ULTA's Fragrance Category Grows Double Digits in Q2: Trend to Watch?

Ulta Beauty, Inc.’s ULTA fragrance category delivered robust double-digit growth in the second quarter of fiscal 2025, emerging as the strongest-performing category for the period. Per the fiscal second-quarter earnings release, fragrance accounted for 12% of net sales in the 13-week quarter, up from 11% in the year-ago period.The strong performance was driven by seasonal gifting, elevated newness and a growing slate of exclusive launches. Management pointed specifically to Mother's Day and Father's Day activations, strength in gift sets, expanded men’s fragrance assortments and the debut of Ulta Beauty’s first men's exclusive fragrance, Drake's Summer Mink, alongside freshness from brands such as YSL, Gucci and Chanel and exclusives like Snif and Noise.  Management also emphasized improved in-store conversion and heightened brand engagement during the quarter, which provided a boost to sell-through for premium and gift assortments. Events, well-timed promotions, and exclusive launches have been attracting more shoppers and encouraging them to try new products, while gift sets and men’s fragrances boosted spending during busy shopping periods.Looking ahead, the key question is whether Ulta Beauty can keep fragrance growth steady beyond gift seasons. The answer, however, depends on how often the company can bring in exclusive launches, how repeat buying holds up, and whether strong in-store conversion continues. For now, fragrance stands out as a bright spot worth watching.Ulta Beauty’s Zacks Rank & Share Price PerformanceShares of this Zacks Rank #3 (Hold) company have rallied 20.8% in the year-to-date period, cruising ahead of the industry’s 9.7% increase. The renowned beauty retailer has also outpaced the broader Retail – Wholesale sector and the S&P 500’s respective gains of 10.3% and 13.5% during the same time frame.ULTA Price Performance vs. Industry, S&P 500 & SectorImage Source: Zacks Investment ResearchULTA’s Valuation Under the SpotlightUlta Beauty currently trades at a forward 12-month P/E ratio of 20.42, which is higher than the industry average of 18.77, reflecting investor confidence in its growth drivers and brand strength. However, the multiple remains below the sector average of 25.55, indicating the shares are not as highly priced as some peers in the same space.ULTA P/E Ratio (Forward 12 Months)Image Source: Zacks Investment ResearchImage Source: Zacks Investment ResearchRetail Stocks to ConsiderSally Beauty Holdings, Inc. SBH operates as a specialty retailer and distributor of professional beauty supplies. It currently sports a Zacks Rank of 1 (Strong Buy). SBH delivered a trailing four-quarter average earnings surprise of 8.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Sally Beauty’s current fiscal-year earnings indicates growth of 8.9%, from the year-ago actuals.Build-A-Bear Workshop, Inc. BBW operates as a multi-channel retailer of plush animals and related products. It has a Zacks Rank #1 at present. BBW delivered a trailing four-quarter earnings surprise of 21.3%, on average. The Zacks Consensus Estimate for Build-A-Bear Workshop’s current fiscal-year sales and earnings indicates growth of 7.4% and 6.9%, respectively, from the prior-year levels.The TJX Companies, Inc. TJX, an off-price retailer, currently carries a Zacks Rank #2 (Buy). TJX delivered a trailing four-quarter earnings surprise of 5.4%, on average.The Zacks Consensus Estimate for The TJX Companies’ current financial-year sales and earnings indicates growth of 5.4% and 7.5%, respectively, from the year-ago reported numbers.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The TJX Companies, Inc. (TJX): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report Sally Beauty Holdings, Inc. (SBH): Free Stock Analysis Report Build-A-Bear Workshop, Inc. (BBW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks