Good afternoon, everyone My name is Leila, and I will be your conference operator today. At this time, I would like to welcome you to Ulta Beauty’s First Quarter 2025 Earnings Call. This conference is being recorded. — Operator Instructions — 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.

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 2025. Hosting our call today are Kecia Steelman, President and Chief Executive Officer; and Paula Oyibo, Chief Financial Officer. Before we begin, I’d like to remind you of the company’s safe harbor language. Many of our remarks today will contain forward-looking statements, which speak only as of today, May 29, 2025. We refer you to our earnings release and SEC filings where you will find a number of factors, which could cause actual results to differ materially from these forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of today, May 29, 2025. We have no obligation to update or revise our forward-looking statements, except as required by law, and you should not expect us to do so. Following our prepared remarks, we’ll open the call for questions to allow us to accommodate as many questions as possible during the hour scheduled for this call, we respectfully 1 ask to limit your time to one question. If you have additional questions, please re-queue. As always, the IR team will be available for any follow-up questions after the call. And now I’ll turn the call over to Kecia. Kecia?

Thank you, Kiley, and good afternoon, everyone. Today, I’ll highlight overall performance, update you on the progress we made across our strategic priorities and talk to you about our outlook for the future. Fiscal 2025 is off to an encouraging start with the Ulta Beauty team delivering better-than-planned financial performance. For the first quarter, net sales increased 4.5% to $2.8 billion. Operating profit was 14.1% of sales and diluted earnings per share was $6.70. During the quarter, admits considerable macro noise and uncertainty, guests responded positively to key actions that we took to drive our business including improved execution, exciting new and exclusive brand launches, evolved promotional plans and relevant marketing. As a result, we drove improvement across several key performance indicators, including member growth, brand engagement and earned media value as well as in-store conversion and app engagement. Importantly, these efforts resulted in market share gains during the quarter. 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. At the same time, they are cautious and value is an increasingly important priority as they navigate ongoing wallet pressures. Many consumers indicate that they’re leaning into beauty has a comfort and escape from the stress of macro uncertainty. And we expect this emotional connection will support the category’s resilience going forward. 2 Our teams are working through all these dynamics to ensure that we are well positioned to deliver on our guests’ evolving needs and are working in close partnership with our brands to mitigate potential impacts of higher tariffs. In March, I shared our Ulta Beauty unleash plan which is designed to accelerate our performance and enable us to achieve our long-term goals and reassert our leadership position. Today, I’ll show progress we’ve made and highlight the key components of our strategy that drove our first quarter performance. Let me begin with all of our efforts to drive our core business growth where we’re focused on driving excellence in all areas of our operations and strengthening our go-to-market approach. Our teams have sharpened their focus on delighting our guests with every interaction in ensuring our stores are fully stocked, staffed, clean and inviting. Our teams executed well, particularly for key events and holidays, delivering a very successful 21-day beauty campaign, along with strong Valentine’s Day and Easter perfor- mance and drove comp growth across many of our major categories. I am incredibly proud of our store and field teams whose collective efforts drove improved in-store conversion and guest satisfaction and positive comp sales growth in stores for the first time in more than a year. From a category perspective, fragrance was our strongest performing category delivering double-digit growth, primarily driven by newness in women’s and gender neutral fra- grance brands, spring and Valentine’s Day sets and continued strength in men’s fragrance. New and exclusive brands, XO Khloé by Khloé Kardashian and Noise as well as Newness from Valentino and Billie Eilish contributed to strong category performance. Sales in the Skin Care and Wellness category increased in the high single-digit range, driven by robust growth in body care, sun care and wellness. 3 Prestige skin care was flat for the quarter, while mass skin care decreased modestly. New brands, including Tatcha, Naturium and Anua as well as trend-relevant brands, Millies, an exclusive K-Beauty brand, Peach & Lily, resonated with guests while expansions of Sol de Janeiro and Touchland also contributed to category growth. The hair care category was roughly flat for the quarter, with growth in hair color and accessories, offset by decreases in hair care tools and mass hair care. Professional hair care was flat with growth from newness, offset by a timing shift of a key promotional event. Newness was fueled by the much anticipated debut of Beyonce’s Cécred haircare line in early April, which included a unique services activation. Comp sales in the makeup category decreased slightly, driven by mass makeup as strong newness from exclusive brand Morphe and Ulta Beauty collection did not fully offset headwinds from certain brands, which lapped strong newness and social engagement in the period last year. Prestige makeup was flat for the quarter. Guest engagement with newer brands, Elia, Milk Makeup, DIBS as well as exclusive newness for MAC, Estée Lauder and Lancôme offset headwinds from brands, which have experienced increased distribution. Additionally, our spring 21-day of beauty event delivered strong growth for participating brands. Finally, services delivered low single-digit comps, driven by salon and specialty services, including ear piercing and makeup services. We also brought beauty to life in our stores through our always-on eventing strategy, which was amplified in our online channels with new tools that aim to drive greater awareness in sales. We hosted more than 20,000 instore events during the quarter, many in partnership with our brands. Moving to marketing. We’re evolving and reimagining our go-to-market strategy to spark excitement and awareness deepen engagement and attract and retain loyalty members. 4 This quarter, our integrated marketing delivered bold relevant campaigns that elevated brand visibility and drove traffic across all channels. We activated key moments with Precision, our Super Bowl campaign, which celebrated women and sports delivered record- level social impressions and engagement, amplifying reach and cultural relevance on the biggest stage in pop culture. 