead brand in fragrance, Bloomeffects in skin, Hairstory in haircare, and Grown Alchemist in wellness.

Speaker #3: Ulta Beauty collaborated with Noise on a $360 go-to-market activation strategy that helps catapult the brand into our top 20 in the category for the quarter.

Speaker #3: And No7 continues to fuel social buzz into Q2 with the recent debut of Be Her, a fragrance collaboration with award-winning singer-songwriter Ella Langley.

Speaker #3: From a broader newness perspective, our balanced approach is driving consumer excitement across categories and fueling positive performance. During the quarter, we launched more than 20 new brands, including our record-breaking launch of Rare Beauty in makeup, Balmain as an exclusive early lead brand in skin, Care Story in hair care, and Gruens in wellness.

Speaker #3: These launches are in addition to exciting newness from our existing brand partners like Estée Lauder, Tatcha, and exclusive brand Sacred. In marketing, we focus on engaging storytelling to capture core moments in beauty and further Ulta Beauty's authority and high-impact shopping moments.

Kecia Steelman: These launches are in addition to exciting newness from our existing brand partners like Estée Lauder, Tatcha, and exclusive brand Sephora. In marketing, we focus on engaging storytelling to capture core moments in beauty and further Ulta Beauty's authority in high impact shopping moments. The team drove outstanding activations around key marketing and promotional events, including Valentine's Day, 21-plus Days of Beauty, and Spring Haul. In April, we hosted our flagship consumer event, Ulta Beauty World, in Orlando. Approximately 3,000 Ulta Beauty fans attended the event to engage with nearly 240 of our brand partners and discover newness through immersive, high-touch experiences, with master class education offered as a separate experience. Building on last year's inaugural event, Ulta Beauty World drove strong engagement across PR and social, and expanded into new platforms like TikTok Shop Live, more than doubling earned media value year over year.

Speaker #3: The team drove outstanding activations around key marketing and promotional events including Valentine's Day, 21-plus days of beauty, and spring haul. In April, we hosted our flagship consumer event Ulta Beauty World in Orlando.

Speaker #3: Approximately 3,000 Ulta Beauty fans attended the event to engage with nearly 240 of our brand partners and discover newness through immersive, high-touch experiences, with masterclass education offered as a separate experience.

Speaker #3: Building on last year's inaugural event, Ulta Beauty World drove strong engagement across PR and social and expanded into new platforms like TikTok Shop Live more than doubling earned media value year over year.

Speaker #3: During the quarter, we expanded our Ulta Beauty rewards loyalty program to nearly 47 million members, up 4% year over year. We are leveraging our vast first-party data and recent tech improvements to enhance our leadership and personalization.

Kecia Steelman: During the quarter, we expanded our Ulta Beauty Rewards loyalty program to nearly 47 million members, up 4% year over year. We are leveraging our vast first-party data and recent tech improvements to enhance our leadership in personalization. Our teams are building around key customer journeys and actions to maximize incremental sales-driving opportunities. This includes utilizing our loyalty data to understand behaviors, predict replenishment purchases, and drive cart conversion. Moving to our second pillar, scaling new businesses. Beyond the US, we opened a handful of new stores across our international markets. Space NK, which operates stores in the UK and Ireland, continues to deliver healthy, well-balanced growth, expand its loyal customer base, and gain market share.

Speaker #3: Our teams are building around key customer journeys and actions to maximize incremental sales-driving opportunities. This includes utilizing our loyalty data to understand behaviors, predict replenishment purchases, and drive cart conversion.

Speaker #3: Moving to our second pillar, scaling new businesses. Beyond the U.S., we opened a handful of new stores across our international markets. Space NK, which operates stores in the UK and Ireland, continues to deliver healthy, well-balanced growth, expand its loyal customer base, and gain market share.

Speaker #3: In Mexico, we opened two new stores including the grand opening of our Madero store a unique two-story building that blends modern beauty retail with historic architecture and charm in the heart of Mexico City.

Kecia Steelman: In Mexico, we opened two new stores, including the grand opening of our Madero store, a unique two-story building that blends modern beauty retail with the historic architecture and charm in the heart of Mexico City. In addition, our franchise partner, Alshaya Group, opened our third store in the Middle East at the Dubai Mall, one of the largest and most visited shopping destinations in the world. While the situation in the Middle East remains fluid, we continue to be excited about the potential of this flagship location and for the expansion opportunity in the region over the long term. Our marketplace continues to gain traction with the addition of exciting new brands and items. We closed the quarter offering more than 325 brands and over 8,000 SKUs across our seven marketplace assortment focus areas.

Speaker #3: In addition, our franchise partner, Al Shia, opened our third store in the Middle East at the Dubai Mall, one of the largest and most visited shopping destinations in the world.

Speaker #3: While the situation in the Middle East remains fluid, we continue to be excited about the potential of this flagship location and the expansion opportunity in the region over the long term.

Speaker #3: Our marketplace continues to gain traction with the addition of exciting new brands and items. We closed the quarter offering more than 325 brands and over 8,000 SKUs across our seven marketplace assortment focus areas.

Speaker #3: During the quarter, we successfully integrated marketplace brands into our 21-plus days of beauty promotion contributing to strong ongoing guest engagement. I'm incredibly proud of the way our team continues to execute this important initiative and the strong guest satisfaction we are seeing for those who purchase products from our marketplace.

Kecia Steelman: During the quarter, we successfully integrated marketplace brands into our 21-plus Days of Beauty promotion, contributing to strong ongoing guest engagement. I'm incredibly proud of the way our team continues to execute this important initiative and the strong guest satisfaction we are seeing for those who purchase products from our marketplace. In wellness, we're helping guests find their feel good with expanded assortments across key wellness focus areas, nutrition and supplements, intimate care, rest and reset, and essential routines. During the quarter, we launched several new brands, including nutritional gummies brand, Gruins, and intimate skincare brand, Medicine Mama. We drove awareness and guest acquisition through our wellness-focused events and integrated wellness offerings into key tentpole events. We also enhanced our digital navigation and storytelling. Performance continues to build, driven by assortment and space expansion, as well as guest engagement in key pillars, including nutrition and supplements, and rest and reset.

Speaker #3: In wellness, we're helping guests find their feel-good with expanded assortments across key wellness focus areas: nutrition and supplements, intimate care, rest and reset, and essential routines.

Speaker #3: During the quarter, we launched several new brands, including the nutritional gummies brand Gruens and the intimate skincare brand Medicine Mama. We drove awareness and guest acquisition through our wellness-focused events and integrated wellness offerings into key tentpole events.

Speaker #3: We also enhanced our digital navigation and storytelling. Performance continues to build driven by assortment and space expansion as well as guest engagement and key pillars including nutrition and supplements and rest and reset.

Speaker #3: In UB Media, we're on a journey of scaling this incremental margin driver, rolling out enhanced capabilities, features, and products to support our brands. We recently launched a YouTube enhanced measurement product, which provides deeper insights and benefits to our brand.

Kecia Steelman: In UB Media, we are on a journey of scaling this incremental margin driver, rolling out enhanced capabilities, features, and products to support our brands. We recently launched a YouTube enhanced measurement product, which provides deeper insights and benefits to our brands. Clinique leveraged this new capability for a recent campaign that was executed with fresh talent and best-in-class practices. It was not only able to measure brand-level sales, but they also saw meaningful higher returns on the ad spend and conversion compared to other video channels. Finally, our third strategic pillar, aligning our foundation for the future. As part of our supply chain optimization efforts, we advanced plans to expand our distribution network with the commitment to open a new regional distribution center in Salt Lake City, Utah. This new facility will leverage the latest in automation technology to improve speed, increase efficiency, and simplify product flow.

Speaker #3: Clinique leveraged this new capability for a recent campaign that was executed with fresh talent and best-in-class practices. It was not only able to measure brand-level sales but they also saw meaningful higher returns on the ad spend and conversion compared to other video channels.

Speaker #3: And finally, our third strategic pillar aligning our foundation for the future. As part of our supply chain optimization efforts, we advanced plans to expand our distribution network with the commitment to open a new regional distribution center in Salt Lake City, Utah.

Speaker #3: This new facility will leverage the latest in automation technology to improve speed, increase efficiency, and simplify product flow. In addition, we continue to leverage AI to optimize our business.

Kecia Steelman: We continue to leverage AI to optimize our business. From a guest-facing perspective, we introduced an online shopping agent, Ulta AI, to enhance discovery, personalization, and shopping experiences. Initial results have been promising, and we are excited about the potential of this new feature. We are integrating with leading AI platforms like Google's Gemini to enable agentic commerce. We are still in the early days in our focus on leveraging the strengths of our partners to maximize the AI opportunity. Finally, turning to our efforts to cultivate one of our most important competitive advantages, our culture. Last month, we brought together more than 1,500 general managers, along with corporate, DC leaders, and brand partners in our annual field leadership conference. The strength of our model was on full display.

Speaker #3: From a guest-facing perspective, we introduced an online shopping agent, Ulta AI, to enhance discovery, personalization, and shopping experiences. Initial results have been promising, and we are excited about the potential of this new feature.

Speaker #3: In addition, we are integrating with leading AI platforms like Google's Gemini to enable agentic commerce. We are still in the early days and are focused on leveraging the strengths of our partners to maximize the AI opportunity.

Speaker #3: Finally, turning to our efforts to cultivate one of our most important competitive advantages: our culture. Last month, we brought together more than 1,500 general managers, along with corporate and DC leaders and brand partners, at our annual field leadership conference.

Speaker #3: The strength of our model was on full display. Everything about the time we spent together was aimed at growing our business, building enthusiasm, and pushing ourselves to an even higher standard.

Kecia Steelman: Everything about the time we spent together was aimed at growing our business, building enthusiasm, and pushing ourselves to an even higher standard. The most exciting part was the alignment, the collaboration, and the camaraderie across the entire business. Importantly, there was also a unified focus on execution in stores and providing our guests with consistently great experiences. The energy I experienced, coupled with our current business performance, reinforces my confidence in the direction we are heading and my optimism that the business will continue to deliver on our revenue, income, and shareholder value creation goals. Turning to the operating environment. As I shared in the beginning of my remarks, the beauty and wellness categories remain healthy and engagement is strong. At the same time, consumers continue to face macroeconomic uncertainty and inflationary measures and pressures from rising fuel prices, making value increasingly important as a consideration.

Speaker #3: The most exciting part was the alignment, the collaboration, and the camaraderie across the entire business. Importantly, there was also a unified focus on execution in stores and providing our guests with consistently great experiences.

Speaker #3: The energy I experienced, coupled with our current business performance, reinforces my confidence in the direction we are heading and my optimism that the business will continue to deliver on our revenue, income, and shareholder value creation goals.

Speaker #3: Turning to the operating environment, as I shared at the beginning of my remarks, the beauty and wellness categories remain healthy, and engagement is strong.

Speaker #3: At the same time, consumers continue to face macroeconomic uncertainty and inflationary pressures from rising fuel prices, making value increasingly important as a consideration.

Speaker #3: We are operating from a position of strength in this environment and have multiple levers to satisfy guests' value needs, including a diverse mass-to-luxury assortment that provides our guests with choices for every budget.

Kecia Steelman: We are operating from a position of strength in this environment and have multiple levers to satisfy guests' value needs, including a diverse mass-to-luxury assortment that provides our guests with choices for every budget. Omnichannel accessibility that allows our guests to browse, buy, and fulfill purchases in the way that best fits their lifestyle, and a compelling loyalty program and targeted promotional capabilities that enable guests to maximize value while strengthening engagement with our brand. We will continue to thoughtfully navigate the operating environment and respond with agility to deliver for our guests, drive sales, and expand share over the long term. Looking to the future, we're focused on expanding our US business by strengthening our assortment and investing in stores and digital experiences, and deepening customer engagement through personalization, AI, and social commerce, including our new TikTok Shop partnership.

