How Does Ulta Beauty's Loyalty Program Drive Personalized Shopping?

Ulta Beauty, Inc. ULTA continued to strengthen its personalization strategy through its Ulta Beauty Rewards loyalty program, which expanded to nearly 47 million members, representing 4% year-over-year growth in the first quarter of fiscal 2026. By leveraging customer data and insights, the company aims to deliver a more personalized shopping experience, improve customer engagement and strengthen loyalty through more relevant interactions across its retail and digital channels.

To further deepen customer engagement, the company continues to expand the use of artificial intelligence across its customer experience initiatives. During the quarter, it introduced Ulta AI, an online shopping agent designed to enhance product discovery, personalization and the overall shopping journey. Management indicated that initial customer response has been encouraging, reflecting the potential of the new feature to improve engagement. By integrating AI into the shopping experience, the company aims to deliver more personalized interactions while strengthening its digital capabilities and enhancing the overall customer experience.

The company is using loyalty data to better understand customer behavior, anticipate replenishment purchases and improve cart conversion, further enhancing the effectiveness of its personalized customer engagement strategy. By combining artificial intelligence with its rich first-party data from loyalty members, the company aims to tailor communications and promotional offers based on individual customer preferences.

This personalized approach enables the company to deliver different types of incentives, such as gifts with purchase, value-focused offers, percentage discounts or price-point promotions, to better match each customer's needs and shopping behavior.
Ulta Beauty is evolving its customer relationships from transactional interactions to individualized experiences. As these capabilities improve, Ulta Beauty aims to make shopping more personalized and strengthen customer engagement.

The Zacks Rundown for ULTA

The company's shares have lost 3% in the past year compared with the industry's 7.2% decline.Zacks Investment Research

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From a valuation standpoint, ULTA trades at a forward price-to-earnings ratio of 10.43, lower than the industry's average of 14.74. ULTA currently carries a Zacks Rank #3 (Hold).Zacks Investment Research

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The Zacks Consensus Estimate for ULTA's current and next fiscal year earnings implies a year-over-year rise of 11.8% and 11.3%, respectively.

Story Continues

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Stocks to Consider

Some better-ranked stocks have been discussed below:

Five Below, Inc. FIVE operates as a specialty value retailer in the United States. At present, Five Below sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIVE's current fiscal-year sales and earnings implies growth of 14.7% and 34.3%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 70.1%, on average.

The Estée Lauder Companies Inc. EL manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide.  At present, EL flaunts a Zacks Rank of 1.

The Zacks Consensus Estimate for EL's current fiscal-year sales and earnings indicates growth of 4.5% and 59.6%, respectively, from the year-ago figures. EL delivered a trailing four-quarter earnings surprise of 39.1%, on average.

Interparfums, Inc. IPAR manufactures, markets, and distributes a range of fragrances and fragrance-related products in the United States and internationally. At present, the company carries a Zacks Rank of 2 (Buy).

The consensus estimate for Interparfums' current fiscal-year sales and earnings implies a decline of 0.1% and 8%, respectively, from the year-ago figures. IPAR delivered a trailing four-quarter earnings surprise of 8%, on average.

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Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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