21 days of beauty and Spring Hall generated strong traffic and conversion, powered by creator led content that build anticipation and drove significant increases in member penetration. Following the successful launch of Beyonce’s Cécred, we announced Ulta Beauty as the official beauty retail partner of our Cowboy Carter Tour, a powerful collaboration featuring curated beauty looks, exclusive product assortments and immersive brand experiences across tour markets. And finally, in April, we hosted our inaugural Ulta Beauty world, an experiential beauty event giving about 1,400 Ulta Beauty fans and influencers the opportunity to explore the best of beauty through live demos with our brands, Brand Founder, meet and greets and interactive experiences across makeup, skincare, care, fragrance and wellness. We are bringing the Ulta Beauty brand to life in new and exciting ways, and our guests are responding. We expanded our active loyalty member base to a record 45 million, up 3% year-overyear, while also driving higher engagement, record social impressions and meaningful earned media value. Turning to brand building, during the quarter, we launched 19 new brands, many of which are exclusive to Ulta Beauty. Newly launched brands like Tatcha, Milk Makeup, Elias, Saltair all performed well and drove strong guest engagement. At the same time, exclusive brands are driving growth, including DIB’s Beauty and influencerled makeup brand, along with Anua, a viral K-Beauty brand and Snif, a clean vegan crude quality free fragrance brand with accessible price points. We’re pleased to see that our 5 brand building efforts are resonating with guests, and we’re optimistic about new brand launches and activations planned for Q2 and the rest of the year. Turning to digital and personalization. We’re accelerating our capabilities to deepen guest connection and drive performance. We’ve expanded automation and real-time content delivery across key digital channels, allowing us to respond faster, personalized at scale and enhance the overall guest experience. We also rolled out new features, including Split Cart capabilities and new Shop My Store app functionality that provides guests real-time visibility to store assortment and inventory. These efforts are translating into stronger engagement, increased relevance and measurable business impact. We look forward to building on our momentum and adding new digital enhancements in the coming quarters. Moving to our second strategic priority to scale new and accretive businesses to capitalize on key growth opportunities and ensure that we remain resilient in a rapidly changing world. As we look to the near-term actions we’ve taken to scale our new businesses, during the first quarter, we supported our wellness efforts with the launch of 9 new wellness brands online, including several nutrition-focused supplement and adjustable brands like Garden of Life, Women’s Care brand, HATCH Mama and sleep-related fan favorite Nodpod. We also continue to enhance and expand our retail media network, UV Media. We capitalized on key opportunities for co-branded ads to support 21 Days of Beauty, which drove engagement and incremental ad revenue. In addition, we began piloting new ad products like connected television and streaming audio and brand support capabilities like our new self-service tool to provide faster, more transparent performance insights. At the same time, we’re making investments to drive our long-term expansion. Our international efforts are progressing through our partnerships. We are targeting our 6 first store openings in Mexico City, Kuwait City and Dubai later this year. And our online marketplace initiative announcement in March has driven meaningful brand interest, and we remain on track for launch in the second half of this year. Finally, moving to our third strategic priority to realign our foundation for the future by streamlining our cost structure, optimizing our ways of working and reenergizing our culture. Our teams are adapting well to our new ways of working, and we are steadily advancing our optimization efforts. During the quarter, we leveraged new AI and machine learning capabilities to drive supply chain efficiencies and launch scheduling and enhanced payroll management tools to optimize our efforts and support our cost-saving goals. We also announced that Lauren Brindley will join Ulta Beauty next week on June 3 as Chief Merchandising and Digital Officer. Lauren will have responsibility for our merchandising, e-commerce, wellness and marketplace strategies and will play an important role in leading our brand-building efforts. With more than 2 decades of global beauty and retail expertise, having most recently served as CEO of Revolution Beauty, Lauren is a proven strategic leader with deep industry expertise, a global perspective and a passion for beauty, and we are thrilled to have her join the team. My sincere thanks to Monica Arnaudo, who will retire next month for shaping Ulta Beauty’s world-class assortment and category innovation and her support during this transition. We wish Monica all the best in her retirement. On our last quarterly earnings call, I talked about our focus on reenergizing our culture. I truly believe that we have the best talent and culture in retail and reigniting this critical competitive advantage has been a key priority. In April, we brought together our field leaders, including more than 1,400 general managers along with corporate and DC leaders and brand partners at our annual field lead- 7 ership conference to celebrate our recent wins, educate on how we can better serve our guests and align on our plans for the future. I walked away so inspired by the passion of the Ulta Beauty team. The shared excitement of our brand partners and the renewed energy to drive our next phase of growth together. It was a great reminder of the power of culture and I know that when we only tap into this unique advantage that makes Ulta Beauty so special, we are unstoppable. To recap, we are encouraged by the progress we made in the quarter and the green shoots we’re seeing as a result of the strategic actions we’re taking. Together, they reinforce my confidence in the power of our team, our model and our plans to drive our long-term growth. As we look to the future, we are executing our go-to-market investments to position stronger growth in 2026 and beyond. The operating environment is fluid, and we will stay prudent and agile to navigate the ever-evolving landscape. While uncertainty presents risk, it also provides opportunities and we are confident in our model and the diverse assortment uniquely position us to win. 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. And with that, I’ll turn it over to Paula to cover the financial results for the quarter and our financial outlook before we take your questions. Paula?

Thanks, Kecia, and good afternoon, everyone. I’ll begin with a discussion of our first quarter results and then share more about how we are thinking about the rest of the year. Starting with the quarter, the Ulta Beauty team delivered strong performance, reflecting better-than-expected growth from comparable sales, favorable shrink results and lower than planned investment spend. 8 Net sales increased 4.5% to $2.8 billion compared to $2.7 billion last year. During the quarter, we opened six new stores, relocated two stores and remodeled four stores. Compara- ble sales increased 2.9%, driven by a 2.3% increase in average ticket and a 0.6% increase in transactions. Other revenue decreased $4 million to $56 million, primarily due to lower loyalty point redemptions and lower income from our credit card program. Looking at the cadence of sales, growth accelerated as we moved through the quarter, reflecting strong guest engagement with product newness and our marketing and promotional events. Echoing Kecia’s comments, we continue to strengthen our go-to-market strategies and optimize our promotions to drive profitable growth. In the first quarter, we eliminated less productive or overlapping offers. Leveraged our member data to deploy new targeted offers and optimized key promotional events like Spring Hall and our Spring Share Event. These efforts created distinct calls to action ensured guest clarity and supported stronger operational execution. As a result, sales growth was more balanced and the impact to gross margin from promotional offers was lower than last year. From a channel perspective, our stores and digital channels contributed to growth, with e-commerce sales increasing about 10% and comp stores delivering growth in the low single-digit range. For the quarter, gross margin decreased 10 basis points to 39.1% compared to 39.2% last year. The decrease was primarily due to deleverage of store and supply chain fixed costs and lower other revenue, which were partially offset by lower shrink. In addition to ongoing benefits from investments in secure fragrance fixtures, associate training and process improvements, we saw meaningful progress, especially in select regions that were more challenged in the first quarter last year. Moving to expenses. SG&A increased 6.7% to $711 million (sic) [ 710.6 million ]. As a 9 percentage of sales, SG&A increased 50 basis points to 24.9% and compared to 24.4% last year. SG&A deleverage due in large part to higher store payroll and benefits and increased store expenses which were primarily offset by corporate overhead leverage. Store payroll and benefit expense increased primarily due to increased selling hours to support guest experience, higher average wage rates and increased health care costs. The growth of store expenses was largely related to brand launches and in-store initiatives. Corporate overhead leveraged for the quarter as we lapped implementation costs associated with key infrastructure investments last year. Additionally, some investment spending initially planned for the first quarter is now expected to shift into later quarters. Operating profit was $402 million (sic) [ $401.8 million ] compared to $401 million (sic) [ $400.9 million ] last year. As a percentage of sales, operating margin decreased 60 basis points to 14.1% of sales. Diluted earnings per share increased 3.6% to $6.70. Moving to highlights from the balance sheet and cash flow statement. We ended the quarter with $455 million (sic) [ $454.6 million ] in cash and cash equivalents. Total inventory increased 11.3% to $2.1 billion, primarily reflecting additional inventory to support new brand launches, investments to improve merchandise in-stocks in key growth categories and the impact of 56 net new stores. Capital expenditures were $79 million for the quarter, reflecting investments in new and existing stores, merchandise fixtures and supply chain investments. Depreciation increased 11% to $72 million compared to $65 million last year, primarily due to new store and supply chain investments. In the first quarter, we returned $359 million of capital to our shareholders through the repurchase of 987,000 shares. At the end of the quarter, we had $2.3 billion remaining under our current $3 billion repurchase authorization. 10 Turning now to our updated outlook. We believe it is prudent to take a cautious approach to our guidance for fiscal 2025. While the beauty category has historically been resilient through economic downturns, it has not been immune to consumer pressure. 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. For the year, we have updated our sales expectations to reflect our first quarter results as well as more uncertainty in the second half. We now expect net sales will be between $11.5 billion and $11.7 billion with comp sales growth in the range of flat to up 1.5%. This outlook reflects the comp growth in the second half could be in the range of down low single digits to up modestly. We continue to expect operating profit will deleverage in the low double-digit range with operating margin between 11.7% and 11.8% of sales. Reflecting our sales expectation and how we are now forecasting a flow of investment spend, we expect operating margin will be more pressured in the second half of the year than the first half. For modeling purposes, our assumptions for the drivers of gross margin deleverage and SG&A growth have not changed since we provided our initial outlook in March. Reflecting these assumptions, we now anticipate diluted EPS for the year will be between $22.65 and $23.20 per share. Before closing, I want to provide some additional context on how we are thinking about the potential impact on our business from the evolving tariff and global trade landscape. For context, in fiscal 2024, only about 1% of our merchandise receipts were direct imports. The remaining receipts came from our portfolio of 600 brands. And we intend to continue to work closely with our brand partners to navigate the evolving environment and limit the financial impact on our business. Beyond merchandise, we have some exposure in indirect spend areas like fixtures and 11 store supplies. However, we are confident we can mitigate any cost increases. In closing, we are encouraged by the improved results our team delivered in the first quarter, and we are being prudent about managing the business. As we look to the rest of fiscal 2025, we intend to invest to strengthen our competitive position and drive long-term profitable growth while also continuing to be thoughtful about pacing and prioritization of our investments. And now I’ll turn the call over to the operator to moderator for the Q&A.