Speaker #3: Omnichannel accessibility that allows our guests to browse, buy, and fulfill purchases in the way that best fits their lifestyle. In a compelling loyalty program and targeted promotional capabilities, that enable guests to maximize value while strengthening engagement with our brand.

Speaker #3: We will continue to thoughtfully navigate the operating environment and respond with agility to deliver for our guests, drive sales, and expand share over the long term.

Speaker #3: Looking to the future, we're focused on expanding our US business by strengthening our assortment and investing in stores and digital experiences and deepening customer engagement through personalization, AI, and social commerce.

Speaker #3: Including our new TikTok Shop partnership. In addition, we expect to drive incremental, creative growth as we continue to scale our new businesses, including international expansion, wellness and marketplace offerings, and enhanced UB Media capabilities.

Kecia Steelman: In addition, we expect to drive incremental accretive growth as we continue to scale our new businesses, including international expansion, wellness, and marketplace offerings, and enhanced UB Media capabilities. We will continue to execute our plans to support long-term growth and efficiency through investments in supply chain automation, merchandising systems, and AI-powered tools to enhance operational performance, guest experience, and profitable growth. Finally, I'm excited to share that we are beginning work on a new, highly experiential Ulta Beauty location in Times Square, New York. Expected to open in late 2027, this flagship store will be a vibrant, dynamic destination where technology, entertainment, convenience, and our differentiated assortment come together to deliver immersive guest experiences and brand activations.

Speaker #3: We will continue to execute our plans to support long-term growth and efficiency through investments in supply chain automation, merchandising systems, and AI-powered tools to enhance operational performance guest experience and profitable growth.

Speaker #3: And finally, I'm excited to share that we are beginning work on a new, highly experiential Ulta Beauty location in Times Square, New York. Expected to open in late 2027, this flagship store will be a vibrant, dynamic destination where technology, entertainment, convenience, and our differentiated assortment come together to deliver immersive guest experiences and brand activations.

Speaker #3: This store will showcase next-level brand building and storytelling capabilities unlock high-impact marketing through digital billboards, and drive greater awareness and loyalty with guests from all over the United States and the world.

Kecia Steelman: This store will showcase next-level brand building and storytelling capabilities, unlock high-impact marketing through digital billboards, and drive greater awareness and loyalty with guests from all over the United States and the world. In closing, our Ulta Beauty Unleashed plan is delivering results, and we remain confident in the strength of the Ulta Beauty model, the resilience of our category, and the passion of our guests and associates. We are investing with discipline in the areas that matter the most. A differentiated, seamless assortment, a seamless omnichannel experience, and deeper guest loyalty, all while staying agile in a dynamic environment. As always, we will stay focused on what we can control, keeping our guests and associates at the center of all we do to drive our business forward and create value. With that, I'm going to turn it over to Chris to cover the financials.

Speaker #3: In closing, our Ulta Beauty Unleash plan is delivering results, and we remain confident in the strength of the Ulta Beauty model, the resilience of our category, and the passion of our guests and associates.

Speaker #3: We are investing with discipline in the areas that matter the most: a differentiated, seamless assortment; a seamless omnichannel experience; and deeper guest loyalty—all while staying agile in a dynamic environment.

Speaker #3: As always, we will stay focused on what we can control, keeping our guests and associates at the center of all we do to drive our business forward and create value.

Speaker #3: With that, I'm going to turn it over to Chris to cover the financials.

Speaker #2: Great. Thanks, Kecia. And good afternoon, everyone. I'll begin with the discussion of our first quarter results and then share our updated expectations for the year.

Christopher DelOrefice: Great. Thanks, Kecia. Good afternoon, everyone. I'll begin with the discussion of our Q1 results then share our updated expectations for the year. Starting with the Q1, the Ulta Beauty team delivered profitable growth, reflecting benefits from strong revenue growth and gross margin expansion, driven by improvements in shrink and merchandise margin. I want to express my sincere appreciation to our teams for staying disciplined and working together to deliver this strong performance. Net sales for the Q1 increased 11.1% to $3.2 billion, compared to $2.8 billion last year. Total sales growth, excluding the impact of Space NK, was in the high single-digit range. During the Q1, we opened 16 net new Ulta Beauty stores and one new Space NK store. Other revenue increased $6 million to $62 million, primarily due to higher income from our credit card program and commissions from UB Marketplace.

Chris DelOrefice: Great. Thanks, Kecia. Good afternoon, everyone. I'll begin with the discussion of our Q1 results then share our updated expectations for the year. Starting with the Q1, the Ulta Beauty team delivered profitable growth, reflecting benefits from strong revenue growth and gross margin expansion, driven by improvements in shrink and merchandise margin. I want to express my sincere appreciation to our teams for staying disciplined and working together to deliver this strong performance. Net sales for the Q1 increased 11.1% to $3.2 billion, compared to $2.8 billion last year. Total sales growth, excluding the impact of Space NK, was in the high single-digit range. During the Q1, we opened 16 net new Ulta Beauty stores and one new Space NK store. Other revenue increased $6 million to $62 million, primarily due to higher income from our credit card program and commissions from UB Marketplace.

Speaker #2: Starting with the quarter, the Ulta Beauty team delivered profitable growth, reflecting benefits from strong revenue growth and gross margin expansion driven by improvements in shrink and merchandise margin.

Speaker #2: I want to express my sincere appreciation to our teams for staying disciplined and working together to deliver this strong performance. Net sales for the quarter increased 11.1% to $3.2 billion, compared to $2.8 billion last year.

Speaker #2: Total sales growth, excluding the impact of Space NK, was in the high single-digit range. During the quarter, we opened 16 net new Ulta Beauty stores and one new Space NK store.

Speaker #2: Other revenue increased 6 million dollars to 62 million dollars primarily due to higher income from our credit card program and commissions from UB Marketplace.

Speaker #2: This growth was partially offset by lower royalty income from our partnership with Target Corporation. Comparable sales for the period increased 5.3%, driven by a 3.7% increase in average ticket and a 1.6% increase in transactions.

Christopher DelOrefice: This growth was partially offset by lower royalty income from our partnership with Target Corporation. Comparable sales for the period increased 5.3%, driven by a 3.7% increase in average ticket and a 1.6% increase in transactions. Looking at the cadence of sales through the quarter, the period played out largely as we expected. February delivered low double-digit comp growth as we lapped our weakest comp performance in fiscal 2025. Comp growth for both March and April was in the low single-digit range. From a channel perspective, both store and digital channels contributed to comp growth, with e-commerce delivering mid-teen sales growth and comp stores delivering sales growth in the low single-digit range. Turning now to sales by category. Fragrance was our strongest category again this quarter, delivering high teen comp growth and increasing from 11% to 12% of total revenue.

Chris DelOrefice: This growth was partially offset by lower royalty income from our partnership with Target Corporation. Comparable sales for the period increased 5.3%, driven by a 3.7% increase in average ticket and a 1.6% increase in transactions. Looking at the cadence of sales through the quarter, the period played out largely as we expected. February delivered low double-digit comp growth as we lapped our weakest comp performance in fiscal 2025. Comp growth for both March and April was in the low single-digit range. From a channel perspective, both store and digital channels contributed to comp growth, with e-commerce delivering mid-teen sales growth and comp stores delivering sales growth in the low single-digit range. Turning now to sales by category. Fragrance was our strongest category again this quarter, delivering high teen comp growth and increasing from 11% to 12% of total revenue.

Speaker #2: Looking at the cadence of sales through the quarter, the period played out largely as we expected. February delivered low double-digit comp growth as we lapped our weakest comp performance in fiscal 2025.

Speaker #2: Comp growth for both March and April was in the low single-digit range. From a channel perspective, both store and digital channels contributed to comp growth, with e-commerce delivering mid-teens sales growth and comp stores delivering sales growth in the low single-digit range.

Speaker #2: Turning now to sales by category, fragrance was our strongest category again this quarter, delivering high-teen comp growth and increasing from 11% to 12% of total revenue.

Speaker #2: We continue to execute well and advance towards our goal of being the number one destination for fragrance. We are playing to win and to support this ambition.

Christopher DelOrefice: We continue to execute well and advance towards our goal of being the number one destination for fragrance. We are playing to win and to support this ambition, we are investing in newness, enhancing our in-store experience, improving core in-stocks, and leaning into key events like Valentine's Day and Mother's Day. For the quarter, growth was primarily driven by newness from core luxury brands including YSL, Carolina Herrera, Valentino, and an early lead of new brand, Balmain, as well as innovation, including the new Milk scent format from exclusive brand NOYZ. The haircare category delivered high single-digit comp growth this quarter, driven primarily by strong performance in prestige haircare. New brands Amika and Moroccanoil drove healthy growth, and exclusive brand Cécred continue to resonate with guests, driving robust results with core hero SKUs as well as exciting innovation.

Chris DelOrefice: We continue to execute well and advance towards our goal of being the number one destination for fragrance. We are playing to win and to support this ambition, we are investing in newness, enhancing our in-store experience, improving core in-stocks, and leaning into key events like Valentine's Day and Mother's Day. For the quarter, growth was primarily driven by newness from core luxury brands including YSL, Carolina Herrera, Valentino, and an early lead of new brand, Balmain, as well as innovation, including the new Milk scent format from exclusive brand NOYZ. The haircare category delivered high single-digit comp growth this quarter, driven primarily by strong performance in prestige haircare. New brands Amika and Moroccanoil drove healthy growth, and exclusive brand Cécred continue to resonate with guests, driving robust results with core hero SKUs as well as exciting innovation.

Speaker #2: We are investing in newness, enhancing our in-store experience, improving core in-stocks, and leaning into key events like Valentine's Day and Mother's Day. For the quarter, growth was primarily driven by newness from core luxury brands including YSL, Carolina Herrera, Valentino, and an early lead of new brand Balmain.

Speaker #2: As well as innovation, including the new Milk scent format from exclusive brand Noice. The hair care category delivered high single-digit comp growth this quarter, driven primarily by strong performance in prestige hair care.

Speaker #2: New brands, Amica and Moroccan Oil, drove healthy growth and exclusive brand Sacred continues to resonate with guests, driving robust results with core hero SKUs as well as exciting innovation.

Speaker #2: Hair treatments, including Repair Focus products and scalp regimens, outperformed, while hair tools declined, as the impact of lapping prior year launches and softness in traditional tools more than offset growth from innovative and accessible brands Shark and T3.

Christopher DelOrefice: Hair treatments, including repair-focused products and scalp regimens, outperformed, while hair tools declined as the impact of lapping prior year launches and softness in traditional tools more than offset growth from innovative and accessible brands Shark and T3. Comp sales in the makeup category increased in the low single-digit range, with growth driven primarily by prestige makeup. Strong guest engagement with new brand Rare Beauty, as well as newness from existing brands including MAC, Kylie Cosmetics, and Estée Lauder helped deliver growth for prestige makeup. Mass makeup was relatively flat, with compelling innovation from brands like Morphe and L'Oréal offsetting limited innovation from other mass brands. The skincare and wellness category delivered low double-digit comp growth this quarter. Prestige skincare continued to perform well as newer brands, including Medicube and Dermalogica, and newness from existing brands, including Tatcha and exclusive brand Peach & Lily, drove healthy guest engagement.

Chris DelOrefice: Hair treatments, including repair-focused products and scalp regimens, outperformed, while hair tools declined as the impact of lapping prior year launches and softness in traditional tools more than offset growth from innovative and accessible brands Shark and T3. Comp sales in the makeup category increased in the low single-digit range, with growth driven primarily by prestige makeup. Strong guest engagement with new brand Rare Beauty, as well as newness from existing brands including MAC, Kylie Cosmetics, and Estée Lauder helped deliver growth for prestige makeup. Mass makeup was relatively flat, with compelling innovation from brands like Morphe and L'Oréal offsetting limited innovation from other mass brands. The skincare and wellness category delivered low double-digit comp growth this quarter. Prestige skincare continued to perform well as newer brands, including Medicube and Dermalogica, and newness from existing brands, including Tatcha and exclusive brand Peach & Lily, drove healthy guest engagement.

