Ulta generated $381.6 million in operating cash across the first six months of fiscal 2026. Its cash balance still fell from $242.7 million to $158.5 million.
That is the odd part of an otherwise straightforward filing. Revenue rose 8.9% to $3.0 billion, operating income grew 10.1% to $379.6 million, and diluted earnings per share climbed 13.3% to $6.55. The business made more money and converted more of it into cash. The balance sheet simply did not keep it.
The company points to share repurchases as the main reason financing used more cash. Capital spending also declined 10.5% to $139.5 million, which helped free-cash-flow margin improve by 1.1 percentage points. In other words, Ulta’s operating cash engine strengthened while capital allocation made the ending cash number smaller.
Ulta explains the financing swing this way:
"The increase in net cash used in financing activities in the first 26 weeks of fiscal 2026 compared to the first 26 weeks of fiscal 2025 was primarily due to an increase in share repurchases, partially offset by borrowings from short-term debt."
10-Q 2026-08-27
The filing attributes the financing swing primarily to increased share repurchases, with short-term borrowing offsetting part of the outflow.
The income statement shows a similar, smaller tension. Gross margin was 39.1%, essentially flat with the comparable six-month period, while operating margin edged up to 12.5%. SG&A rose faster than sales as a percentage of revenue, reaching 26.1%, with higher corporate overhead and store expenses partly offset by lower incentive compensation.
Management says merchandise economics helped at the gross-profit line:
"The increase in gross profit margin was primarily due to lower inventory shrink and higher merchandise margin, partially offset by unfavorable channel and business mix."
10-Q 2026-08-27
The full six-month comparison was not quite as clean as that sentence sounds: gross margin slipped by 0.1 percentage points. Still, gross profit grew 8.7%, close to the pace of sales, and operating income grew faster because the company kept a little more of each revenue dollar after operating expenses.
Buybacks did some of the visible lifting for per-share results. Diluted shares fell 4.5%, helping EPS grow faster than net income, which rose 8.1% to $282.0 million. That is a durable feature of Ulta’s annual record too: diluted shares fell 5.1% in fiscal 2026, even as operating margin stood at 12.4%, below the 16.1% recorded in fiscal 2023.
At the latest close, Ulta was up 1.2% at $543.18. The stock trades at 21.2 times earnings, while the six-month filing offers a more operational question than a dramatic one: can sales and cash generation keep expanding while corporate costs, store spending, and repurchases determine where the cash ends up?
Ulta’s next quarterly report can put a fresh number beside the current $158.5 million cash balance, making the flow from operating cash to repurchases and borrowing easier to compare.
Source: Ulta Beauty's 10-Q filed August 27, 2026.