Ulta Beauty Seeks Single-Digit SG&A Growth After 17.4% Expense Surge
Ulta Beauty’s SG&A expenses jumped 17.4% in fiscal 2025 compared with 5.4% same-store sales growth, driven by long-term store expansion and a $100 million Space NK acquisition lift. UBS expects digital infrastructure spending of $25 million–$55 million to ease and SG&A increases to slow to single digits in late 2026.
1. Growth Outlook and Momentum
Ulta Beauty is positioned to sustain recent business momentum while bringing operating cost growth under tighter control. Analysts highlight that as cost moderation becomes clearer in upcoming quarters, Ulta’s shares could see upward movement driven by improved margin prospects.
2. SG&A vs. Sales Performance
In fiscal 2025, SG&A expenses rose 17.4%, significantly outpacing 5.4% same-store sales growth. This gap widened from fiscal 2024, when expenses grew 4.2% against 0.7% comparable sales gains, raising questions about expense discipline.
3. Primary Cost Drivers
Long-term store footprint expansion contributed roughly $1.1 billion to SG&A growth over the past decade. The mid-2025 acquisition of Space NK added over $100 million to expenses, while a late-2024 enterprise resource planning transition and digital upgrades drove $25 million–$55 million in strategic investments.
4. Outlook for Cost Control
Analysts forecast mid- to high-teens SG&A growth in the first quarter, but expect a sharper slowdown to low single-digit increases in the second half of fiscal 2026. Tighter marketing management and moderated infrastructure spending are seen as key drivers of future margin expansion.