Speaker #2: Comp sales in the makeup category increased in the low single-digit range, with growth driven primarily by prestige makeup. Strong guest engagement with new brand Rare Beauty, as well as newness from existing brands including MAC, Kylie Cosmetics, and Estée Lauder, helped deliver growth for prestige makeup.

Speaker #2: Mask makeup was relatively flat, with compelling innovation from brands like Morphe and L'Oréal offsetting limited innovation from other mask brands. The skin care and wellness category delivered low single-digit comp growth this quarter.

Speaker #2: Prestige skin care continued to perform well, as newer brands, including Medicube and Dermatology, and newness from existing brands, including Tatcha and exclusive brand Peach & Lily, drove healthy guest engagement.

Speaker #2: Mask skin care delivered solid growth, supported by in-store expansion for Anua, sustained virality for Bioma, and exclusivity from Cocokind. In wellness, continued strength in supplements—including Lemme and MaryRuth's—as well as self-care brands including Therabody, Nodpod, and Saje delivered strong growth.

Christopher DelOrefice: Mass skincare delivered solid growth supported by in-store expansion for Anua, sustained virality for Biome, and exclusivity from Cocokind. In wellness, continued strength in supplements including Lemme and MaryRuth's, as well as self-care brands including Therabody, Nodpod, and Saje Natural Wellness delivered strong growth. This growth was partially offset by pressure in body care as we lapped meaningful expansion of key brands last year. Finally, services delivered mid-single-digit comp growth driven by strong member engagement in salon and specialty services, including ear piercing and makeup services. Gross margin for the quarter increased 100 basis points to 40.1% of sales, primarily due to lower inventory strength and higher merchandise margin. Our team's relentless focus on reducing inventory shrink continues to deliver meaningful benefits to profitability.

Chris DelOrefice: Mass skincare delivered solid growth supported by in-store expansion for Anua, sustained virality for Biome, and exclusivity from Cocokind. In wellness, continued strength in supplements including Lemme and MaryRuth's, as well as self-care brands including Therabody, Nodpod, and Saje Natural Wellness delivered strong growth. This growth was partially offset by pressure in body care as we lapped meaningful expansion of key brands last year. Finally, services delivered mid-single-digit comp growth driven by strong member engagement in salon and specialty services, including ear piercing and makeup services. Gross margin for the quarter increased 100 basis points to 40.1% of sales, primarily due to lower inventory strength and higher merchandise margin. Our team's relentless focus on reducing inventory shrink continues to deliver meaningful benefits to profitability.

Speaker #2: This growth was partially offset by pressure in Body Care as we lapped meaningful expansion of key brands last year. Finally, Services delivered mid-single-digit comp growth, driven by strong member engagement in Salon and Specialty Services, including ear piercing and makeup services.

Speaker #2: Gross margin for the quarter increased 100 basis points to 40.1% of sales, primarily due to lower inventory shrink and higher merchandise margin. Our team’s relentless focus on reducing inventory shrink continues to deliver meaningful benefits to profitability.

Speaker #2: In addition to our continued focus on process improvements and associate training across all stores, we've applied data insights to take deliberate, targeted actions to improve performance in high-risk locations.

Christopher DelOrefice: In addition to our continued focus on process improvements and associate training across all stores, we've applied data insights to take deliberate, targeted actions to improve performance in high-risk locations. As a result of these combined efforts, we saw shrink reductions across every category and every region this quarter. Merchandise margin increased this quarter, primarily due to improving inventory turns and the impact of favorable category mix from Space NK. Although elevated fuel prices resulted in higher than planned transportation costs, productivity and efficiency unlocks from our supply chain optimization investments enabled our teams to mitigate this pressure in the quarter. Moving to expenses, SG&A increased 14.6% to $850 million as planned, driven primarily by the impact of Space NK and investments made to support our Ulta Beauty Unleashed strategy, including investments made in the H2 of fiscal 2025, which have not yet anniversaried.

Chris DelOrefice: In addition to our continued focus on process improvements and associate training across all stores, we've applied data insights to take deliberate, targeted actions to improve performance in high-risk locations. As a result of these combined efforts, we saw shrink reductions across every category and every region this quarter. Merchandise margin increased this quarter, primarily due to improving inventory turns and the impact of favorable category mix from Space NK. Although elevated fuel prices resulted in higher than planned transportation costs, productivity and efficiency unlocks from our supply chain optimization investments enabled our teams to mitigate this pressure in the quarter. Moving to expenses, SG&A increased 14.6% to $850 million as planned, driven primarily by the impact of Space NK and investments made to support our Ulta Beauty Unleashed strategy, including investments made in the H2 of fiscal 2025, which have not yet anniversaried.

Speaker #2: As a result of these combined efforts, we saw shrink reductions across every category and every region this quarter. Merchandise margin increased this quarter, primarily due to improving inventory turns and the impact of favorable category mix from Space NK.

Speaker #2: Although elevated fuel prices resulted in higher-than-planned transportation costs, productivity and efficiency unlocked from our supply chain optimization investments enabled our teams to mitigate this pressure in the quarter.

Speaker #2: Moving to expenses, SG&A increased 14.6% to $850 million, as planned, driven primarily by the impact of Space NK and investments made to support our Ulta Beauty Unleashed strategy, including investments made in the second half of fiscal 2025, which have not yet anniversaried.

Speaker #2: Operating profit grew faster than net sales, increasing 11.6% to $448 million, or 14.2% of sales. Interest income was $0.7 million, inclusive of the impact from our increased share buybacks.

Christopher DelOrefice: Operating profit grew faster than net sales, increasing 11.6% to $448 million, or 14.2% of sales. Interest income was $0.7 million, inclusive of the impact from our increased share buybacks. The effective tax rate decreased 70 basis points to 23.9%, primarily due to the purchase of transferable federal tax credits, resulting in a one-time income tax benefit recorded during the quarter. Wrapping up the P&L, net income increased 11.6% to $340 million, and diluted earnings per share for the quarter increased 15.5% to $7.74 per share. Moving to the balance sheet and our capital deployment strategies, our focus on cash management, including a disciplined approach to capital expenditures, is driving greater cash efficiency. We ended the quarter with $221 million in cash and short-term investments and $145 million in short-term debt.

Chris DelOrefice: Operating profit grew faster than net sales, increasing 11.6% to $448 million, or 14.2% of sales. Interest income was $0.7 million, inclusive of the impact from our increased share buybacks. The effective tax rate decreased 70 basis points to 23.9%, primarily due to the purchase of transferable federal tax credits, resulting in a one-time income tax benefit recorded during the quarter. Wrapping up the P&L, net income increased 11.6% to $340 million, and diluted earnings per share for the quarter increased 15.5% to $7.74 per share. Moving to the balance sheet and our capital deployment strategies, our focus on cash management, including a disciplined approach to capital expenditures, is driving greater cash efficiency. We ended the quarter with $221 million in cash and short-term investments and $145 million in short-term debt.

Speaker #2: The effective tax rate decreased 70 basis points to 23.9%, primarily due to the purchase of transferable federal tax credits, resulting in a one-time income tax benefit recorded during the quarter.

Speaker #2: Wrapping up the P&L, net income increased 11.6% to $340 million, and diluted earnings per share for the quarter increased 15.5% to $7.74 per share.

Speaker #2: Moving to the balance sheet and our capital deployment strategies, our focus on cash management, including a disciplined approach to capital expenditures, is driving greater cash efficiency.

Speaker #2: We ended the quarter with $221 million in cash and short-term investments, and $145 million in short-term debt. Total inventory increased 12.5% to $2.4 billion, primarily reflecting additional inventory to support new brands, the acquisition of Space NK, and the impact of 70 net new Ulta Beauty stores. On a per store basis, inventory increased 1.4%.

Christopher DelOrefice: Total inventory increased 12.5% to $2.4 billion, primarily reflecting additional inventory to support new brands, the acquisition of Space NK, and the impact of 70 net new Ulta Beauty stores. On a per store basis, inventory increased 1.4%. Capital expenditures were $58 million for the quarter, mostly driven by investments in new and existing stores. We executed against our increased share buyback plan and deployed cash and leveraged our revolver to support $555 million of stock repurchases during the quarter. Turning now to our updated outlook. We remain focused on expanding market share and delivering profitable growth in fiscal 2026. The first quarter positioned us well against these goals with strong execution throughout the P&L. At the same time, we believe it is prudent to take a measured approach to our guidance, given the uncertain macro landscape.

Chris DelOrefice: Total inventory increased 12.5% to $2.4 billion, primarily reflecting additional inventory to support new brands, the acquisition of Space NK, and the impact of 70 net new Ulta Beauty stores. On a per store basis, inventory increased 1.4%. Capital expenditures were $58 million for the quarter, mostly driven by investments in new and existing stores. We executed against our increased share buyback plan and deployed cash and leveraged our revolver to support $555 million of stock repurchases during the quarter. Turning now to our updated outlook. We remain focused on expanding market share and delivering profitable growth in fiscal 2026. The first quarter positioned us well against these goals with strong execution throughout the P&L. At the same time, we believe it is prudent to take a measured approach to our guidance, given the uncertain macro landscape.

Speaker #2: Capital expenditures were $58 million for the quarter, mostly driven by investments in new and existing stores. We executed against our increased share buyback plan and deployed cash and leveraged our revolver to support $555 million of stock repurchases during the quarter.

Speaker #2: Turning now to our updated outlook, we remain focused on expanding market share and delivering profitable growth in fiscal 2026. The first quarter positioned us well against these goals, with strong execution throughout the P&L.

Speaker #2: At the same time, we believe it is prudent to take a measured approach to our guidance given the uncertain macro landscape. For the year, we are maintaining our guidance for sales and continue to expect net sales will increase between 6% to 7%.

Christopher DelOrefice: For the year, we are maintaining our guidance for sales and continue to expect net sales will increase between 6% to 7%. We expect net sales growth will be stronger in H1, reflecting our strong Q1 performance and the benefit from the acquisition of Space NK. Given our strong Q1 performance, we are maintaining our comp sales growth commitment and continue to expect comp growth for the full year will be between 2.5% and 3.5%. Based on this, we expect our 2-year stack comp will be in the high single-digit range and relatively consistent across the balance of the quarters, including Q2, which was our highest comp performance last year. Reflecting the strong performance execution in Q1, we have enhanced our expectations and now expect operating profit will increase between 6.5% and 9% for the year.

Chris DelOrefice: For the year, we are maintaining our guidance for sales and continue to expect net sales will increase between 6% to 7%. We expect net sales growth will be stronger in H1, reflecting our strong Q1 performance and the benefit from the acquisition of Space NK. Given our strong Q1 performance, we are maintaining our comp sales growth commitment and continue to expect comp growth for the full year will be between 2.5% and 3.5%. Based on this, we expect our 2-year stack comp will be in the high single-digit range and relatively consistent across the balance of the quarters, including Q2, which was our highest comp performance last year. Reflecting the strong performance execution in Q1, we have enhanced our expectations and now expect operating profit will increase between 6.5% and 9% for the year.

Speaker #2: We expect net sales growth will be stronger in the first half, reflecting our strong Q1 performance and the benefit from the acquisition of Space NK.

Speaker #2: Given our strong Q1 performance, we are maintaining our comp sales growth commitment and continue to expect comp growth for the full year will be between 2.5% and 3.5%.

Speaker #2: Based on this, we expect our two-year stack comp will be in the high single-digit range and relatively consistent across the balance of the quarters, including Q2, which was our highest comp performance last year.

Speaker #2: Reflecting the strong performance execution in the first quarter, we have enhanced our expectations and now expect operating profit will increase between 6.5% and 9% for the year.