— Operator Instructions — Our first question will come from Rupesh Parikh with Oppenheimer.

So I just want to, I guess, just go back to Ulta Beauty Unleash Plan. It appears to me that you’ve got good traction to date and maybe it’s ahead of plan. So just curious if there’s anything surprising with the efforts under that plan versus your initial expectations?

Thanks, Rupesh, for the question. I would just say that we – first of all, I couldn’t be any prouder than the Ulta Beauty team for really being focused on what the Ulta Beauty Unleash Plan is. What I would say is Q1 reflects our collective effort of the team and our commitment to really improving our overall process. We’ve really sharpened our execution in this quarter. A couple of areas I would call out, the first one would be our in-store execution, really being focused on our guest experience. As Paula mentioned, we’ve been supporting some incremental payroll hours in our stores, and it’s showing and it’s paying off. Our in-stocks also improved through the quarter. 12 Can’t have what you don’t sell. So it’s been great to see the in-stock levels continuing to come back up. And then this marketing efforts, which I was speaking of in my prepared remarks is that we’re doing some things differently this earned media value, how we’re communicating with the guest, how we’re really reactivating the Ulta Beauty brand itself is resonating. We had some earnings from last year’s 21 Days of Beauty event and we had a little bit clearer message, more distinct calls to action, stronger execution. And then assortment newness does play a role in beauty. And the Cécred launch coming in April, we had some newness in MAC some expansions in Live Tinted, Half Magic, DIBS, and our rollout of Sol de Janeiro, it did really have a nice halo effect for our stores. So again, I would just say that I’m really proud of the team’s efforts, I’m encouraged by the actions that everyone is taking as part of this Ultra Beauty Unleash Plan, and it’s resonating with the guests. We’re really focusing on executing our plans and building on the success from this quarter and laying out the groundwork to drive long-term sustainable growth for the future.

Our next question will come from Olivia Tong with Raymond James.

My first question is around the full year outlook of flat to 1.5%. Obviously, it suggests a pretty big deceleration after a very strong quarter. So can you talk about the key drivers of that and the cadence by quarter? And then on pricing and promotion, given the tariff backdrop, several companies are planning to raise prices, how do you think about pricing and promotion for you, you mentioned second half margins are more pressured. Is that strictly related to tariffs? Or are you expecting promo to start to move upward after a good, strong Q1? 13

Thanks, Olivia. I’ll take that from a guidance perspective, and I’ll start with [ wood ] sales. As I shared, we expect our comp sales growth in the range of flat to up 1.5%, and we’ve raised the upper end to reflect our Q1 performance, but we’ve held the low end at flat to reflect the more uncertainty in the second half. I mean just for context, we expect comps in the first half will be in the low single-digit range and then in the range of down low single digits to up modestly in the second half. We’re encouraged by our Q1 performance. We’re recognizing that one quarter doesn’t make a trend and that the environment is pretty dynamic that we’re operating in. And so we believe it’s prudent to continue to take a cautious approach to our guidance. And then I think your second question was related to promo – pricing and promo. What I would say is the – from a promotional perspective, we still – we are expecting promotions to be rational bearing any major economic event, we expect the promotional environment to stay rational. Obviously, things could deteriorate if the consumer deteriorates. But what we’re focusing on many of the things that we talked about earlier, which is really focused on promo optimization and clarity of our offers and making sure that we are driving optimal and profitable growth through our promotional strategy. From a pricing perspective, we are – we’re working with our brand partners. And right now, with the environment is still pretty dynamic and our – like I have said before, our guidance assumes that we’re not anticipating any major changes that we won’t be able to mitigate.

