Ulta Beauty customers will encounter a harsh change in stores | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Ulta Beauty, one of the top beauty retailers in the U.S., continues to see increased consumer demand despite recent economic pressures that have threatened the sales of retailers nationwide.

During the third quarter of this year, Ulta Beauty’s comparable sales increased by 6.3% year over year, according to its latest earnings report. The average amount of money customers spent per purchase spiked by almost 4%, while the number of transactions in stores rose by 2.4%.

The spike in sales comes after Ulta Beauty launched its online third-party marketplace, UB Marketplace, in October, further expanding its beauty, wellness, haircare, skincare and fragrance products for customers.

The marketplace introduced over 120 new brands to customers, and Ulta Beauty plans to quickly expand its assortment over the next 12 to 18 months.

Ulta Beauty also saw foot traffic in its stores increase by 3.3% year over year during the quarter, according to recent data from Placer.ai, which was shared with TheStreet.

Ulta Beauty is benefiting from increased consumer demand for beauty products.

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Ulta Beauty customers will soon have to cough up more cash

“Despite a softening in overall consumer confidence in Q3 (the third quarter), beauty engagement remained healthy,” said Ulta Beauty CEO Kecia Steelman during an earnings call on Dec. 4.

Steelman said that fragrance was the “strongest growing category” in stores during the quarter, followed by skincare and makeup. Additionally, while hair care sales grew by mid-single digits, the growth was partially offset by declines in sales of personal styling tools, which had recently undergone price increases.

Over the past few months, prices in Ulta Beauty stores have been rising due to President Donald Trump’s tariffs.

“While many of our brand partners continued to be cautious about passing through tariff-related price changes, we saw more brand-driven price increases in Q3 as compared to Q2,” said Ulta Beauty Interim Chief Financial Officer Chris Lialios during the earnings call.

Earlier this year, beauty companies such as E.l.f. Beauty, Cody and Helen of Troy, announced tariff-related price increases. Lialios said that Ulta Beauty is working with brand partners to help manage these pricing changes.

“We continue to work with our brand partners to understand how they’re thinking about tariff mitigation going forward and price increases,” said Lialios. “And they are being very thoughtful, considering the consumer wallet pressures and making sure that we continue to provide value to our guests.”

He did, however, warn that there will be “modest price increases” in stores during the fourth quarter of this year, which encompasses the holiday season.

The higher prices in Ulta Beauty’s stores coincide come during a time when Americans are reducing their spending due to increased costs for goods resulting from tariffs, according to a recent survey by Wunderkind.

How U.S. consumers are battling tariffs in 2025:

Amid tariffs and inflation, 59% of consumers feel cautious, pessimistic or panicked about the economy.
Approximately 71% cited higher prices as their top concern, while 47% cited unpredictable price increases.
Also, 38% are seeking deals more often, while 34% are spending less overall.
During the holiday season, 26% of consumers are prioritizing essential goods over gifts. Source: Wunderkind

“U.S. shoppers are proving more strategic than ever,” Danny O’Reilly, senior content architect at Wunderkind, wrote in a blog post. “What began as short-term caution has now crystallized into a new retail reality: value is the priority, trust is the differentiator, and digital fluency defines how, and where consumers spend.”

Ulta Beauty bets big on holiday shoppers, but remains cautious

Despite waning consumer sentiment, Ulta Beauty has raised its sales expectations for fiscal year 2025, as it is satisfied with its performance during Black Friday and Cyber Monday.

Previously, it expected its comparable sales to increase by only 2.5% to 3.5% for the fiscal year; now it predicts sales growth of 4.4% to 4.7%.

While Ulta Beauty is confident that it can generate higher sales, the company remains cautious about changing consumer behavior.

More Retail:

“We’re pleased with our Black Friday and Cyber Monday performance,” said Steelman. “At the same time, we know the biggest selling weeks are still ahead of us, and we are mindful of the challenging macro backdrop.”

She said that Ulta Beauty has launched “holiday exclusives and newness that’s driving the business” as more consumers prioritize value amid economic pressures.

“Our insights suggest beauty consumers’ budgets are tight, and they are focused on value,” she said. “Despite this, beauty enthusiasts tell us that they intend to spend on beauty for seasonal needs, affordable splurges, and gifts for loved ones. They are focused on replenishing their essentials and strategically making smart purchases around strong value, holiday limited editions and deals, and early gift set drops.”

The beauty industry in the U.S. is facing a surge in consumer demand as more Americans nationwide prioritize self-care and wellness.

Recent data from market research company Circana found that prestige beauty, which is essentially high-end makeup, skincare and fragrance products, reached $24.1 billion in sales in the U.S. between January and September this year, a 4% increase compared to the same time period last year.

Also, U.S. beauty sales in the mass market, which focus on more affordable and accessible products, increased by 5%, generating $54.5 billion.

U.S. beauty sales between January and September 2025:

Fragrance: prestige sales increased 6% year-over-year; mass sales rose by 17%.
Makeup: prestige sales climbed 3%; mass sales spiked by 1%.
Skincare: prestige sales rose by 1%; mass sales increased by 5%.
Hair: prestige sales jumped by 8%; mass sales spiked by 4%. Source: Circana

“The beauty industry had a really stellar third quarter and, in fact, the growth rate has ramped up when we compare the past three quarters of 2025, which bodes well stepping into the holiday season,” said Larissa Jensen, global beauty industry advisor at Circana, in a press release. “Beauty is in a position to shine this holiday, with one-third of consumers planning to gift beauty products — a meaningful increase from last year.”