Ulta Beauty Q2 FY2026 Earnings: $3.0B in Sales, 3.8% Comps and No Tariff Refund

Ulta Beauty reported net sales of $3.04 billion for the quarter ended August 1, 2026, up 8.9%, and operating income of $379.6 million, up 10.1%. Two other retailers we cover reported the same quarter with operating income doubled or tripled by tariff refunds. Ulta's Form 10-Q does not contain the word tariff, and its gross margin moved by a tenth of a point. The quarter is ordinary retail, which makes it easy to read. Comparable sales grew 3.8%, and the filing credits a larger average ticket. The rest of the growth, by the filing's account, came from new stores and from Space NK, the British retailer Ulta bought on July 10, 2025. From the next quarter, Space NK is in both years being compared.

Every second-quarter figure below is from the Form 10-Q that Ulta Beauty filed on August 27, 2026, the day of its earnings release. The company names a fiscal year for the calendar year it starts in: fiscal 2026 runs to January 30, 2027, and the second quarter is the 13 weeks from May 3 to August 1, 2026. The filings report in thousands of dollars. The ledger keeps every thousand, and the tables here show millions to one decimal.

The Headline Numbers​

Three growth rates sit in that table and they are not the same thing. Net sales grew 8.9%. Net income grew 8.1%. Earnings per share grew 13.3%. The gap between the last two is the share count. Ulta had 4.5% fewer diluted shares than a year ago, because it keeps buying its own stock: $798.6 million of it, including excise tax, in the first 26 weeks of this year.

Net income grew a little slower than operating income because of two small lines below it. Interest swung from $1.4 million of income to $3.7 million of expense, and the company's share of losses at its Mexico joint venture rose to $2.1 million. Both follow from spending cash on Space NK, on buybacks and on new markets.

Revenue Deep Dive​

Ulta reports one segment and does not publish revenue by business. It publishes an approximate mix by category.

Cosmetics is still the largest category and is still shrinking as a share. It was 43% of sales in fiscal 2021. Fragrance and haircare each gained a point this quarter.

The more useful table is how the comparable sales number was built. The filings print the split between average ticket and transactions for most periods.

For the second quarter the 10-Q says only that the increase "was primarily driven by a 3.9% increase in average ticket." It gives no transaction figure. A year earlier the same sentence credited "a 3.7% increase in transactions and a 2.9% increase in average ticket." The ticket alone is now larger than the whole comparable sales increase, and the 26-week transaction figure of 0.8% follows a first quarter of 1.6%. The filing does not say that fewer people shopped. It has stopped saying that more did.

That matters for how to read the release, which calls the period "another impressive quarter of strong sales, profit, and earnings growth." The 10-Q's own description of demand is about the category: "The overall U.S. beauty market expanded in 2025 and the first half of 2026, supported by ongoing consumer engagement with and resilience in the beauty category." It then adds: "Persistent inflationary and macroeconomic pressures have impacted consumer spending habits broadly." Neither document says demand exceeds supply, that supply is tight, or that a launch or a new market is running ahead of plan. Neither says prices rose. A larger ticket can be higher prices, more items or a richer mix, and the filing does not separate them.

On the total, the 10-Q is specific about the causes and silent about the amounts: "The net sales increase was primarily due to increased comparable sales, the acquisition of Space NK, and sales from new stores." Comparable sales grew 3.8% and net sales grew 8.9%. The filing does not print how much of the difference is Space NK. Its fiscal 2025 10-K says the acquisition "is not material to the Company's consolidated financial statements," which is the reason no Space NK revenue figure exists in any filing. We do not estimate one.

The store count shows the same thing in units. Ulta ended the quarter with 1,622 stores: 1,534 Ulta Beauty stores in the United States and 88 Space NK stores in the United Kingdom and Ireland. It opened 34 stores in the first half.

The Margin Story​

Gross margin was 39.1% against 39.2%. The 10-Q gives one reason: "The decrease in gross profit margin was primarily due to the impact of the Space NK business mix." Selling, general and administrative expenses fell to 26.4% of sales from 26.6%, "primarily due to lower incentive compensation and leverage of corporate overhead due to strategic enterprise investments, partially offset by higher advertising expenses."

The segment note breaks those expenses into three lines, which is more than the income statement shows.

Pay grew slower than sales. Advertising grew more than twice as fast. Ulta spent $16.9 million more on advertising than a year ago, in a quarter where comparable sales growth slowed from 6.7% to 3.8% and the transaction count went unreported. The filing's first explanation for the better expense rate is lower incentive compensation.