Our next question will come from Susan Anderson with Canaccord Genuity.

I was wondering if you can maybe just talk about the newness and innovation pipeline as 14 we kind of head in through the summer into the back half of the year and holiday, I guess, are you expecting a continued ramp-up in newness and innovation as we go throughout the year. And if there’s anything else you could also share about just with new products coming out.

Well, thank you, Susan, for your question. What I did share earlier is that we are pleased with what we see that’s coming up in the second quarter and the back half of the year. We don’t really want to share specifics around what those newness items are. But what I can say is that it’s a nice balance of cross-category newness, so it’s not only just one category and there’s a nice blend of exclusivity in the newness pipeline also, which is really important to us as we’re continuing to build on our momentum. Our brand building efforts in what our merchants are doing, the work that they’re doing with our brand partners has been phenomenal, and I’m very, very pleased with what I see in the direction that we’re heading in. So I do think that we’ve got a nice cadence of newness and exclusivity within the newness and it’s balanced across the portfolio.

Our next question will come from Korinne Wolfmeyer with Piper Sandler.

I’d like to touch a little bit on the improvements in demand that you saw throughout the quarter and how on your – how you’re kind of like attributing that growth from as we think about improvement in the consumer environment. You’ve had a lot of consumer engagement initiatives going on, several events that you have been investing in. So how are you thinking about market improvement versus your own initiatives and then even competitive intensity throughout the quarter and how that impacted the growth? 15

Yes, I’ll start. So I’ll start with the competitive intensity first. Beauty has always been a very competitive category because it’s got attractive margins, and it’s attracted a variety of people in the category. But beauty and wellness is really what we do. The Ulta Beauty Unleash Plan is designed to really help us accelerate and amplify our differentiation. The pipeline of newness coming I feel gives us confidence in us continuing to be able to drive share. Again, this was the first time in a while that we were able to really drive share across the category. So I’m pleased with that. When you look at just our category performance, it was really balanced across the portfolio.The trends that we’re seeing in makeup Hair Care, Skin Care, Wellness and Fragrance. Skin Care, Wellness and Fragrance were our stronger driver categories, but we really feel that we’re moving in the right direction there. Hair Care and Makeup are two categories that we already own a lot of shares. So for us to continue to leverage and grow those two categories is a little bit harder for us. But I still feel like there’s some green shoots for us to continue to grow. If you look at the industry as a whole, the beauty category while we see it kind of normalizing after several years of pretty extraordinary growth, the beauty category within the industry grew low single digits in Q1. Mass growth was fairly consistent and Prestige slowed but remained overall positive. But we expect overall that beauty will grow in line with the historical average over the next few years of that 2% to 5%, which is what we shared at our October Analyst Day. So thank you for the question, Korinne, I appreciate it.

Our next question will come from Christopher Horvers with JPMorgan. 16

There you go. Can you hear me now?

Yes, we can hear you, Chris.

So I wanted to follow up on that last question. I mean obviously, share performance is there’s puts and takes to that. You saw Sephora at Kohl’s, I think they comped one, 3.5 years into launching all these stores. So some of that is the fading of that headwind, which you’ve talked about for a while now, some of that seems to be execution in stocks, digital – and marketing and digital. So maybe disaggregate how much do you think it was just – maybe just the fade of this headwind versus your better execution and related to that, can you talk a little bit about how much the ERP disruption hurt the second quarter and how you’re thinking about where the business is now and how that proceeds forward.

Yes. Well, what I would say, it’s really hard to quantify exactly what the drivers are, but I’m a big believer in controlling what you can control. And while we’re seeing improvements in the trend of those stores that were impacted by physical points in distribution, we kind of expected that, and we built that into our plan. We do believe that the lapping of the new opening and the impact of our operational efforts both are contributing to our overall performance. In regards to the ERP disruption that we had with in-stocks, again, as I mentioned earlier in a response, you’ve got to have a product to be able to sell it to the guest. And we’re just doubling down and making sure that we’re giving the very best guest experience that we 17 can in our stores making sure that we have great marketing campaigns to drive the traffic into the store and making sure that we have the products for the guests when they’re coming in and giving a great, great guest experience. And Again, it’s kind of retail 101. It’s about being focused and controlling what we can control in a pretty dynamic and ever-changing environment out there. But I do believe we – this was the quarter – second quarter was when we were starting to really hit the challenges a little bit with our in-stocks, and we do think that there’s some upside potential to next year. And then last year, in the second quarter, we did have a lot more promo activity that was happening. June and July were a little tougher for us from a sales comp perspective. And we are also seeing that we’ve got better marketing plans in place from some learnings that we had last year. And I would also say just even kind of the cadence of sales that we saw from the first quarter this year, we came in the gates a little softer, and we started to see pickup in March and then April, and we are seeing stronger trends coming in May, but it’s – summer is a tough, tough month for – quarter for Beauty. Last year, Q2 was one of our tougher quarters from a comp perspective. And there’s a lot of unknowns out there. Well, we’re executing better, we’re having better marketing campaigns, and we are also going to be in-stock. There’s a lot of uncertainty out there with the consumer and their wallet and how they’re going to spend. But all of the things that we can control and that we’re leaning into to make sure that we’re positioned to perform as best as we can, I feel like we’re hitting on all of those cylinders.