Speaker #2: For modeling purposes, we continue to expect gross margin will be roughly flat for the year, driven by higher inventory productivity, continued momentum in supply chain productivity, and a modest improvement in inventory shrink, which is expected to offset pressure from higher fuel costs and help balance targeted investments to bring competitive offerings across our unique mass-to-luxury assortment to our value-focused guest.

Christopher DelOrefice: For modeling purposes, we continue to expect gross margin will be roughly flat for the year, driven by higher inventory productivity, continued momentum in supply chain productivity, and a modest improvement in inventory shrink, which is expected to offset pressure from higher fuel costs and help balance targeted investments to bring competitive offerings across our unique mass to luxury assortment to our value-focused guests. We delivered SG&A growth in Q1 consistent with our expectations, and we've not changed our full-year targets. We continue to plan SG&A growth in line to slightly below net sales growth and intend to invest in a disciplined way that supports and maximizes profitable growth. We continue to expect to generate strong operating cash flow, which will enable reinvestment to support future growth and also support our intent to return capital to shareholders through our stock repurchase program.

Chris DelOrefice: For modeling purposes, we continue to expect gross margin will be roughly flat for the year, driven by higher inventory productivity, continued momentum in supply chain productivity, and a modest improvement in inventory shrink, which is expected to offset pressure from higher fuel costs and help balance targeted investments to bring competitive offerings across our unique mass to luxury assortment to our value-focused guests. We delivered SG&A growth in Q1 consistent with our expectations, and we've not changed our full-year targets. We continue to plan SG&A growth in line to slightly below net sales growth and intend to invest in a disciplined way that supports and maximizes profitable growth. We continue to expect to generate strong operating cash flow, which will enable reinvestment to support future growth and also support our intent to return capital to shareholders through our stock repurchase program.

Speaker #2: We delivered SG&A growth in the first quarter consistent with our expectations, and we have not changed our full-year targets. We continue to plan SG&A growth in line with or slightly below net sales growth, and intend to invest in a disciplined way to support and maximize profitable growth.

Speaker #2: We continue to expect to generate strong operating cash flow, which will enable reinvestment to support future growth and also support our intent to return capital to shareholders through our stock repurchase program.

Speaker #2: We see deploying capital towards increased share buybacks in the current environment as a compelling value creation opportunity, and in the first quarter, we announced an increase in our fiscal 2026 stock buyback target from $1 billion to $1.5 billion.

Christopher DelOrefice: We see deploying capital towards increased share buybacks in the current environment as a compelling value creation opportunity. In Q1, we announced an increase in our fiscal 2026 stock buyback target from $1 billion to $1.5 billion. Reflecting the impact of these assumptions, we have increased our EPS estimates. We now expect diluted EPS will be between $28.36 and $28.80 per share. Our new guidance represents growth between 10.6% and 12.3% respectively, compared to previous growth expectations of 9.4% to 11.4%. Note, our updated estimates assume a weighted average share count of approximately 43 million shares and a tax rate of approximately 24.5%. In closing, Ulta Beauty is well positioned to deliver compelling value to our shareholders.

Chris DelOrefice: We see deploying capital towards increased share buybacks in the current environment as a compelling value creation opportunity. In Q1, we announced an increase in our fiscal 2026 stock buyback target from $1 billion to $1.5 billion. Reflecting the impact of these assumptions, we have increased our EPS estimates. We now expect diluted EPS will be between $28.36 and $28.80 per share. Our new guidance represents growth between 10.6% and 12.3% respectively, compared to previous growth expectations of 9.4% to 11.4%. Note, our updated estimates assume a weighted average share count of approximately 43 million shares and a tax rate of approximately 24.5%. In closing, Ulta Beauty is well positioned to deliver compelling value to our shareholders.

Speaker #2: Reflecting the impact of these assumptions, we have increased our EPS estimates. We now expect diluted EPS will be between $20.36 and $28.80 per share.

Speaker #2: Our new guidance represents growth between 10.6% and 12.3%, respectively, compared to previous growth expectations of 9.4% to 11.4%. Note our updated estimates assume a weighted average share count of approximately 43 million shares and a tax rate of approximately 24.5%.

Speaker #2: In closing, Ulta Beauty is well positioned to deliver compelling value to our shareholders. This is evidenced by our first quarter results, where our focused execution delivered strong performance consistent with our expectations.

Speaker #2: As we continue to navigate near-term uncertainty, we are focused on executing with excellence against our plans, maintaining financial discipline, including focused investments to increase market share and deliver strong, profitable growth for our shareholders.

Christopher DelOrefice: This is evidenced by our Q1 results, where our focused execution delivered strong performance consistent with our expectations. As we continue to navigate near-term uncertainty, we are focused on executing with excellence against our plans, maintaining financial discipline, including focused investments to increase market share and deliver strong, profitable growth for our shareholders. Now, I'll turn the call over to our operator to moderate the Q&A session.

Chris DelOrefice: This is evidenced by our Q1 results, where our focused execution delivered strong performance consistent with our expectations. As we continue to navigate near-term uncertainty, we are focused on executing with excellence against our plans, maintaining financial discipline, including focused investments to increase market share and deliver strong, profitable growth for our shareholders. Now, I'll turn the call over to our operator to moderate the Q&A session.

Speaker #2: And now, I'll turn the call over to our operator to moderate the Q&A session.

Speaker #1: We will now begin Q&A. To join the queue to ask a question, please press star five on your telephone. Again, that's star five on your telephone to ask a question.

Speaker #1: Please limit to one question before jumping back in the queue. Thank you. We will now pause a moment to assemble the queue. Our first question will come from Adrian Yee with Barclays.

Operator: We will now begin Q&A. To join the queue to ask a question, please press star five on your telephone. Again, that is star five on your telephone to ask a question. Please limit to one question before jumping back in the queue. Thank you. We will now pause a moment to assemble the queue. Our first question will come from Adrienne Yih with Barclays. Your line is now open. Please go ahead.

Speaker #1: Your line is now open. Please go ahead.

Speaker #3: Great. Thank you very much and let me add my congrats or let me state my congratulations for a fantastic start to the year. Kecia, on those lines that I wanted to just talk about sort of like the categories year to date that you're seeing sort of the greatest return on the investments that you're making in the marketing and some of the heavy SG&A that you've been doing.

Speaker #3: And then kind of along those same lines, Chris, can you talk about you raised the lower end of kind of the profit expectations and then the higher end of the EPS certainly due to probably the buyback.

Adrienne Yih: Great. Thank you very much. Let me add my congrats or let me state my congratulations for a fantastic start to the year. Kecia, on those lines, I wanted to just talk about sort of like the categories year to date that you're seeing sort of the greatest return on the investments that you're making in the marketing and, you know, some of the heavy ad spend that you've been doing. Kind of along those same lines, Chris, can you talk about, you raised the lower end of kind of profit expectations and then the higher end of the EPS, certainly due to probably the buyback, but the top line remained the same. We did see, you know, the SG&A leverage. Where are you seeing kind of the most visibility for the back half?

Speaker #3: But the top line remained the same. So within the SG&A leverage, where are you seeing kind of the most visibility for the back half?

Speaker #3: Thank you so much.

Speaker #4: After Adrian, thank you for the question. We were seeing the investments we're paying off as one of the strongest categories that we're seeing result in essentially fragrance.

Speaker #4: When you look at Mother's Day and Mother's Day promotion, how we've risen the fixtures up and been able to add assortment into our stores, and then the marketing we've done along with it, that's definitely come into play.

Speaker #4: We've also been investing in our night grants and looking at ways that we can continue to lean into our brand building plans that are a 360 brands that we have here at Ulta Beauty.

Adrienne Yih: Thank you so much.

Kecia Steelman: I'll start, Adrienne. Thank you for the question. Well, where we're seeing the investment actually paying off is one of the strongest categories that we're seeing results in is fragrance. When you look at Mother's Day and Mother's Day promotion, how we've, you know, ridden the fixtures up and been able to add assortment into our stores, and then the market has gone along with it. That's definitely come into play. We've also been investing in our brand grants and looking at ways that we can continue to lean into our brand-building plans that are a 360 approach that are around the exclusive brands that we have here at Ulta Beauty, and we love what we're seeing there.

Speaker #4: And we love what we're seeing there. We're focused on being very balanced in our portfolio and continuing to look at how we can continue to drive sales across the store and not just being focused in one area of business.

Speaker #4: 21 Days of Beauty—we were pleased with the results there. We do think that the guest is continuing to look at value. And then we're also leveraging our tool of UB Media to really capture that guest, to get them, because we know where they're shopping and we know where they're at. We can take those brand dollars to get them engaged into our store and online.

Speaker #4: So those are the places where we've been really seeing a nice return for the investment that we've been spending and again, we're going to be continuing to focus on that in Q2.

Kecia Steelman: You know, we're focused on being very balanced in our portfolio and continuing to look at how we can continue to drive sales across the store and not just being focused in one area of the business. You know, 21 Days of Beauty, we were pleased with the results there. We do see that the guests continuing to look at value. We're also leveraging our tool of UB Media to really capture that guest to because we know where they're shopping and know where they're at, and we can take those brand dollars to get them engaged into our store and online. Those are the places where we've been really seeing a nice return for the investment that we've been spending. Again, we're going to be continuing to focus on that in Q2. Chris?

Speaker #4: Chris?

Speaker #5: Yeah, thanks. Thanks for the question. I mean, one of those pleased with the strong execution through the P&L in Q1 which gives us confidence to deliver against our full-year goals.

Speaker #5: Increase our operating profit commitments at the low end and the midpoint and, certainly, as you noted, raising EPS both due to the operating profit increase and share buybacks.

Speaker #5: I'll go back to the principles. Our goal is to maximize value creation through driving increases in operating profit. As we start the year, we'll have opportunities both on the leverage side and on the investor growth side, while maintaining discipline on margin and ensuring that, based on the guidance we provided, our operating margin will not go backwards year over year.

Christopher DelOrefice: Yeah, thanks. Thanks for the question. I mean, one is, you know, pleased with the strong execution through the P&L in Q1, which gives us confidence to deliver against our full-year goals, increase our operating profit commitments at the low end and the midpoint, and certainly, as you noted, raising EPS, both due to the operating profit increase and share buybacks. I'll go back to the principles. Our goal is to maximize value creation through driving increases in operating profit. As we start the year, we'll have opportunities both on the leverage side and both on the invest to grow slide while maintaining discipline on margin and ensuring that based on the guidance we provided, our operating margin will not go backwards year over year, and there's opportunities for leverage within that.

Chris DelOrefice: Yeah, thanks. Thanks for the question. I mean, one is, you know, pleased with the strong execution through the P&L in Q1, which gives us confidence to deliver against our full-year goals, increase our operating profit commitments at the low end and the midpoint, and certainly, as you noted, raising EPS, both due to the operating profit increase and share buybacks. I'll go back to the principles. Our goal is to maximize value creation through driving increases in operating profit. As we start the year, we'll have opportunities both on the leverage side and both on the invest to grow slide while maintaining discipline on margin and ensuring that based on the guidance we provided, our operating margin will not go backwards year over year, and there's opportunities for leverage within that.

Speaker #5: There's opportunities for leverage within that. So as I think of the balance of the year, I'll point to where we're seeing some strength, right?

Speaker #5: We're seeing some strength in supply chain. You saw shrink play out positively. In the quarter, the supply chain team continues to do a great job in supply chain optimization.

Speaker #5: I think you'll also saw very strong discipline and consistent performance on SG&A. So I would say there's some opportunities in there. But the balance of the year, it's going to be this: how do we thread the needle of trying to optimize growth while capitalizing on where those leverage opportunities and balancing those two to keep trying to deliver against and where we can drive operating profit up?

Christopher DelOrefice: As I think of the balance to, of the year, you know, I'll point to where we're seeing some strength, right? We're seeing some strength in supply chain. You saw shrink play out positively in the quarter. The supply chain team continues to do a great job in supply chain optimization. I think you also saw very strong discipline and consistent performance on SG&A. I would say there's some opportunities in there, but the balance of the year is going to be this, how do we thread the needle of trying to optimize growth, while capitalizing on where those leverage opportunities and balancing those two to keep trying to deliver against and, where we can drive operating profit up.

