Model Update: 1Q EPS Results

Research evidence excerpt

Model Update: 1Q EPS Results

TD Cowen Ulta Beauty

Global Research June 8, 2026

Industry Growth Approx. Mid-Single-Digits in 1Q Across Both Segments:

■Management confirmed Prestige and Mass both grew mid-single digits in 1Q, up from low-

single-digit growth in 1Q last year.

■Mass growth was price-driven (units flattish), while prestige saw unit growth. Note Ulta

is more skewed to prestige (~70% of sales), which benefits from stronger innovation and

demand trends.

E-Commerce Expected to Continue Outpacing Stores; Both Remain Growth Drivers

Management expects eComm to continue growing faster than stores, with both channels

contributing to growth. Channel mix was a modest headwind in 1Q margin but not a major

driver.

Prestige Share Gains Continue; Mass Dynamics More Challenged: Ulta reaffirmed share

gains in prestige, supported by stronger innovation and category exposure, while noting mass

growth is more difficult due to fragmentation and lower innovation in parts of the category.

Importantly, no evidence of trade-down was seen across income cohorts.

Exclusivity + “Newness” Strategy Evolving Toward Existing Brand Innovation: Given limited

whitespace in large brand additions, Ulta is increasingly focused on emerging and exclusive

brands, as well as newness within existing brand portfolios, including early access and exclusive

launches.

Marketplace Emerging As Brand Incubation Channel: Management indicated select

marketplace brands are being transitioned into core retail assortment, signaling marketplace as

a test-and-learn pipeline for future brand scaling, not just a 3P revenue stream.

Shrink Improvement Broad-Based but Pace of Gains to Moderate

Shrink improvements are being driven by:

■Better data/analytics targeting high-risk stores