In Q3, Ulta Beauty’s skincare segment posted high single-digit comparable sales growth, outpacing the company’s overall mid-single-digit comp increase. This performance was driven by an expanding assortment of prestige and mass brands, with skincare now accounting for approximately 25% of total comparable sales. Management noted that the category’s growth rate has accelerated sequentially for three quarters, underlining its rising importance to the Ulta Beauty portfolio.

Within the skincare category, prestige labels grew at a double-digit rate, led by new launches from Clinique and Drunk Elephant. Mass skincare brands, including Neutrogena and CeraVe, contributed high single-digit growth, supported by expanded shelf space. Wellness brands such as Tata Harper and brands specializing in clean formulations saw mid-teens increases. Meanwhile, K-Beauty continued its momentum with low-double-digit growth, driven by growing consumer awareness and exclusive Ulta partnerships.

Skincare’s higher average selling prices and favorable product mix lifted Ulta Beauty’s overall gross profit rate by approximately 30 basis points in the quarter. The company highlighted that private label skincare products also posted double-digit comp gains, further enhancing gross margin. At the operating level, the company’s segment operating margin expanded by nearly 100 basis points compared to the year-ago period, reflecting strong leverage from the skincare division.

To capitalize on skincare momentum, Ulta Beauty plans to invest $50 million in marketing and digital capabilities next fiscal year, targeting personalized shopping experiences and virtual consultations. The retailer is also accelerating its store remodel program, with 150 locations slated for enhanced skincare destination layouts. Analysts view these initiatives as key demand anchors that could support mid-single-digit EPS growth over the next two years, positioning Ulta Beauty as a leader in the fast-growing retail beauty market.