Chris DelOrefice: As I think of the balance to, of the year, you know, I'll point to where we're seeing some strength, right? We're seeing some strength in supply chain. You saw shrink play out positively in the quarter. The supply chain team continues to do a great job in supply chain optimization. I think you also saw very strong discipline and consistent performance on SG&A. I would say there's some opportunities in there, but the balance of the year is going to be this, how do we thread the needle of trying to optimize growth, while capitalizing on where those leverage opportunities and balancing those two to keep trying to deliver against and, where we can drive operating profit up.

Speaker #3: Fantastic. Very helpful. Best of luck. Thank you.

Speaker #1: Your next question will come from Simeon Gutman with Morgan Stanley. Your line is now open. Please go ahead.

Speaker #6: Hi everyone. Thanks for the question. So two parts. First, the exit rate comp or what you did, I think, in was it April? I guess is that as good as it gets given the compare step up or was there something unique timing-wise end of the quarter that pushed it down maybe temporarily?

Speaker #6: And then, Chris, just following up to what you said, some of the language you used—trying to optimize or managing both—is it in the plan for SG&A to step down and that's a given, or is it not a given and it's going to take some maneuvering as you work through the back half of the year?

Adrienne Yih: Fantastic. Very helpful. Best of luck. Thank you.

Operator: Your next question will come from Simeon Gutman with Morgan Stanley. Your line is now open. Please go ahead.

Speaker #6: Thank you.

Speaker #5: Yeah. So maybe I'll take SG&A first. We're highly confident in the SG&A execution. The year's playing out as expected. Remember we said we expected double-digit growth in the first half.

Simeon Gutman: Hi, everyone. Thanks for the question. Two parts. First, the exit rate comp, or what you did, I think in, was it April? I guess, is that as good as it gets given the compare step up, or was there something unique timing-wise end of the quarter that pushed it down maybe temporarily? Chris, just following up to what you said, some of the language you used, you know, trying to optimize or managing both. Is it in the plan for SG&A to step down and that's a given, or it's not a given and it's gonna take some maneuvering as you work through the H2 of the year? Thank you.

Speaker #5: That was largely attributable to SpaceNK and the anniversary of Ulta Beauty unleashed investments we made in the back half of 2025. That included wellness and marketplace as an example.

Speaker #5: We simply stepped down into low single-digit growth in the second half of the year because we're going to anniversary over those items. We are investing in the second half of the year.

Speaker #5: And we also have cost optimization that's actually helping to further increase ROI and benefits, putting more back into the business. So you're going to see SG&A consistently play out.

Christopher DelOrefice: Yeah. Maybe I'll take SG&A first. We're highly confident in the SG&A execution. The year's playing out as expected. Remember we said we expected double-digit growth in H1. That was largely attributable to Space NK and the anniversarying of Ulta Beauty Unleashed investments we made in H2 of 2025. That included wellness and marketplace, as an example. We simply stepped down into low single-digit growth in H2 of the year because we're going to anniversary over those items. We are investing in H2 of the year. We also have cost optimization that's helping actually further get ROI and benefit, and put more back in the business. You're going to see SG&A consistently play out.

Chris DelOrefice: Yeah. Maybe I'll take SG&A first. We're highly confident in the SG&A execution. The year's playing out as expected. Remember we said we expected double-digit growth in H1. That was largely attributable to Space NK and the anniversarying of Ulta Beauty Unleashed investments we made in H2 of 2025. That included wellness and marketplace, as an example. We simply stepped down into low single-digit growth in H2 of the year because we're going to anniversary over those items. We are investing in H2 of the year. We also have cost optimization that's helping actually further get ROI and benefit, and put more back in the business. You're going to see SG&A consistently play out.

Speaker #5: What I was articulating is, each year as we have opportunities to either further accelerate top line, that balance of top line versus leverage while maintaining discipline in margin.

Speaker #5: And constantly adjusting those two levers to capitalize on opportunities to drive operating profit up would be the goal as we progress through the year.

Speaker #5: And you saw us do that in Q1. Obviously, there's the macro environment and some uncertainty there. We think this is a prudent guidance with strong double-digit EPS growth, and our goal at the end of the day is to be a consistent compounder of EPS at double digits, and this guide provides that. I think you should feel positive about the strong execution in Q1.

Christopher DelOrefice: What I was articulating is each year, as we have opportunities to either further accelerate top line, that balance of top line versus leverage, while maintaining discipline in margin and constantly adjusting those two levers to capitalize on opportunities to drive operating profit up would be the goal as we progress through the year. You saw us do that in Q1. Obviously, there's the macro environment and some uncertainty there. We think this is a prudent guidance with strong double-digit EPS growth. Our goal at the end of the day is to be a consistent compounder of EPS at double digits, this guide provides that, I think you should feel positive about the strong execution in Q1.

Chris DelOrefice: What I was articulating is each year, as we have opportunities to either further accelerate top line, that balance of top line versus leverage, while maintaining discipline in margin and constantly adjusting those two levers to capitalize on opportunities to drive operating profit up would be the goal as we progress through the year. You saw us do that in Q1. Obviously, there's the macro environment and some uncertainty there. We think this is a prudent guidance with strong double-digit EPS growth. Our goal at the end of the day is to be a consistent compounder of EPS at double digits, this guide provides that, I think you should feel positive about the strong execution in Q1.

Speaker #4: And then I'll take the comp trends. So Q1 played out largely, as we expected, February was in the low double digits. As we left, our weakest comp from fiscal year 2025.

Speaker #4: And then comp growth and margin in April was in the low single-digit range. As Chris shared, we continue to expect our comp sales growth for the year to be between 2.5% to 3.5%.

Speaker #4: And just as a quick reminder, second quarter '26 is our toughest comp comparison on a one-year basis over the strong results that we had in 2025.

Speaker #4: The guide implies high single-digit comp growth on a two-year stacked basis. We are very confident in our ability to grow sales and to deliver our guidance.

Speaker #4: And we have great plans in place to fuel our performance. And I do think that this is where our unique model plays into that.

Kecia Steelman: I'll take the comp trends. Q1 played out largely as we expected. February was in the low double digits as we lapped our weakest comp from fiscal year 2025, comp growth in March and April was in the low single-digit range. As Chris shared, we continue to expect our comp sales growth for the year to be between 2.5% to 3.5%. Just as a quick reminder, Q2 2026 is our toughest comp comparison on a one-year basis over the strong results that we had in 2025. The guide implies high single-digit comp growth on a two-year stacked basis. We're very confident in our ability to grow sales and to deliver our guidance, we have great plans in place to fuel our performance. I do think that this is where our unique model plays into that.

Speaker #4: We can have a consistent track record of delivering sales growth and many different kinds of economic timeframes that are out there. So hopefully that answered your question, Simeon.

Speaker #6: It does. Yep. Thank you. Good luck. Appreciate it.

Speaker #4: Thank you.

Speaker #1: Your next question will come from Dana Telsey with Telsey Group.

Speaker #7: Hi. Good afternoon, everyone. As you think about the sales growth, which is very impressive with transactions and with traffic, as you exited the quarter, how's the exit rate looking forward?

Speaker #7: And just like you had Ulta Beauty World, what are the next events and how do they break out by quarter going forward? And then Chris, as you think about the margin comparisons going forward, either on SG&A or gross margin—whether the merch margin or others—anything we should be mindful of? And how do you think of the investment spend going into the margin profile through the shaping of the year?

Kecia Steelman: We can have a consistent track record of delivering sales growth in many different kinds of economic time frames that are out there. Hopefully that answered your question, Simeon.

Simeon Gutman: It does. Yep. Thank you. Good luck.

Christopher DelOrefice: Appreciate it.

Chris DelOrefice: Appreciate it.

Kecia Steelman: Thank you.

Speaker #7: Thank you.

Operator: Your next question will come from Dana Telsey with Telsey Group.

Speaker #4: I'll start and then I'll turn it over to Chris. Thanks for the question, Dana. Our ticket was up 3.7% in Q1. It was largely driven by product mix, while transactions were up 1.6%.

Dana Telsey: Hi. Good afternoon, everyone. As you think about the sales growth, Kecia, which is very impressive with transactions and with traffic, as you exited the quarter, how's the exit rate looking forward? Just like you had Ulta Beauty World, what are the next events, and how do they break out by quarter going forward? Chris, as you think about the margin comparisons going forward, either on SG&A or gross margin or the merch margin or others, anything we should be mindful of, and how do you think of the investment spend going into the margin profile through the shaping of the year? Thank you.

Speaker #4: And that was in a challenging macro environment. But we are really focused on how we can continue to drive traffic. We're very confident in our marketing and our merchandising plans to really support and to drive our business.

Speaker #4: And our teams are doubling down, particularly in stores, to really drive traffic and the guest conversion through our guest service. Eventing, which we did a lot of events in those last quarter, we're going to continue that trend.

Speaker #4: Loyalty and personalized marketing efforts. You asked a little bit about Ulta Beauty World. We are really focused on creating excitement and energy both in our online platforms and in-store.

Kecia Steelman: I'll start, and then I'll turn it over to Chris. Thanks for the question, Dana. Our ticket was up 3.7% in Q1. It was largely driven by product mix. Our transactions were up 1.6%, and that was in a challenging macro environment. We are really focused on how we can continue to drive traffic. We're very confident in our marketing and our merchandising plans to really support and to drive our business, and our teams are doubling down, particularly in stores, to really drive traffic and the guest conversion through our guest service. Eventing, which we did a lot of events in the last quarter, we're going to continue that trend, loyalty and personalized marketing efforts. You asked a little bit about Ulta Beauty World. We are really focused on creating excitement and energy both in our online platforms and in store.

Speaker #4: And we build great plans around what activities we had last year, and how we continue to improve them even more for this next year.

Speaker #4: I'm pleased with what I see in the Q2 and the back half plans for taking our learnings and continuing to improve always. The teams from a marketing, merchandising, store operations, and digital perspective are all working very, very closely together.

Speaker #4: And I feel great that the go-to-market team has good plans in place for Q2 and the rest of the year.

Speaker #5: Yeah. As you think of the margin and call it the profit profile as we progress through the year—so, one, we actually have a very balanced first half, second half operating profit growth profile, which is positive.

Kecia Steelman: We build great plans around what activities we had last year and how do we continue to improve them even more for this next year. I'm pleased with what I see in the Q2 and the H2 plans for taking our learnings and continuing to improve always. The teams from a marketing, merchandising, store operations, and digital perspective are all working very closely together, and I feel great that the go-to-market team has good plans in place for Q2 and the rest of the year.

Speaker #5: First half is modestly above the second half. Two primary factors there: obviously, slightly higher sales, and then, as you think of gross margin, higher benefits of shrink in the first half of the year is the big difference.

Speaker #5: And we had articulated that, right? We started getting shrink benefits more through the back end of last year. We'll start cycling through success as you move from first half to second half. First half, we'll have stronger gross margin performance.

Christopher DelOrefice: As you think of the margin, and call it the profit profile, as we progress through the year. One, we actually have a very balanced H1, H2 operating profit growth profile, which is positive. H1 is modestly above the H2. 2 primary factors there. Obviously, slightly higher sales. As you think of gross margin, higher benefits of shrink in the H1 of the year is the big difference, and we had articulated that. We started getting shrink benefits more through the back end of last year. We'll start cycling through success. As you move from H1 to H2, H1 will have stronger gross margin performance. Remember, SG&A is going to have the increased cost because of Space NK and the anniversary-ing of prior year investments we made.

