Ulta Beauty CEO Kecia Steelman has been in the role for just five months, but she’s already making a noticeable impact, particularly as other retailers struggle in an uncertain market. Under her leadership, the company is regaining momentum after a challenging 2024, which saw declining net sales and a loss of market share in the beauty category.
Ulta Beauty reported its Q1 2025 results on Thursday, which included a net sales increase of 4.5% to $2.8 billion. Comparable sales increased 2.9% compared to the first quarter of fiscal 2024, driven by a 2.3% increase in average ticket and a 0.6% increase in transactions. The company also reported a 3% year-over-year increase in active loyalty members, reaching a record 45 million.
“Consumer engagement with beauty remains healthy, and our insights indicate beauty and wellness remain a top priority for beauty enthusiasts who tell us that they're more willing to make trade-offs in other discretionary areas to maintain their beauty regimens,” said Steelman during Thursday’s earnings call.
At the same time, beauty consumers are cautious and value is an increasingly important priority as they navigate ongoing wallet pressures, explained Steelman. “Many consumers indicate that they're leaning into beauty as a comfort and escape from the stress of macro uncertainty, and we expect this emotional connection will support the category's resilience going forward.”
This is the first earnings call following Steelman's announcement of the "Ulta Beauty Unleashed" plan at the company's Q4 2024 results call in March, aiming to accelerate performance and enable Ulta Beauty to reassert its leadership position in the market.
“First, drive core business growth. Second, scale new accretive businesses. And third, realign our foundation for the future,” said Steelman back in March.
Ulta Beauty concentrated on enhancing guest satisfaction with each touchpoint and guaranteeing their stores were well-stocked, adequately staffed, clean, and welcoming. The teams performed effectively, notably during significant events and holidays, resulting in a highly successful 21-day beauty campaign, along with robust sales for Valentine's Day and Easter, and boosted comparable growth across numerous key product areas for the first time in more than a year, according to Steelman. Most importantly, these efforts resulted in market share gains during Q1 2025.
From a category perspective, fragrance was Ulta Beauty’s strongest performing, delivering double-digit growth, primarily driven by newness in women's and gender-neutral fragrance brands and continued strength in men's fragrance. New and exclusive brands, including XO Khloe by Khloe Kardashian and NOYZ, as well as newness from Valentino and Billie Eilish, contributed to strong category performance.
The skincare and wellness category experienced high single-digit sales growth, fueled by strong performance in bodycare, suncare, and wellness. Prestige skincare sales remained stable during the quarter, while mass skincare saw a slight decrease. Brands such as Tatcha, Naturium, Anua, Maely’s, and the Ulta Beauty-exclusive K-beauty brand Peach & Lily were popular among consumers. Additionally, the expansion of Sol de Janeiro and Touchland contributed to the category's growth.
Haircare was roughly flat for the quarter. While hair color and accessories saw gains, these were balanced out by declines in
haircare tools and mass haircare products. A key driver of novelty in the period was the early April launch of Beyoncé's highly anticipated Cécred haircare line, which featured a unique services activation. Following the successful launch of Cécred, Ulta Beauty announced its role as the official beauty retail partner for Beyoncé's Cowboy Carter Tour. This collaboration will feature curated beauty looks, exclusive product selections, and engaging brand experiences for fans attending tour stops.
Prestige makeup sales were flat this quarter, though Steelman highlighted strong customer engagement for ILIA, Milk Makeup, and DIBS Beauty. New, exclusive product launches from MAC, Estée Lauder, and Lancome helped to balance challenges faced by brands with wider distribution.
Ulta Beauty amped up its eventing efforts this quarter. The company’s annual spring 21 Days of Beauty event lent a significant boost to participating brands. According to Navigo data, the brands that saw the most significant wins during Ulta Beauty’s spring event were Clinique, Ulta Beauty Collection, Redken, La Roche-Posay, e.l.f. Cosmetics, OPI, and The Ordinary, according to Jacob St. John, CEO of Navigo Marketing. The retailer’s key category movements in sponsored searches during the spring sale included bath and body +122%, makeup +108%, haircare +138%, skincare +135%, and fragrance +144%. The event saw high traffic and sales conversion, driven by creator content that generated excitement and substantially increased member engagement.
Additionally, Ulta Beauty held over 20,000 in-store events during the quarter, many through brand collaborations. In April, Ulta Beauty held its first Ulta Beauty World 2025 in San Antonio, Texas. Approximately 1,400 beauty enthusiasts and influencers attended the experiential event, featuring live demonstrations, meet and greets with brand founders, and interactive experiences spanning makeup, skincare, hair, fragrance, and wellness.
During the quarter, Ulta Beauty launched 19 new brands, many of which are exclusive to Ulta Beauty and are driving meaningful growth, including DIBS Beauty, Anua, and Snif. The company also launched nine new wellness brands online, including several nutrition-focused supplements and ingestible brands like Garden of Life, HATCH Mama, and Nodpod.
Ulta Beauty is moving forward with its international expansion, which was first announced earlier this year, and anticipates launching its initial stores in Mexico City, Kuwait City, and Dubai later this year. The much-anticipated launch of the company's online marketplace remains on track for the second half of this year. This initiative is already driving significant brand engagement and is expected to enhance the company's competitive standing against major players such as Walmart, Amazon, and TikTok.
Despite a strong performance and better-than-expected growth in Q1, Ulta Beauty's CFO, Paula Oyibo, stressed the need for a cautious outlook in their fiscal 2025 guidance.
“While the beauty category has historically been resilient through economic downturns, it has not been immune to consumer pressure,” she said. “The operating environment continues to be very dynamic, and the evolving global trade landscape has created more uncertainty related to consumer wallet pressures, especially for the second half of the year.”
Ulta Beauty anticipates net sales to reach between $11.5 billion and $11.7 billion in the following quarter. The company projects comparable sales growth ranging from flat to an increase of 1.5%.
“While uncertainty presents risk, it also provides opportunities, and we are confident in our model and the diverse assortment uniquely position us to win,” said Steelman. “There is still work to be done, and it will take time to drive sustained improvement, but I know that we have the right team and plans in place to build on our momentum and drive sustainable long-term growth.”