Depreciation and amortization, which sits inside cost of sales and the expense lines above, was $81.3 million against $71.2 million, up 14.3%, faster than sales.

Now compare this to the two other retailers we covered for the same quarter. All three end their fiscal quarter on August 1, 2026.

The Dollar Tree and American Eagle figures are from our analyses of Dollar Tree's second quarter and American Eagle's. Their gross margins rose by 8.5 and 9.8 points because refunds of tariffs paid earlier reduced cost of sales in one quarter. Ulta's did not move. Neither its 10-Q nor its earnings release mentions a tariff refund, and its fiscal 2025 10-K discusses tariffs only as a risk. The filings do not say why Ulta has no refund, and we do not guess. Ulta's quarter is what the period looked like without the one-off.

The One Big Question: What Is Growth Without Space NK in the Comparison?​

Ulta closed on Space NK on July 10, 2025, three weeks before the end of last year's second quarter. So the year-ago quarter holds Space NK only from that date, and this quarter holds all of it. That is the last time the acquisition adds to a growth rate. From the third quarter, both years include a full quarter of Space NK.

The company's own outlook already reflects this. The release raised guidance for the year.

Net sales grew 10.0% in the first 26 weeks. A full year of 6.7% to 7.2% therefore needs much less from the second half. The arithmetic is ours, built from three filed numbers: fiscal 2025 net sales of $12,392.8 million, first-half fiscal 2025 net sales of $5,636.8 million and first-half fiscal 2026 net sales of $6,199.5 million.

The release calls this "our strong first-half performance" and says the company has "raised our financial guidance for the year." Both statements are accurate. The raised guidance still implies second-half sales growth of 4% to 5%, less than half the first-half rate. The comparable sales guidance says the same in the company's own terms: 4.6% for the first half and 3.2% to 3.7% for the year.

That is the number to hold Ulta to. With the acquisition in both years, growth is comparable sales plus new stores. Ulta added 60 net stores in the United States in each of the last two fiscal years, and comparable sales are now a ticket story.

Tracking a $12 Billion Retailer in Plain Text​

Double-entry bookkeeping makes an acquisition show up exactly where the filings put it and nowhere else. The conventions are in how we model every company. In Beancount, income is negative (a credit) and expenses are positive (a debit).

This is the second quarter as it sits in the ledger:

; Check: −3,035.676 + 1,848.724 + 802.784 + 4.527 + 3.684 + 2.073 + 91.878 + 282.006 = 0 ✓
2026-08-01 * "Ulta Beauty, Inc." "FY2026Q2 Income Statement"
  Income:Revenue                            -3035.676 MUSD  ; net sales
  Expenses:CostOfRevenue                     1848.724 MUSD  ; cost of sales
  Expenses:SellingGeneralAdministrative       802.784 MUSD  ; selling, general and administrative expenses — the filed line
  Expenses:SellingGeneralAdministrative         4.527 MUSD  ; pre-opening expenses — the filing's own line, a labeled posting
  Expenses:OtherNet                             3.684 MUSD  ; interest expense, net — the filing's own line
  Expenses:OtherNet                             2.073 MUSD  ; equity net loss of affiliate (Mexico joint venture) — the filing's own line, printed below income tax expense
  Expenses:IncomeTax                           91.878 MUSD  ; income tax expense
  Equity:Adjustments                          282.006 MUSD  ; net income offset (retained earnings set by balance assertion)

There is one revenue posting. A ledger that wanted to separate bought growth from same-store growth would need a Space NK revenue line, and the filings do not print one. So the ledger does not have one. Comparable sales is a rate the company calculates, and it belongs in a table like the ones above, not in an account.

There is also no refund posting. In the Dollar Tree and American Eagle ledgers, the same transaction carries a second, negative Expenses:CostOfRevenue line for the refund. Here cost of sales is one line because the filing reports one amount and names no one-off inside it.

Where the acquisition does appear is the balance sheet:

2025-02-01 balance Assets:NonCurrent:Goodwill                       10.870 MUSD  ; goodwill
2025-02-01 balance Assets:NonCurrent:IntangibleAssets                0.204 MUSD  ; other intangible assets, net
2026-01-31 balance Assets:NonCurrent:Goodwill                      226.421 MUSD  ; goodwill
2026-01-31 balance Assets:NonCurrent:IntangibleAssets              203.288 MUSD  ; other intangible assets, net
2026-08-01 balance Assets:NonCurrent:Goodwill                      223.146 MUSD  ; goodwill
2026-08-01 balance Assets:NonCurrent:IntangibleAssets              200.200 MUSD  ; other intangible assets, net

For four years these two lines held between $11 million and $12 million together. Ulta grew to $11 billion of sales with almost no acquired assets on its books. At January 31, 2026, after Space NK, they hold $429.7 million.

