Is Ulta Beauty's Skincare Business Emerging as a Key Demand Anchor?

Ulta Beauty, Inc.’s ULTA third-quarter fiscal 2025 performance highlighted the continued strength of its skincare business, underscoring the category’s importance within the company’s overall assortment. During the quarter, skincare delivered solid high single-digit comparable sales growth, making it one of Ulta Beauty’s fastest-growing categories and a consistent source of demand in a mixed consumer spending environment.

Prestige, Mass & Wellness Fuel ULTA’s Skincare Momentum

Management attributed skincare’s momentum primarily to sustained strength in prestige offerings. Established brands such as Tatcha and Dermalogica continued to resonate with guests, reflecting ongoing demand for products tied to skin health, treatment and long-term routines. The quarter also benefited from the exclusive launch of Fenty Skin Body, which helped support prestige skincare growth at Ulta Beauty.

Mass skincare also contributed positively during the period. Newness across select brands, combined with strong visibility on social media platforms, supported demand for accessible and routine-driven skincare products. In addition, the company’s expanded wellness assortment provided support to skincare performance during the quarter.

Ulta Beauty’s differentiated K-beauty assortment remained another important driver. The company continued to benefit from its long-standing exclusive relationships in K-beauty skincare, including Peach and Lily, which helped reinforce its position as a destination for emerging and globally influenced skincare trends. Management noted that this curated assortment continues to resonate with guests and drive category engagement.

Overall, skincare’s strong performance in the third quarter supported Ulta Beauty’s comparable sales growth of 6.3%. Steady consumer demand for routine skincare products continues to aid the category, making it a strong force within Ulta Beauty’s broader assortment. 

Ulta Beauty, currently sporting a Zacks Rank #1 (Strong Buy), has rallied 34.4% in the past six months, outpacing the industry’s growth of 7.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Solid Retail Bets

Five Below, Inc. FIVE operates as a specialty value retailer in the United States. At present, Five Below sports a Zacks Rank of 1. 

The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 22.3% and 24.4%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 62.1%, on average. 

Boot Barn Holdings, Inc. BOOT operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently sports a Zacks Rank of 1. 

The Zacks Consensus Estimate for Boot Barn’s current fiscal year sales and earnings implies growth of 16.9% and 25.1%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%. 

Victoria’s Secret & Co. VSCO operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSCO sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Victoria's Secret’s current fiscal-year sales indicates growth of 4.7%, and estimates for earnings imply a decline of 1.5% from the year-ago figures. VSCO delivered a trailing four-quarter earnings surprise of 55.5%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research