Chris DelOrefice: As you think of the margin, and call it the profit profile, as we progress through the year. One, we actually have a very balanced H1, H2 operating profit growth profile, which is positive. H1 is modestly above the H2. 2 primary factors there. Obviously, slightly higher sales. As you think of gross margin, higher benefits of shrink in the H1 of the year is the big difference, and we had articulated that. We started getting shrink benefits more through the back end of last year. We'll start cycling through success. As you move from H1 to H2, H1 will have stronger gross margin performance. Remember, SG&A is going to have the increased cost because of Space NK and the anniversary-ing of prior year investments we made.

Speaker #5: Remember, SG&A is going to have the increased costs because of space NK. And the anniversary of prior year investments we made. When you move to the second half of the year, you have a slight flip where you see the gross margin moderate a bit.

Speaker #5: As planned, you then start seeing the benefits of SG&A driving some margin improvement in the second half of the year, with low single-digit growth.

Speaker #5: So, it's playing out exactly as planned. Remember, we made investments in 2025 that we are going to continue to benefit from—marketplace wellness, just to name a couple.

Speaker #5: But in '26, we're also making investments. We have Agentic AI as a core strategy, and we continue to invest there. Ongoing brand-building investments, as we talked about in the prepared remarks.

Speaker #5: And the personalization initiatives to maximize incremental sales opportunities. So, we feel good about both the investment profile and the actions we're taking to deliver a strong, profitable growth profile for the year, and ultimately deliver double-digit earnings growth.

Christopher DelOrefice: When you move to the H2 of the year, you have a slight flip where you see the gross margin moderate a bit, as planned. You start seeing the benefits of SG&A driving some margin improvement in the H2 of the year with low single-digit growth. It's playing out exactly as planned. Remember, we made investments in 2025 that we're going to continue to benefit from, marketplace, wellness, just to name a couple. In 2026, we're also making investments. We have agentic AI as a core strategy. We continue to invest there. Ongoing brand-building investments that we talked about in the prepared remarks, and the personalization initiatives to maximize incremental sales opportunities. We feel good about both the investment profile and the actions we're taking to deliver a strong, profitable growth profile for the year and ultimately deliver double-digit earnings growth.

Chris DelOrefice: When you move to the H2 of the year, you have a slight flip where you see the gross margin moderate a bit, as planned. You start seeing the benefits of SG&A driving some margin improvement in the H2 of the year with low single-digit growth. It's playing out exactly as planned. Remember, we made investments in 2025 that we're going to continue to benefit from, marketplace, wellness, just to name a couple. In 2026, we're also making investments. We have agentic AI as a core strategy. We continue to invest there. Ongoing brand-building investments that we talked about in the prepared remarks, and the personalization initiatives to maximize incremental sales opportunities. We feel good about both the investment profile and the actions we're taking to deliver a strong, profitable growth profile for the year and ultimately deliver double-digit earnings growth.

Speaker #7: Thank you.

Speaker #1: Your next question will come from Michael Benetti with Evercore. Your line is now open. Please go ahead.

Speaker #8: Oh, hey guys. Thanks for taking our question. Sorry to ask again about the near-term stuff. I think the stock has been a little sensitive to it with the macro that you guys have commented on here.

Speaker #8: But I think it's a high single-digit stack, which would put the second quarter in the maybe 1.5% to 2.5% range. I think you expected the category, last time we talked, to grow 2% to 4%.

Speaker #8: This year, is there any change to that assumption we should think about for the rest of the year, or your ability to maintain share? And then, on gross margin, I guess it's implied to be down about 30 basis points after the first quarter being up 100 basis points.

Kecia Steelman: Thank you.

Dana Telsey: Thank you.

Speaker #8: I'm curious — could you elaborate a bit more on what caused the merch margin to expand, and why we don't expect that to flow through the rest of the year? Also, why can't some of those shrink tailwinds from the first quarter continue, even though you anniversary a little bit in the second half?

Operator: Your next question will come from Michael Binetti with Evercore. Your line is now open. Please go ahead.

Michael Binetti: Hey, guys. Thanks for taking our question. Sorry to ask again about the near-term stuff. I think the stocks have been a little sensitive to it with the macro that you guys have commented on here. I think a high single-digit stack would put Q2 in the maybe one and a half to two and a half range. I think you expected the category, last time we talked, to grow 2% to 4% this year. Is there any change to that assumption we should think about rest of year or your ability to maintain share? On the gross margin, I guess it's implied to be down about 30 basis points after the Q1 being up 100.

Speaker #4: Thanks for the question, Michael. I'll start, and then I'll kick it over to you, Chris. In regards to the industry, what we're seeing is that last year, growth in beauty grew stronger each quarter as the year went on.

Speaker #4: So, we're going against stronger growth in the back half, and we expect that growth to really normalize as a whole. So that's really what we're seeing in the industry.

Speaker #4: We're still committed to share growth at Ulta Beauty, and we feel like that's implied in our guidance and the numbers that we've put in front of you today.

Michael Binetti: I'm curious, maybe a little bit more on what caused the merch margin to expand, why we don't flow that through the rest of the year, or why some of those shrink tailwinds from Q1 can't continue even though you anniversary a little bit in the H2.

Speaker #4: The category is still competitive, and we know others are going to continue to level up the battle for share. Which just means that we're going to have to be even better as we execute through the remainder of the year.

Speaker #4: And we are confident in our plans: brand building, exclusivity, and wellness. And then, just as a reminder, if you look at our total sales, I mean, we came in at 11.1%.

Kecia Steelman: Thanks for the question, Michael. I'll start, and then I'll kick it over to you, Chris. In regards to the industry, what we're seeing is that last year, growth in beauty grew stronger each quarter as the year went. We're going against stronger growth in the back half, and we expect that growth to really normalize as a whole. That's really what we're seeing in the industry. We're still committed to share growth, at Ulta Beauty, and we feel like that's implied in our guidance and our numbers that we've put in front of you guys today. The category is still competitive, and we know others are going to be continuing to level up the battle for share, which just means that we're going to have to be even better as we execute through the remainder of the year. We are confident in our plans.

Speaker #4: That's really strong when you're looking at the total market growth. And where our growth came, that's nothing to be shy of. I'm pretty pleased with the 11.1.

Speaker #4: So again, I guess I would just close out by saying we're staying really close to customer needs, and we're continuing to sharpen our operational focus.

Speaker #4: We're making the targeted investments that Chris and I both talked about to really strengthen our long-term competitive advantage. And we are playing our game and continuing to lean into the places where we can really continue to differentiate ourselves.

Kecia Steelman: Brand building, exclusivity, and wellness. Just as a reminder, if you look at our total sales, we came in at 11.1%. That's really strong when you're looking at the total market growth and where our growth came. That's nothing to be shy of. I'm really pleased with the 11.1%.

Speaker #4: Chris?

Speaker #5: Yeah. So, I would just add one thing on sales. Obviously, our total guidance is 6 to 7 percent, which, of course, includes the one-time benefit from Space NK.

Speaker #5: But even taking that out, the total growth at Space NK, strong mid-single digits, well within our long-term algorithm, and to Kecia's point, competitive from a share standpoint.

Michael Binetti: Got it, yeah.

Kecia Steelman: Again, I guess I just would close out by saying, we're staying really close to the customer needs, and we're continuing to sharpen our operational focus. We're making the targeted investments that Chris and I both talked about to really strengthen our long-term competitive advantage. We are playing our game and continuing to lean into the places where we can really continue to differentiate ourselves. Chris?

Speaker #5: So we're going to continue to execute this. I think this is more us cycling through success from the prior year. And you have a strong two-year double stack in high single digits through the balance of the year.

Speaker #5: So, feel good about that. Look, as you think of gross margin, it's about flat for the year. So I think we're managing gross margin nicely.

Speaker #5: To your point, and this was planned, we expected larger shrink benefits early in the year. That was a conscious effort. We started realizing that benefit toward the back end of the year.

Christopher DelOrefice: Yeah. One, I would just add one thing on sales. Obviously, our total guidance is 6% to 7%, which, of course, includes the one-time benefit from Space NK. Even taking that out, the total growth at Space NK, strong mid-single digits, well within our long-term algorithm. To Kecia's point, competitive from a share standpoint. We're going to continue to execute this. I think this is more us cycling through success from the prior year, and you have a strong two-year double stack in high single digits through the balance of the year. Feel good about that. Look, as you think of gross margin, it's about flat for the year. I think we're managing gross margin nicely. To your point, and this was planned, we expected larger shrink benefits early in the year. That was a conscious effort.

Chris DelOrefice: Yeah. One, I would just add one thing on sales. Obviously, our total guidance is 6% to 7%, which, of course, includes the one-time benefit from Space NK. Even taking that out, the total growth at Space NK, strong mid-single digits, well within our long-term algorithm. To Kecia's point, competitive from a share standpoint. We're going to continue to execute this. I think this is more us cycling through success from the prior year, and you have a strong two-year double stack in high single digits through the balance of the year. Feel good about that. Look, as you think of gross margin, it's about flat for the year. I think we're managing gross margin nicely. To your point, and this was planned, we expected larger shrink benefits early in the year. That was a conscious effort.

Speaker #5: And we're going to cycle through that success. So that's one of the drivers. Obviously, with some moderating growth, there's a little bit of de-leverage in there in gross margin.

Speaker #5: But it's not substantive. Supply chain continues to drive strong optimization, right? And they've been absorbing the fuel impact, which was something that wasn't fully planned.

Speaker #5: It's not significant. For total Ulta, but its actions that they're taking to own that. So feel good about gross margin being flat for the year.

Speaker #5: And we're going to continue to execute against the P&L, be disciplined on SG&A, and focus on that balance of finding leverage opportunities or investing to grow.

Christopher DelOrefice: We started realizing that benefit towards the back end of the year. We're going to cycle through that success. That's one of the drivers. Obviously, with some moderating growth, there's a little bit of deleverage in there, in gross margin, but it's not substantive. Supply chain continues to drive strong optimization, right? They've been absorbing the fuel impact with something that wasn't fully planned. It's not significant for total Ulta, but it's actions that they're taking to own that. Feel good about gross margin being flat for the year. We're going to continue to execute against the P&L, be disciplined on SG&A, focus on that balance of finding leverage opportunities or investing to grow to deliver against our operating profit commitment.

Chris DelOrefice: We started realizing that benefit towards the back end of the year. We're going to cycle through that success. That's one of the drivers. Obviously, with some moderating growth, there's a little bit of deleverage in there, in gross margin, but it's not substantive. Supply chain continues to drive strong optimization, right? They've been absorbing the fuel impact with something that wasn't fully planned. It's not significant for total Ulta, but it's actions that they're taking to own that. Feel good about gross margin being flat for the year. We're going to continue to execute against the P&L, be disciplined on SG&A, focus on that balance of finding leverage opportunities or investing to grow to deliver against our operating profit commitment.

Speaker #5: to deliver against our operating profit commitment.

Speaker #8: Thanks for all the clarification, guys.

Speaker #1: Your next question will come from Mike Baker with D.A. Davidson. Your line is open. Please go ahead.

Speaker #9: Great, thanks. I wanted to ask about TikTok Shop. Our tracking suggests that it's growing nicely—maybe even doubling its daily sales versus when it started, I don't know, about six weeks ago or so.

Speaker #9: When is this big enough to show up materially in the comps? And I remember last quarter, you were still debating whether it's going to be included in the traffic numbers.

Speaker #9: I'm just wondering if it is in these traffic numbers.

Speaker #4: Thanks for the question, Mike. I will just start and then maybe Chris can add. What we've done to date is we've really anchored in only at Ulta exclusives.

Michael Binetti: Thanks for all the clarification, guys.

Operator: Your next question will come from Mike Baker with D.A. Davidson. Your line is open. Please go ahead.

Speaker #4: We've got 17 brand and 30 exclusive bundles. We do see that it's not just an e-com play. We also see a halo impact for stores.

Michael Baker: Great. Thanks. I wanted to ask about TikTok Shop. Our tracking suggests that it's growing nicely, maybe even doubling its daily sales versus when it started, I don't know, about 6 weeks ago or so. When is this big enough to show up materially in the comps? I remember last quarter you were sort of still debating whether it's going to be included in the traffic numbers. I'm just wondering if it is in these traffic numbers.

Mike Baker: Great. Thanks. I wanted to ask about TikTok Shop. Our tracking suggests that it's growing nicely, maybe even doubling its daily sales versus when it started, I don't know, about 6 weeks ago or so. When is this big enough to show up materially in the comps? I remember last quarter you were sort of still debating whether it's going to be included in the traffic numbers. I'm just wondering if it is in these traffic numbers.

Speaker #4: Our next focus area on this, because we're still in the early phases, is that we're looking at increased exclusive bundles that are launching, both single-brand and multi-brand.

Speaker #4: And also what I call first moments with the brand partners, which is like early access launches and select exclusives that creates a lot of excitement.

Speaker #4: We don't expect this to be cannibalization no cannibalization with our overall business. We think it's complementary of our e-com business. And we do think it can bring a new guest in.

Kecia Steelman: Thanks for the question, Mike. I will just start, and then maybe Chris can add. What we've done to date is we've really anchored in only at Ulta exclusives. We've got 17 brand and 30 exclusive bundles. We do see that it's not just an e-com play. We also do see a halo impact for stores. Our next focus area on this, because we're still in the early phases, is that we're looking at increased exclusive bundles that are launching both single brand and multi-brand. Also, what I call first moments with the brand partners, which is like early access launches and select exclusives that creates a lot of excitement. We don't expect this to be cannibalization with our overall business. We think it's complementary of our e-com business. We do think it can bring a new guest in.

Speaker #4: There are two things that we are really looking at. The first one is that we think this is a way that we can expand guest acquisition.

Speaker #4: A younger consumer is engaging with TikTok. So it's about new member acquisition. The members, when they come through, of course, that counts into our loyalty program.

Speaker #4: And the second is when they're already shopping in this platform. And why would we not want to participate in this activity with Gen Z, millennials, Gen Xers?

Speaker #4: While there's some inherent sales opportunity to us, we really think it's more about acquisition and marketing and getting that guest into our overall ecosystem.

Speaker #4: So, the main focus is not necessarily to drive e-commerce revenue. It's really to get a new guest into our database and to be front of mind and center where the guests are already shopping today, which is—one of the new places is on TikTok.

Kecia Steelman: There's two things that we are really looking at. The first one is that we think this is a way that we can expand guest acquisition. A younger consumer is engaging with TikTok. It's about new member acquisition. The members when they come through, of course, that counts into our loyalty program. The second is when they're already shopping in this platform, and why would we not want to participate in this activity with Gen Z, millennials, Gen Xers? While there is some inherent sales opportunity, to us, we really think it's more about acquisition and marketing and getting that guest into our overall ecosystem. The main focus is not necessarily to drive the e-commerce revenue.

Speaker #5: Yeah, I mean—I'm sorry. No, go ahead.

Speaker #9: I was going to ask, just as a follow-up, I was going to I guess a follow-up, but ask about somewhere there's something better in your operating profit dollars.

Speaker #9: You've maintained the sales and comps. You've maintained the gross margin. You seem to have maintained the SG&A. I know it's small, but at the lower end, you did increase the operating income growth.

Speaker #9: So is that more, I suppose it must be, on the SG&A line—still uplift in sales, but maybe uplift than previously thought?

Kecia Steelman: It's really to get a new guest into our database and to be front of mind and center where the guests are already shopping today, which is one of the new places is on TikTok.

Speaker #9: Or where does that increase at the low end of the operating profit dollars come from?

Speaker #5: Yeah. So the way I would the way I would frame it is when you look at how we executed Q1, we saw strong execution both in gross margin and SG&A.

Christopher DelOrefice: Yeah. I mean.

Chris DelOrefice: Yeah. I mean.

Michael Baker: Fair enough. Oh, sorry.

Mike Baker: Fair enough. Oh, sorry.

Christopher DelOrefice: No, go ahead.

Chris DelOrefice: No, go ahead.

Michael Baker: I was going to ask, just as a follow-up, ask about somewhere there's something better in your operating profit dollars? You've maintained the sales and comps. You've maintained the gross margin. You seem to have maintained the SG&A. I know it's small, but at the lower end, you did increase the operating income growth. Is that more, I suppose it must be on the SG&A line, still up less in sales, but maybe up less than previously thought, or where does that increase at the low end of the operating profit dollars come?

Mike Baker: I was going to ask, just as a follow-up, ask about somewhere there's something better in your operating profit dollars? You've maintained the sales and comps. You've maintained the gross margin. You seem to have maintained the SG&A. I know it's small, but at the lower end, you did increase the operating income growth. Is that more, I suppose it must be on the SG&A line, still up less in sales, but maybe up less than previously thought, or where does that increase at the low end of the operating profit dollars come?

Speaker #5: And that does create opportunities for us to drive operating profit. With that said, again, if you go back to the principle of maximizing value creation, what we want to do is make sure that where we have incremental growth opportunities as well, we're always balancing those trade-offs.

Speaker #5: So I think it's about seeing how the year plays out to continue to not only execute against what we just updated in terms of increased operating profit guidance at the low end and the midpoint.

Speaker #5: But we are balancing that—to capitalize on opportunities as they come—while maintaining discipline in our operating margin profile. We will not go backwards in operating margin, and so we remain committed to that goal.

Christopher DelOrefice: Yeah. The way I would frame it is when you look at how we executed Q1, we saw strong execution both in gross margin and SG&A. That does create opportunities for us to drive operating profit. With that said, again, if you go back to the principle of maximizing value creation, what we want to do is make sure that where we have incremental growth opportunities as well, we're always balancing those trade-offs. I think it's about seeing how the year plays out to continue to not only execute against what we just updated in terms of increased operating profit guidance at the low end and the midpoint, but balancing that to capitalize on opportunities as they come while maintaining discipline in our operating margin profile. We will not go backwards in operating margin, and so we remain committed to that goal.

Chris DelOrefice: Yeah. The way I would frame it is when you look at how we executed Q1, we saw strong execution both in gross margin and SG&A. That does create opportunities for us to drive operating profit. With that said, again, if you go back to the principle of maximizing value creation, what we want to do is make sure that where we have incremental growth opportunities as well, we're always balancing those trade-offs. I think it's about seeing how the year plays out to continue to not only execute against what we just updated in terms of increased operating profit guidance at the low end and the midpoint, but balancing that to capitalize on opportunities as they come while maintaining discipline in our operating margin profile. We will not go backwards in operating margin, and so we remain committed to that goal.

Speaker #4: I would just maybe add, what we focused on last year and what we said we were going to do was drive top-line growth and take share.

Speaker #4: And we were committed to doing that all throughout the year. And this year, we said, "All right, now it's time to take a step back and to drive profitable sales," which Chris was just talking about.

Speaker #4: It's about applying good discipline within the organization to maximize the value of the investments we've made, to continue returning value to our shareholders and drive profitability for our business.

Speaker #4: That's the methodology that we're taking as a leadership team. And I'm really proud of what the team delivered in Q1. And that's what we're committed to looking at for the rest of the year.

Kecia Steelman: I would just maybe add, what we focused on last year and what we said we were going to do was drive top-line growth and take share, we were committed to doing that all throughout the year. This year, we said, All right. Now it's time to take a step back and to drive profitable sales, which Chris was just talking about. It's applying good disciplines within the organization to maximize the value out of the investments that we've made to continue to return value to our shareholders and drive profitability for our business. That's the methodology that we're taking as a leadership team, I'm really proud of what the team delivered in Q1, that's what we're committed to looking at for the rest of the year.

Speaker #9: Fair enough. I appreciate the time. Thank you.

Speaker #1: Your next question will come from Ike Baruchow with Wells Fargo. Your line is now open. Please go ahead.

Speaker #10: Hey, guys. How are you doing? A question on the margin—sorry if you mentioned this in the prepared remarks. The margin guide was flat to up 20 basis points.

Speaker #10: I didn't hear you reiterate that. You went with profit growth. I guess I'm just confirming that it is still flat to 20 basis points.

Speaker #10: And then the follow-up to that, Keisha, is you do have from the analyst day and I know you weren't the CEO, but you have the 12% target that's still out there.

Speaker #10: Is that still something we should use? Or do you believe the business should scale from here? I'm just trying to think about how you think about market share gains and profit growth versus a margin rate.

Michael Baker: Fair enough. Appreciate the time. Thank you.

Mike Baker: Fair enough. Appreciate the time. Thank you.

Operator: Your next question will come from Ike Boruchow with Wells Fargo. Your line is now open. Please go ahead.

Ike Boruchow: Hey, guys. How you doing? A question on the margin. Sorry if you mentioned this on the prepared remarks. The margin guide was flat to up 20 basis points. I didn't hear you reiterate that. You went with profit growth. I guess I'm just confirming that it is still flat to 20 basis points. The follow-up to that, Kecia, is you do have from the Analyst Day, and I know you weren't the CEO, but you have the 12% target that's still out there. Is that still something we should use, or do you believe the business should scale from here? I'm just trying to think about how you think about market share gain and profit growth versus a margin rate. Thanks.

Speaker #10: Thanks.

Speaker #5: Yeah, thanks for clarifying. Yes, in our prepared remarks, we did confirm that there's no change to the operating margin guidance—weeks, but flat to up 20 basis points.

Speaker #5: And we're committed to that in Q1. We executed exactly against our plan. Regarding the 12%—right, the long-term target for margin—was that the question?

Speaker #5: Just to clarify. Sorry.

Speaker #10: Yeah. Just because you're above it and you're calling for scale already. So I'm just kind of curious. Should we not think about the 12% as a target anymore?

Speaker #10: Or is there still potential reinvestment due to competition down the road that you want to give yourself some wiggle room on? I'm just kind of curious.

Christopher DelOrefice: Yeah. Thanks for clarifying. Yes, in our prepared remarks, we did confirm that there's no change to the operating margin guidance. We expect flat to up 20 basis points, and we're committed to that. In Q1, we executed exactly against our plan. Regarding the 12%, right, the long-term target for margin, was that the question? Just to clarify. Sorry.

Chris DelOrefice: Yeah. Thanks for clarifying. Yes, in our prepared remarks, we did confirm that there's no change to the operating margin guidance. We expect flat to up 20 basis points, and we're committed to that. In Q1, we executed exactly against our plan. Regarding the 12%, right, the long-term target for margin, was that the question? Just to clarify. Sorry.

Speaker #5: Yeah. I mean, we haven't changed our long-term guidance. I would say, this year, obviously, we're already ahead of 12%, and we've committed to flat to some leverage of up 20 basis points.

Speaker #5: So, I think that's a strong signal. The goal is going to be to continue to deliver against our long-term value creation algorithm, which is mid-single-digit top-line growth.

Speaker #5: Strong mid-single-digit operating profit. You hear us talking about driving operating profit faster than sales and compounding double-digit earnings growth. So I think that's the framework that we're committed to.

Ike Boruchow: Yeah. Just because you're above it, and you're calling for scale already. I'm just kind of curious, should we not think about the 12% as a target anymore? Or is there still potential reinvestment due to competition down the road that you want to give yourself a little room on? I'm just kind of curious.

Speaker #5: And so I think you see that discipline executing and what we said we would do in 2026, and how we've progressed this year.

Speaker #10: Okay. Thanks, Chris.

Christopher DelOrefice: Yeah. We haven't changed our long-term guidance. I would say this year, obviously, we're already ahead of 12%, and we've committed to flat to some leverage of up 20 basis points. I think that's a strong signal. The goal is going to be to continue to deliver against our long-term value creation algorithm, which is mid-single digit top-line growth, strong mid-single digit operating profit. You hear us talking about driving operating profit faster than sales and compounding double-digit earnings growth. I think that's the framework that we're committed to. I think you see that discipline executing and what we said we would do in 2026 and how we've progressed this year.