The path between those dates is the interesting part, and it is only visible across filings. The first balance sheet after the deal, in the 10-Q for the quarter ended August 2, 2025, showed goodwill of $392.6 million and other intangible assets of $5.5 million. That filing called the allocation preliminary. By the fiscal 2025 10-K the company had finished valuing what it bought. Note 3 says the adjustments produced "a corresponding net decrease in goodwill of $167,938" thousand, and the final allocation is $213.8 million of goodwill and $201.6 million of other intangible assets, which Note 8 identifies as an indefinite-lived trade name. Net assets acquired were $399.2 million. So between the first balance sheet and the year-end one, goodwill fell by $167.9 million and a trade name worth half the purchase price appeared. Neither goodwill nor an indefinite-lived trade name is amortized, so that change by itself adds no expense. The small declines since January are exchange rates: the 10-Q's "Effect of exchange rate changes" lines account for $3.3 million and $3.1 million.

One more line arrived with the deal. Ulta had no short-term debt at any year end in the ledger until January 31, 2026. At August 1, 2026 it has $339.6 million: $287.0 million on its own credit line and $52.6 million on Space NK's.

The Multi-Year Arc​

The ledger records each year as the company last presented it. No later filing has restated an earlier year, so every figure equals the one originally filed. Margins are the percentages the 10-Ks print.

Net sales grew 43.6% in four years. Operating income grew 18.2%, and it peaked two years ago. Fiscal 2025 operating income is lower than fiscal 2022's on $2.2 billion more sales.

Gross margin is not the reason. It has stayed between 38.8% and 39.6% for five years. The whole decline is one line. Selling, general and administrative expenses rose from 23.5% of sales in fiscal 2022 to 26.6% in fiscal 2025. In dollars they grew 59.9% over the four years against 43.6% for sales. The fiscal 2025 10-K attributes that year's increase to "higher incentive compensation, higher store payroll and benefits, higher corporate overhead primarily due to strategic investments, and higher store expenses." The 86 Space NK stores are in the fiscal 2025 store count and in its expenses from July 10.

Earnings per share tell a calmer story, and the ledger shows why. Over the five fiscal years Ulta earned $5,873.8 million and repurchased $5,353.2 million of its own shares, by the totals in its statements of stockholders' equity. That is 91% of net income. Shares outstanding fell from 56.3 million at the start of fiscal 2021 to 44.2 million at the end of fiscal 2025, and to 42.8 million at August 1, 2026. Diluted earnings per share were $26.03, $25.34 and $25.64 in the last three fiscal years, while net income fell from $1,291.0 million to $1,153.5 million.

The Verdict: Bull vs. Bear​

Bull Case

• Operating income grew 10.1% in the quarter and 10.9% in the first half, faster than sales in both, after two fiscal years in which it fell.
• The selling, general and administrative expense rate fell to 26.4% from 26.6%, after rising in each of the last three fiscal years.
• Merchandise inventories were $2,406.7 million against $2,407.1 million a year ago on 8.9% more sales. The release credits "improved inventory management."
• Gross margin has held within a point for five years and needed no refund this quarter.
• Guidance went up for sales, comparable sales, operating income and earnings per share, and the release says the company expects to use the remaining $1.0 billion of its repurchase authorization by the end of fiscal 2026.

Bear Case

• Comparable sales slowed from 6.7% to 3.8% in a year, and the transaction count that drove last year's number is absent from this year's filing. The release's "strong sales" is not supported by more shoppers in any figure the 10-Q prints.
• Advertising rose 21.0% to produce that slower growth.
• The updated outlook implies second-half net sales growth of about 4% to 5%, by our arithmetic, against 10.0% in the first half.
• The filing's first reason for the better expense rate is lower incentive compensation, which is not a cheaper way of running stores.
• The balance sheet now carries $423.3 million of goodwill and other intangible assets and $339.6 million of short-term debt, against $11.1 million and none eighteen months earlier, for a business whose sales and profit the filings do not disclose.

Our Take

Ulta's quarter is the cleanest of the three retail reports we modeled for this period, and the least exciting. Nothing in it is a one-off. The same lines that explain the quarter explain the last five years: gross margin that does not move, an expense rate that rose three points, and a buyback large enough to keep earnings per share level while net income slipped. Space NK changed the balance sheet and added to the growth rate for a year. That year is now over. The third quarter is the first test of what the business grows at when the only inputs are the ticket, the traffic and new stores, and the company's own guidance says the answer is about half of what the first half showed.