Our next question comes from Simeon Siegel with BMO Capital Markets.

18 How are you thinking about ticket versus transactions embedded within the full year guide? And just in general, as you think about the top line opportunities going forward? And then Paul, I think you mentioned a corporate overhead expense timing shift. Could you just quantify that or give it any order of magnitude?

I can take the ticket. And – in Q1, we saw an increase in average ticket and it was primarily driven by an increase in average selling price, and that was offset by fewer units per transactions. And as we think about that average ticket, the increase is really with the selling price driven by kind of shifts in category and brand mix and as well as reflective of lower promotionality that we saw in the quarter. What I would say is we don’t necessarily forecast or provide the specifics around what we’re expecting or planning from a ticket and transaction perspective because, obviously, there’s many things that contribute to the ticket and the transaction performance. And then from a corporate overhead perspective, really, what I would say is we were thoughtful about the pacing and the prioritization of this is an investment year we shared, we talked about that we’re investing this year to really orientate ourselves for future longterm growth. And our spin was – it came out of the gate a little as we thought about the timing of some of these wins and shifts in project time lines and resource plans, it’s typical. We – that was a little slower coming out of the gate in Q1. It started to tick back up at the end of the quarter. And that’s been – it’s kind of moving or shifting into the later part of the year. So that was one of the major drivers for the corporate overhead.

Our next question will come from Kate McShane with Goldman Sachs. 19

Hope you can hear me. One of your comments on the call was that there was still an offset from brands that had expanded their points of distribution and it impacting your business. Just given the initiatives you were doing. Are you seeing a more muted impact from that increased distribution? And how do you think, as increased distribution is kind of maybe part of doing business now, the industry could be maybe better segmented? Or is that something that you would expect?

Well, thanks, Kate, for the question. I would just say beauty and wellness is what we do. And when a lot of other players are trying to come into this space, this is where we are the experts. We have a leading loyalty program, our omnichannel offering is anchored in that human connection, the in-store and that digital powerful connection that combo really does set us apart. And we do leverage our deep and proprietary understanding of the beauty guests to create absolutely the best and most personalized digital experience in beauty. Also back in combo with our newness and the confidence that we’ve got in our pipeline, it just creates this halo effect. Again, the category has always been competitive. And as I shared earlier, while we are seeing some trends in some of these stores that were impacted by physical points and distribution, we’re just going to continue to lean in to where it is that we just do well. We do really well in our stores, we’re continuing to invest in our digital channels, we’re elevating our personalization, leaning into wellness, and our brand building, and it’s hitting on all of those cylinders that are part of the Ulta Beauty plan, I believe that’s going to help us continue to be really successful this year and beyond.

20 Our next question comes from Oliver Chen with Cowen and Company.

This is Katie on for Oliver. We’d like to touch a little bit on the marketing strategy. What do you think has really worked better than expected? And where do you see more opportunity to leverage social media?

Okay. Thank you for the question. Again, it’s really taking our deep knowledge and understanding of our loyalty member base and elevating that personalization, that connectivity and communicating with them in the ways that they best feel suited. I would say the one thing that’s changed a little bit in this last year, more recently, is that we’re really activating under our master brand of Ulta Beauty and that we’re talking a lot more about Ulta Beauty as the place to go and connecting the possibilities of beauty when you come in and you shop with us. It’s not just a bunch of brands in our store. It’s about shopping Ulta Beauty and trusting us because we’ve done a lot of work and we’ve helped to curate that brand assortment for you. Just activating an EMV and being very, very focused on our earned media value and how we can really activate in what I call authentic ways versus overly produced ways that are genuine and have that connection with the guest makes all the difference in the world. We’ve got to be where it’s socially relevant and where it makes sense for us to be like Super Bowl. We really never had an activation like we did before being part of the Cowboy Carter Tour, that’s something we’ve never done before. The Ulta Beauty world where I mean, I myself was almost tired of seeing so many points of presence on my TikTok and my Instagram because we pretty much taken over because of the excitement of our super fans that were out there along with influencers. And I think that the whole area in Florida 21 as other convention next year is sold out. People are just really excited. And I think when you can create that kind of energy and excitement in a true authentic way that connects with the guest and they view Ulta Beauty not just as a place to go to buy just things, but a place to go to help you feel better about yourself that’s where the magic really happens. So I would say that’s what the difference I feel is happening right now today.

Our next question comes from Krisztina Katai from Deutsche Bank.

