Ulta Beauty (NASDAQ:ULTA) CEO Kecia Steelman told investors at a J.P. Morgan event that the company’s recent momentum reflects a mix of clearer strategy, leadership changes, and execution across merchandising, digital, and newer profit streams, while newly hired CFO Chris Dilauris outlined a renewed focus on financial discipline and “harvesting” prior investments.
Steelman cites strategy clarity and leadership buildout as key drivers
JPMorgan Senior Analyst Christopher Horvers opened the discussion by pointing to several initiatives implemented over Steelman’s first 16 months as CEO, including the acquisition of Space NK in the U.K., the launch of Rare Beauty, the rollout of Ulta Beauty on TikTok Shop, and the launch of a marketplace. Horvers characterized the period as a “share inflection story” given that broader industry growth was “pretty similar” across 2024 and 2025.
On the core business, Steelman emphasized brand building, noting Ulta launched “100 new brands” in 2025 and pursued cultural relevance through partnerships and presence at events such as the Cowboy Carter Tour, Lollapalooza, and Coachella. She also cited digital investments that added functionality to e-commerce. For margin-accretive businesses, she highlighted international expansion, wellness, the marketplace, and “UB Media.”
2026 priorities include profitable growth, SG&A discipline, and international expansion
Looking ahead, Steelman said management’s 2026 “guiding principle” is to continue top-line momentum and share gains while also driving “more profitable sales” and improving expense leverage. She specifically cited efforts to bring SG&A “back in line” and moderate capital expenditures after several years of elevated investment.
Steelman also reiterated the importance of stores, calling them “our largest asset,” and said the company is focused on driving higher “profitable volume” and improving turns in existing locations. She pointed to personalization initiatives aimed at Ulta’s “46.7 million loyalty member base,” and said the company plans to expand internationally through Space NK in the U.K., continued store growth in Mexico (where she said Ulta has “9 stores open”), and expansion in the Middle East (where she said Ulta has “3 stores” open).
Steelman added that Ulta is “doubling down” on wellness and marketplace, and highlighted use cases for AI, including guest services platforms and supply chain, expressing enthusiasm for “agentic AI” as a way to enhance efficiency and reduce costs.
Merchandising focus shifts to whitespace, independents, emerging brands, and strategic partners
Asked how Ulta is working with brands to secure hit products faster in an increasingly social media-driven market, Steelman said the company’s approach has shifted from pursuing a long list of missing “big brands” toward finding “white space opportunities” that complement, rather than cannibalize, the existing assortment.
She described four avenues for newness and brand building:
- Large brands (with “a few out there” still targeted)
- Smaller independent brands, citing “Sacred” as “the largest specialty haircare launch in the company’s history,” as well as “Plight Society”
- Emerging brands, highlighting K-beauty and noting she and the company’s merchant leader Lauren recently traveled to Korea to meet with manufacturers and brands
- Strategic partners, with Steelman saying Ulta wants to be viewed as the place “where you build, you scale, you launch, and you globalize”
Space NK: “one plus one equals three,” with U.K. growth the near-term focus
Steelman said she is “very pleased” with the Space NK acquisition, citing the U.K. as a “fast and growing market” and highlighting the ability to retain Space NK’s team and culture. She framed the combination as “one plus one equals three,” with Ulta providing scale, buying power, and operational efficiencies, while Space NK brings strengths in in-store storytelling, prestige/luxury curation, and performance in smaller high-street locations.
Steelman said Ulta’s “primary focus” is “continuing to grow them in the U.K.” She acknowledged there could be a future where Space NK and Ulta concepts “both coexist” in the U.S., but said it is not a top priority.
Category trends: K-beauty strength, GLP-1-related needs, heavier makeup, and fragrance expansion
Steelman said Ulta is the “largest U.S. brick-and-mortar K-beauty retailer,” calling brands such as Anua and Medicube “home runs.” She also said GLP-1 usage is influencing demand, citing impacts to skin elasticity and hair loss and driving trends toward “moisture back into skin” and hair-focused offerings. Steelman added that makeup trends appear to be shifting away from a “clean girl aesthetic” toward heavier looks, including “heavier eye,” “heavier lip,” and renewed contouring.
On fragrance, Steelman said the category continues to trend, with a younger male consumer entering and shoppers increasingly using multiple scents per day. She reiterated Ulta’s stated ambition “to be the number one fragrance destination in the U.S.” and said the company has a plan to achieve it “in the near future.”
Addressing the consumer backdrop, Steelman described beauty and wellness as “self-care” categories that consumers prioritize, and said Ulta’s mass-to-luxury assortment leaves it “well-positioned” to navigate uncertainty. She noted that in February the company had not yet seen consumer impacts and said it would share more in June about first-quarter trends.
On guidance assumptions, Steelman said category growth for 2026 has been communicated as “between 2%-4%,” and that Ulta’s guidance implies a midpoint around 3%. She said her goal is to be “a share gainer, not a share donator.”
Dilauris, who joined in December, said he is focused on balancing investment in the core with newer growth vectors while bringing “financial discipline” appropriate for a “more maturing growth profile.” He cited tools including zero-based budgeting, leveraging existing investments, and a productivity agenda aimed at optimizing profit growth. He also outlined the company’s plan for SG&A growth to step down through 2026, with “mid-teens” growth in the first quarter and a deceleration as the year progresses, while still investing in every quarter.
In a discussion on capital allocation, Dilauris said Ulta plans to increase share repurchases by “almost 50%” to “about $1.5 billion” for the year, up from an initial $1 billion, citing a perceived gap between market pricing and intrinsic value. He emphasized a disciplined approach that seeks to maximize operating profit “but not at the expense of margin.”
About Ulta Beauty (NASDAQ:ULTA)
Ulta Beauty, Inc (NASDAQ: ULTA) is a U.S.-based specialty retailer and beauty services provider focused on cosmetics, fragrance, skin care, hair care, bath and body, and beauty tools. The company operates a dual-format business that combines brick-and-mortar retail stores with an e-commerce platform, offering a broad assortment of national, prestige and mass-market brands alongside its own private-label products. In many locations Ulta also provides full-service salon treatments, positioning the company as a one-stop destination for product discovery and in-store services.
The retailer’s product mix spans color cosmetics, haircare and styling products, skin and body care, fragrance, and accessories, catering to a wide range of consumer preferences and price points.
