Ulta Beauty Inc. (ULTA) Takeaways from our meeting with management and store tour

Equity Research 14 October 2026 | 4:25PM EDT

Ulta Beauty Inc. (ULTA): Takeaways from our meeting with management and store tour

We hosted a meeting and store tour in Chelsea, New York with Ulta Beauty on Kate McShane, CFA | 10/14/26 and highlight our key takeaways below. Management attendees included Goldman Sachs & Co. LLC Chris DelOrefice (Chief Financial Officer), Kelly Mahoney (Chief Marketing Officer), Emily Ghosh Keri Thomson-Yhlen (SVP of Stores), Amy Dichard (RVP of the Northeast), Kiley | Rawlins (SVP of Investor Relations), and Mary Kate Boyce (Director of Investor Goldman Sachs & Co. LLC

Relations). Grace Chee | Goldman Sachs & Co. LLC We continue to believe Ulta’s comp growth is being fueled by a healthy cosmetics category and strong company execution, with the company’s investment in Mark Jordan, CFA | marketing, labor, and service, resulting in market share gains. We reiterate our Buy Goldman Sachs & Co. LLC rating with a 12-month price target of $673. Nishi Agarwal | Goldman Sachs India SPL Key takeaways Samantha Chiang n Beauty demand remains healthy across categories and consumers: | Management continues to see healthy demand across beauty, supported by Goldman Sachs & Co. LLC

newness and innovation, with ~80-85% of baskets including a new item. K-beauty remains a standout, with 52% of sales coming from exclusive brands, while management also highlighted continued strength in fragrance and meaningful opportunity with the male consumer. Management also pointed to early green shoots in makeup, including increased interest in bolder looks and glitter. Importantly, beauty remains highly experiential, with ~80% of sales occurring in stores and less than 10% online-only. The company also sees an opportunity to deepen loyalty and replenishment, with its replenishment offering still relatively new and a broader focus on increasing spend per loyalty member through exclusive events. Ulta’s loyalty program currently encompasses 47mn active members, driving 95% of the company’s sales, with higher customer tiers (Diamond) having a five-year tenure. Across demographics, management highlighted opportunities to capture younger consumers earlier in their beauty journey, while continuing to grow with Millennials and Gen X across areas such as wellness and longevity. n Competition: Management acknowledged the competitive environment, but emphasized that Ulta remains focused on its own strengths rather than reacting to competitors. As the Target partnership winds down, management sees upside from bringing back customers to Ulta, with the lost royalty representing less than 1% of sales. The company believes its differentiated assortment, understanding

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Goldman Sachs Ulta Beauty Inc. (ULTA)

of the guest, and ability to localize marketing, position it well to recapture its fair share of these customers. More broadly, management highlighted Ulta’s integrated store and digital experience as difficult for mass retailers to replicate, particularly around beauty discovery and brand launches. Ulta is also becoming more deliberate in how it curates stores and works with brands, with a greater focus on positioning itself as not only a place to scale products, but also a destination to launch them. n Margins: Management emphasized that its primary margin objective is to drive operating profit growth rather than manage to a specific gross margin or SG&A target. The company continues to see supply chain productivity, including leverage from its distribution center footprint, which can help offset pressures such as freight and other input costs. There is also further opportunity within merchandise margin, though the company…