Ulta Beauty (ULTA) Q3: 6.3% Comps Rebound Tests Margin-Squeeze Bear Narrative

Ulta Beauty (ULTA) just turned in another busy quarter, with Q3 2026 revenue of about $2.9 billion, basic EPS of $5.16, and net income of $230.9 million. This sets the stage for investors to recheck the trajectory of its beauty retail engine. The company has seen quarterly revenue move from $2.53 billion in Q3 2025 to $2.86 billion in Q3 2026 alongside EPS holding in the mid single digits. Trailing 12 month revenue has climbed to roughly $12.0 billion and EPS to $26.25, giving investors a fuller picture of how sales growth and earnings power are translating into slightly softer but still resilient margins.

See our full analysis for Ulta Beauty.

With the headline numbers on the table, the next step is to see how this earnings print lines up with the most popular narratives around Ulta. This highlights where the story holds up and where the latest margin trends might challenge expectations.

See what the community is saying about Ulta Beauty

6.3 percent comps show demand is back

• Comparable sales grew 6.3 percent in Q3 2026 versus just 0.6 percent in Q3 2025, while quarterly revenue increased from about $2.53 billion to $2.86 billion over the same period.
• Analysts' consensus view that wellness expansion and exclusive partnerships can lift growth and margins is partly supported here, but not without trade offs:
  • The jump in same store sales alongside trailing 12 month revenue moving to roughly $12.0 billion aligns with the idea that a broader assortment is pulling in more spending.
  • At the same time, trailing net margin slipping from 10.6 percent to 9.9 percent shows that even with stronger sales, profitability is a bit thinner than the consensus narrative might prefer.

Margins softer as EPS drifts lower

• Net income dipped from $260.9 million in Q2 2026 to $230.9 million in Q3 2026, and trailing 12 month net margin eased from 10.6 percent to 9.9 percent even as EPS over the last year reached $26.25.
• Critics highlight rising costs and competitive pressure as long term threats to margin, and the latest numbers give that cautious view some backing:
  • Sequential EPS slipped from $6.72 in Q1 2026 and $5.80 in Q2 2026 to $5.16 in Q3 2026 while net income over the last year edged down from about $1.21 billion to $1.19 billion, consistent with the concern that expenses are growing faster than profit.
  • The drop in trailing margin despite higher sales fits the bearish worry that investments in international growth, digital, and store experience can weigh on earnings if they do not quickly translate into higher profitability.

Bears watching Ulta’s slipping margin will want to see whether upcoming quarters confirm pressure or a quick rebound in profitability. 🐻 Ulta Beauty Bear Case

Valuation rich versus DCF and industry

• At a share price of $601.50, Ulta trades on about 22.4 times earnings, above the US Specialty Retail industry at 18.4 times and well above the DCF fair value of roughly $385.03, even though it is cheaper than a 41.7 times peer average.
• Consensus narrative that long term growth and high quality earnings justify a premium multiple meets mixed evidence in the current numbers:
  • Five year earnings growth of about 16.2 percent a year and forecast earnings growth around 4.7 percent support paying more than the industry average, especially with trailing 12 month EPS near $26.25.
  • However, negative earnings growth over the last year and a lower 9.9 percent trailing net margin versus 10.6 percent a year earlier make the current price look stretched against both the 18.4 times sector multiple and the DCF fair value marker.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Ulta Beauty on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers in a different light and think the story should read another way? Shape your own view in minutes: Do it your way.

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Ulta Beauty.

Explore Alternatives

Despite resilient sales, Ulta Beauty is seeing softer margins, negative recent earnings growth, and a valuation that looks stretched versus both industry peers and DCF fair value.

If paying a premium for slowing earnings and thinner margins makes you uneasy, use our these 906 undervalued stocks based on cash flows to quickly zero in on stocks where price more clearly matches fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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