Congrats on a great quarter. Hopefully, you can hear me. Kecia, I wanted to get your vision for Ulta’s brand and product strategy. Just how do you think about opportunities for better brand curation and also better personalization with loyalty to really give guests that great experience that you referenced. It seems like you’re already on your way, but we’d just love to get your thoughts in terms of further unlock and opportunities. And then secondly, just if you can help contextualize how UB Media can help you stand out with your brands in an increasingly competitive field.

Great. Well, thank you for the question, Krisztina. I’ll start with the brand building first because it just kind of follows from my previous response, is that we’re really focused on targeting 20 high-potential exclusive brands that are enhancing – we’re enhancing some investment. We’re looking at this cross-functional ecosystem that’s going to support the brand growth and an elevated joint business planning that includes the stores – unlocking our associates in the stores, from our brand education, bespoke marketing levers, just to name a few. 22 We launched several exclusive brands in the first quarter that I mentioned earlier, Cécred and Anua, but we’ve also got some expansions in some growth categories of brands that we carry like Half Magic, Live Tented and DIBS. But we’re balancing it, it’s not just on exclusive brands or new brands, It’s also established brands like MAC and Estée Lauder and Morphe that we can continue to lean in and really help them authentically grow. Brand building is very important to Ulta Beauty, and we’re going to be continuing to invest in these brand-building capabilities to really accelerate and support acquisition of the high-growth and exclusive brands, while we’re really building upon these established and merchandising brands at the same time. In regards to this personalization, we are just going to continue to invest in our capabilities to increase our relevance. It’s a very iterative process as we roll out because we are tweaking in real time their frequency, and we’re seeing what really works and resonates with the guest. We have this partnership with Adobe that we’ve just launched that really does enhance our ability to deliver tailored offers, experiences and communication across multiple channels in the right moment that makes sense for the guest. By doing this, it allows us to leverage our understanding of the guest journey and their Ulta Beauty profiles and how they behave in the segmentation and also helps us predict their shopping decisions. So the fact that we’ve got 45 million loyalty members in our database, it’s a very rich ability for us to leverage our marketing campaigns. And then the last question you had, you had a 3-parter on me here, Krisztina, is around UB Media. And what I would say – what we’ve leaned in to UB Media is really I’ll get it down to 3 things. It’s about better reporting for our brands. We’ve heard loud and clear. They need to understand when they’re investing, what are they getting back for their investment. We’ve got proprietary tools that are now sharpened, we’re rolling out and hearing great brand feedback. 23 The second is having enhanced products in ways that they can really partner with us CCTV as a connected TV is a great example of that in streaming audio. We’re going to continue to lean into that. And the third is just really expanding our reach with nonendemic promotional products and services in our partnership with — indiscernible — is allowing us to do that. So those are the three things that we’re really leaning into. We’re happy with the progress we made in the quarter, and we’re going to continue to lean into UB Media in the future.

Our next question comes from Mark Altschwager with R.W. Baird.

First, the 10% growth in e-commerce, that’s the strongest we’ve seen in a while, and maybe speak to some of the drivers to acceleration there that are unique to e-commerce? Is this the Adobe unlock that you just referenced and then just any margin implications to consider as you begin to drive some mix shift back to e-commerce.

Yes. Thank you, Mark, for the question. I would just – I would say that our enhancements that we’re continuing to lean into like Split Cart, BOPIS, Shop My Store, we’re continuing to invest in our e-commerce platform, along with being really thoughtful around how we’re communicating value and keeping engagement on our app, specifically. More than 60% of our e-commerce sales are now coming from the app. And with our investments that we’ve made to be a little bit more fluid we can, in real time, if we’re running a promotion we see it’s not resonating, we can in real-time adjust and change how we’re showing that app to our guests. And it’s just – the power of the speed and the agility in what we could be a lot more agile is really helping us in that channel. 24 We have another launch that’s coming up really soon that I’m very excited about, and that’s our subscribe and save online. Replenishment is another key category. I think that’s going to help us really continue to drive our e-commerce business. But it’s not just the e-com that we’re focused on, it’s also the stores, 80% of our sales are still coming through our store channels. So we want to make sure that we’re continuing to keep all channels live and active and continue to keep them engaged.

And then, Mark, I’ll just add to your question with regards to margin implications from e-commerce growth. I mean, what I would say is we came into the year expecting ecommerce growth, and we have seen it for a couple of years, and that’s one of the reasons why we’ve been really intentional about improving channel profitability. We’ve expanded our various fulfillment options, which helped to mitigate our margin pressures. And so as I think about kind of gross margin and gross margin pressure, the channel mix isn’t the largest driver of that.

Our next question will come from Michael Lasser with UBS.

Can you comment a little bit more on the momentum into the current quarter? And what you are seeing that further perpetuates your caution into the back half of the year, meaning what would cause your comps to go negative outside of the macro. And if you maintain your momentum, how should we think about the flow-through if you do better than what’s embedded in your guidance.