Chris DelOrefice: Yeah. We haven't changed our long-term guidance. I would say this year, obviously, we're already ahead of 12%, and we've committed to flat to some leverage of up 20 basis points. I think that's a strong signal. The goal is going to be to continue to deliver against our long-term value creation algorithm, which is mid-single digit top-line growth, strong mid-single digit operating profit. You hear us talking about driving operating profit faster than sales and compounding double-digit earnings growth. I think that's the framework that we're committed to. I think you see that discipline executing and what we said we would do in 2026 and how we've progressed this year.

Speaker #1: Your next question will come from Sydney Wagner with Jefferies. Your line is now open. Please go ahead.

Speaker #11: Hi, thanks for taking our question. Can you just talk about what you view as the primary driver of loyalty within the Ulta ecosystem, and how that differentiates you versus other beauty retailers?

Speaker #11: And then, can you discuss what you guys can do to drive higher frequency of visits within the category or within your consumers? I understand there's some value sensitivity there, but what's driving the higher traffic or that consumer coming back more frequently?

Speaker #11: Thank you.

Speaker #4: Thanks, Sydney, for the question. What I would say about the loyalty program is that it's an easy-to-understand program, and engagement is really high, especially on the app.

Ike Boruchow: Okay. Thanks, Chris.

Operator: Your next question will come from Sydney Wagner with Jefferies. Your line is now open. Please go ahead.

Speaker #4: So we have a great relationship with our guests, and they do understand what the return is for the investment, and a little bit of information from them.

Sydney Wagner: Hi. Thanks for taking our question. Can you just talk about what you view as the primary driver of loyalty within the Ulta ecosystem? How does that differentiate you versus other beauty retailers? Can you discuss what you guys can do to drive higher frequency of visits within the category or within your consumers? Understand there's some value sensitivity there, what's driving the higher traffic or that consumer coming back more frequently? Thank you.

Speaker #4: When you look at where we think that we can really gain value out of the loyalty program, it's really through personalization. When you look at all of the tools and then you layer in AI capabilities into such a 47-million-rich first-party data set, we can really maximize how we're communicating with that guest and offering them—some guests like a GWP, some want increased value, some want a percentage, some want price-point discounts.

Kecia Steelman: Thanks, Sydney, for the question. What I would say around the loyalty program is that it's an easy-to-understand program that the engagement is really high, especially on the app. We have a great relationship with our guests, and they do understand what the return is for the investment and a little bit of information from them. When you look at where we think that we can really gain value out of the loyalty program, it's really through personalization. When you look at all of the tools and then you layer in AI capabilities into such a 47 million rich first-party data set, that we can really maximize how we're communicating with that guest and offering them, some guests like a GWP, some want increased value, some want percentage, some want price point discounts. You name it.

Speaker #4: You name it. I could go on and on with the list and the different ways that you can communicate with them. That's really where the power of this mechanism comes.

Speaker #4: And a lot of times, it's not even about discounts. It's about education. It's about product recommendations. It's how you can continue to help them build the basket and then be predictive on what it is that they might need to be purchasing in the future.

Speaker #4: So, when you look at what the value is of our loyalty program, why they want to stay with us, it's because we have that deep-rooted relationship with them.

Speaker #4: And they do see the value that they get by participating in the program in and of itself.

Speaker #12: I think, Leila, we have time for one more question.

Kecia Steelman: I could go on and on with the list and the different ways that you can communicate with them. That's really where the power of this mechanism comes. A lot of times it's not even about discount, it's about education, it's about product recommendations. It's how you can continue to help them build the basket and then be predictive on what it is that they might need to be purchasing in the future. When you look at what the value is of our loyalty program, why they want to stay with us, it's because we have that deep-rooted relationship with them, and they do see the value that they get by participating in the program in and of itself.

Speaker #1: Oh, our next question will come from—yes, your next question will come from Michael Lasser with UBS.

Speaker #13: Good evening. Thank you so much for taking my question. So, there's been a lot of comments and points made on the call, and it's really feeding into this idea that the beauty category is increasingly becoming more competitive, both from some traditional players like mass merchants as well as the online channel.

Speaker #13: And now you've gotten into what seems like a low single-digit comp for the rest of the year, coupled with gross margin degradation, which further suggests that you need more firepower in order to maintain your market share.

Kiley Rawlins: Layla, I think we have time for one more question.

Operator: Our next question will come from Michael Lasser with UBS.

Speaker #13: So, A, is that a fair interpretation of all this? And B, have you increased your promotional activity or your expected promotional activity in response to what you have seen lately?

Michael Lasser: Good evening. Thank you so much for taking my question. There's been a lot of comments and points made on the call, and it's really feeding into this idea that the beauty category is increasingly becoming more competitive, both from some traditional players like mass merchants as well as the online channel. Now you got into what seems like a low single-digit comp for the rest of the year, coupled with gross margin degradation, is further suggesting that you need more firepower in order to maintain your market share. A, is that a fair interpretation of all this? B, have you increased your promotional activity or your expected promotional activity in response to what you have seen lately? I have a quick follow-up. Thank you.

Speaker #13: And then I have a quick follow-up. Thank you.

Speaker #4: Yeah, thanks, Michael, for the question. When you look at the two-year stack on what we're looking at for the business for the rest of the year, we're in the high single-digit range.

Speaker #4: So, this is not a layup. And I would also say that we're focused on continuing to take share, and we did that this last quarter.

Speaker #4: And that's what this plan continues to look at us being able to do: to be a market share gainer. Beauty has always been a competitive category.

Speaker #4: And I think a lot of people want to play in it because it's attractive. It's got attractive profit margins. But I will say, this is what we do inside and out.

Speaker #4: Beauty and wellness. And we're a trusted beauty category expert. We've got a broad-based assortment with a wide range of prices. No one really does exactly what it is that we do.

Kecia Steelman: Yeah. Thanks, Michael, for the question. When you look at the two-year stack on what we're looking at for the business for the rest of the year, we're in high single-digit range. This is not a layup. I would also say that we're focused on continuing to take share. We did that this last quarter, and that's what this plan continues to look at us being able to do, is to be a market share gainer. Beauty's always been a competitive category. I think a lot of people want to play in it because it's attractive. It's got attractive profit margins. I will say, this is what we do inside and out, beauty and wellness, and we're a trusted beauty category expertise. We've got a broad-based assortment with a wide range of prices. No one really does exactly what it is that we do.

Speaker #4: Newness and discovery drive a lot of the spend. And even when I’m looking at this year, we’ve got an increased focus on exclusivity. Exclusivity, I think, is what can continue to differentiate us.

Speaker #4: And it's not just exclusivity with big brands, because a lot of the big brands we already have. There's really nothing out there that's really what I would call overly meaningful that we don't really have in our assortment today.

Speaker #4: So it's really about exclusivity with an existing brand, or it's about this brand building, which I talked about in the prepared comments—of how do we find and curate and build a brand that can be serving a white space opportunity?

Speaker #4: Because, again, no one has the insights that we do, since we have everything from mass selection and everything in between. So, our plan that we've put in place, or that we've shared in regards to our guidance, is assuming that we are going to continue to be a share gainer in the stack. We're in the high single-digit range, which I think is still very compelling for growth here at Ulta Beauty.

Kecia Steelman: Newness and discovery drive a lot of the spend. Even when I'm looking at this year, we've got an increased focus on exclusivity. Exclusivity, I think, is what can continue to differentiate us. It's not just exclusivity with big brands, because a lot of the big brands we already have. There's really nothing out there that's really what I would call overly meaningful that we don't really have in our assortment today. It's really about exclusivity with an existing brand, or it's about this brand building, which I talked about in the prepared comments, of how do we find and curate and build a brand that could be serving a white space opportunity. Again, no one has the insights that we do because we have everything from mass to luxury and everything in between.

Speaker #13: Thank you very much for that. In my follow-up, can you help calibrate the market's expectations? Should we expect traffic to be down over the next few quarters in light of everything you're seeing?

Speaker #13: And would you think that that's the case for the overall category, that it's just going to be driven by a rise in ticket more than anything else?

Kecia Steelman: Our plan that we've put in place or that we've shared in regards to our guidance is assuming that we are going to continue to be a share gainer in the category. Again, you look at our 2-year stack, we're in the high single-digit range, which I think is still very compelling for growth here at Ulta Beauty.

Speaker #11: Yes. Just to clarify again, we're committed to strong profit growth. As noted in our guidance, we've actually increased the operating profit growth on the bottom end.

Speaker #11: And by definition, the midpoint of the guide is balanced—first half, second half. So it's actually pretty evenly spread. We're making adequate investments to do what Kecia just talked about, which is drive compelling growth and make sure that we're focused on share gains.

Michael Lasser: Thank you very much for that. My follow-up is, can you help calibrate the market's expectations? Should we expect profit to be down over the next few quarters in light of everything you're seeing? Would you think that that's the case for the overall category, that it's just going to be driven by a rise in ticket more than anything else?

Speaker #11: The two-year, the remaining quarters, is strong. And so, we feel really good from a profit standpoint. And you saw that in our updated guidance, right?

Speaker #11: Having the conviction to raise the bottom end. And obviously, we're going to continue to put our cash to work, right? So we increased EPS as well on the back of increased share buybacks by half a billion dollars for the year, from $1 billion to $1.5 billion.

Kiley Rawlins: Yes.

Christopher DelOrefice: Yeah, just to clarify, again, we're committed to strong profit growth. As noted in our guidance, we actually increased the operating profit growth on the bottom end, and by definition, the midpoint of the guide. It's balanced H1, H2. It's actually pretty evenly spread. We're making adequate investments to do what Kecia just talked about, which is drive compelling growth and make sure that we're focused on share gains. The 2-year stacks, again, at high single digits for the balance of the remaining quarters is strong. We feel really good from a profit standpoint. You saw that in our updated guidance, right? Having the conviction to raise the bottom end. Obviously, we're going to continue to put our cash to work, right?

Chris DelOrefice: Yeah, just to clarify, again, we're committed to strong profit growth. As noted in our guidance, we actually increased the operating profit growth on the bottom end, and by definition, the midpoint of the guide. It's balanced H1, H2. It's actually pretty evenly spread. We're making adequate investments to do what Kecia just talked about, which is drive compelling growth and make sure that we're focused on share gains. The 2-year stacks, again, at high single digits for the balance of the remaining quarters is strong. We feel really good from a profit standpoint. You saw that in our updated guidance, right? Having the conviction to raise the bottom end. Obviously, we're going to continue to put our cash to work, right?

Speaker #11: And we have a very nice EPS growth profile, with double-digit growth at about 11.5% at the midpoint.

Speaker #1: Thanks again, Michael. I would just say thank you, everyone, for joining us today. To wrap up, I'd like to thank our guest, our trusted brand partners, and dedicated associates for their engagement and support.

Speaker #1: I remain confident that we are on the right path to drive sustainable, long-term growth and value creation for all of our stakeholders. We look forward to updating you on our progress during our next earnings call on August 27.

Speaker #1: Thank you. And, everyone, have a great evening. Thank you.

Christopher DelOrefice: We increased EPS as well on the back of increased share buybacks by half a billion dollars for the year, from $1 billion to $1.5 billion, and have a very nice EPS growth profile of double-digit growth at about 11.5% at the midpoint.

Chris DelOrefice: We increased EPS as well on the back of increased share buybacks by half a billion dollars for the year, from $1 billion to $1.5 billion, and have a very nice EPS growth profile of double-digit growth at about 11.5% at the midpoint.

Kecia Steelman: Thanks again, Michael. I would just say thank you everyone for joining us today. To wrap up, I'd like to thank our guests, our trusted brand partners, and dedicated associates for their engagement and support. I remain confident that we are on the right path to drive sustainable long-term growth and value creation for all of our stakeholders. We look forward to updating you on our progress on our next earnings call on 27 August. Thank you. Everyone have a great evening. Thank you.

Operator: Thank you for joining. This concludes today's call. You may now disconnect.

Q1 2026 Ulta Beauty Inc Earnings Call

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