Core Viewpoint - Ulta Beauty's shares fell approximately 8% in premarket trading due to rising costs impacting margins, despite strong demand and positive sales forecasts driven by celebrity brands and a new digital strategy targeting younger consumers [1] Financial Performance - Ulta reported strong sales for the holiday quarter and forecasted upbeat annual sales, benefiting from robust demand for trendy products, including celebrity labels like Rihanna's Fenty Beauty [1] - Selling, general, and administrative (SG&A) costs increased by 23% to $1 billion in the December quarter, primarily due to higher incentive compensation and marketing investments [1] Strategic Initiatives - The new CEO, Kecia Steelman, emphasized a focus on attracting younger and affluent shoppers through celebrity-owned brands and exclusive campaigns featuring figures like Khloe Kardashian and Paris Hilton [1] - Ulta plans to launch an exclusive-brand assortment on TikTok Shop to engage Gen Z and Gen Alpha shoppers, aiming to capitalize on the growing online beauty sales market [1] Market Position and Outlook - Analysts noted that Ulta is capturing market share in the online beauty category, with confidence in an upside to the annual sales forecast [1] - The company anticipates double-digit SG&A growth in the first half of fiscal 2026 due to ongoing costs related to the acquisition of Space NK, with expectations of easing in the latter half as integration expenses stabilize [1] Valuation Metrics - Following the results, at least seven brokerages reduced their price targets for Ulta's stock, which has a forward price-to-earnings multiple of 21.62, compared to 29.53 for Estee Lauder and 19.84 for Elf Beauty [1]