Yes, I’ll start, and maybe Paula can add some color. It’s still early. And while we’re very encouraged by the strong progress, it’s going to take a little bit of time to see like what’s 25 going to happen here. We’re operating right now in a very dynamic environment. We have limited visibility to the global trade landscape, which is continuing to evolve and change, there’s a lot of uncertainty out there. And as we’ve all seen, things can change really quickly. Consumers are cautious and valuefocused as they’re managing their ongoing wallet pressures. And while they tell us that they intend to prioritize beauty and wellness, that’s what they say, but they could also do something very different depending on the environment. So we’re being really prudent is what I would say and that our outlook is reflecting the current trends and is a bit risk adjusted to reflect the increased uncertainty of the macro environment in our expectations. And we wouldn’t see what’s going to happen to continue to drive sustained improvement in our performance before we really fully realize the benefits that we’ve been investing in. And there’s just so much unpredictability out there with the guests and where they’re going to be ending up spending their wallet dollars. Anything you would add, Paula? No, okay.

Our next question comes from Michael Baker with D.A. Davidson.

Okay. Well everyone said, hopefully, you can hear me with this new online system. I wanted to ask about competition. I know others have asked it, but I’ll ask it another way. We get it’s always competitive, but it does seem like it’s less competitive from Sephora because of the timing of their rollout and what they reported today. But it seems to me at least that some of the online competition, Amazon, maybe Walmart’s marketplace, maybe TikTok has gotten more intense. So bigger picture, is it more 26 competitive now than it has been less competitive, the same? It probably can never be the same. It’s always going to be more or less. But can you sort of put that in context for us?

Yes. I don’t think it’s gotten any less competitive. I wouldn’t – I would also say I don’t know that it’s got anymore. I think it’s probably pretty consistent from a competitive environment. What has changed is when we were going against and cycling through so many points of physical distribution we’ve definitely said we’re cycling through that right now. So that’s one thing from a competitive intensity that probably is a little bit different for us right now than it was before. I’m really pleased that we’re leading into our own marketplace right now. And I’m excited about sharing more as we get a little bit closer to launch. But online has been challenging. Brick-and-mortar has been challenging. But again, beauty and wellness is what we do. This is our expertise. I feel like we set ourselves apart when we are able to have exclusivities in our stores when we’re investing in all of these, what I highlight beautytainment type experiences around these events that we’re doing. These are highly thought through a lot of our brand partnered events that are happening in our stores that there’s this activation and I think that sets us apart at was a little bit different. But I would say that the competitive intensity has always been there. I think the big thing that’s maybe changed is we’ve been cycling through the brick-and-mortar expansion, specifically in Prestige, and we’re kind of on the other end of that right now.

And Michael, I would just add that our ability to compete is better this year because of the progress that we’re seeing and we’re making with our Ulta Beauty Unleash Plan. 27

I think Leila will take one more question, please.

Your last question will come from Ashley Helgans with Jefferies.

This is Sydney on for Ashley. It looks like Prestige actually kind of outperformed mass and skin and makeup. Can you just share how you understand that trend? Do you think about it as trade up? Is it more brand or innovation driven? Any color there would be helpful.

Yes. I’ll just talk a little bit about category performance. So our category performance and our trend is improving. We had the strongest performance of makeup since Q3 of 2023. And mass makeup was negative in the low single digits and prestige makeup was flat. We’re working in partnership with our brands to help build the brand pipeline to continue to support our growth. But the category trends are – the trends are still out there. And this no makeup, makeup look is still a trend out there, which actually does take quite a few products to get the look believe it or not. I feel like makeup itself, we’re leaning in, we’ve got some good newness that’s coming in the category in the future, some exclusivity. So I feel like we’re sitting in the best position for makeup specifically, as we’ve had in quite some time. I also would say that we haven’t really seen anything that would suggest that consumers are trading down. I’ve also heard that there’s like this concern of the stockpiling out there. We’re not seeing anything that’s differing in that behavior. And the other key indicator that I think is a positive that would be interesting for you guys to understand is better spend per member is fairly consistent across all income cohorts. 28 So we’re not even seeing great disparity between higher-income consumers and lowerincome consumers. So while consumer confidence and sentiment has maybe been a little bit weaker, we continue to see strong beauty engagement overall. All right. And thank you for the last question, Sydney. Thank you all for joining us today. I’m going to close by saying fiscal 2025 is off to a solid start. We’re encouraged by the positive indicators in our business. The environment is dynamic and it will take time to fully realize the benefits of the Ulta Beauty Unleash Plans, but I am confident that we are on the right path to drive sustainable long-term growth and value creation. I want to close by thanking our dedicated associates for embracing our plans and delivering for our guests each and every day. And I also want to thank our brand partners for their continued support. We look forward to speaking to you all again when we report results for the second quarter at the end of August. Have a good evening, everyone.

Thank you for joining. This concludes today’s call. You may now disconnect. Copyright © 2025, S&P Global Market Intelligence. All rights reserved 29