In 1990, a former drugstore executive named Richard E. George had a question that sounds obvious now and sounded almost heretical then: why did a shopper have to choose between the cheap makeup at the pharmacy and the expensive serums behind a department-store counter? George, who had run Osco Drug, teamed up with Terry Hanson, raised $11.5 million, and opened five stores in the suburbs of Chicago. He called the company Ulta3. The pitch was simple - put mass and prestige beauty under one roof, let people try things freely, and keep the prices out in the open.
Thirty-five years later, that suburban experiment is Ulta Beauty, the largest specialty beauty retailer in the United States. It runs roughly 1,450 stores, stocks more than 25,000 products from about 600 brands, and reported around $11.3 billion in revenue in its 2024 fiscal year. It trades on the Nasdaq under the ticker ULTA. And it sits on something most retailers would trade a quarter's earnings for: a loyalty program with nearly 47 million active members who account for about 95% of everything the company sells.
01 / The IdeaPrestige and drugstore, same floor
The core of Ulta is a merchandising decision, not a marketing slogan. Walk in and you will find a $9 mascara a few steps from a $90 face cream, a wall of fragrance, a full hair-care aisle, and an open-sell floor where nearly everything can be swatched, sniffed, or tested. That mix is deliberate. Department stores guarded prestige beauty behind glass and commissioned staff. Drugstores stacked mass brands in blister packs and left you alone. Ulta collapsed the two models and put a knowledgeable associate on the floor to help.
The name lost its numeral at the end of the 1990s, and in October 2007 the company went public. What did not change was the format: convenient, off-mall locations built for discovery rather than status.
Ulta refused to make customers pick a side - and that refusal is the whole business model.The YesPress read on Ulta's floor plan
02 / The MachineThe loyalty program is the product
Ask most people what Ulta is and they will describe the stores. Ask the finance team and they will point at the rewards program. Ulta Beauty Rewards has nearly 47 million active members, and those members drive roughly 95% of the company's sales. Inside that base the concentration is even sharper: the top 20% of members generate about 80% of the revenue. The program runs on three tiers - Member, Platinum, and Diamond - and was refreshed in early 2024 with new birthday perks and a cleaner identity.
Where the revenue comes from
Roughly 95 cents of every dollar Ulta rings up comes from a rewards member, not a walk-in stranger. That is why the loyalty card is less a discount and more a data pipeline - it tells Ulta what to stock, whom to email, and which brands to bet on next.
Figure: Share of Ulta sales attributed to loyalty members. Approximate, per company disclosures.
That data is now feeding the next chapter. Ulta has said it is using first-party purchase history from its members to build custom AI agents meant to act as digital beauty consultants - the kind of personalization a commissioned counter clerk used to provide, at the scale of tens of millions of people.
03 / The CustomerWho actually shops at Ulta
Ulta's shopper is deliberately broad. The store was designed to serve someone buying a $6 drugstore concealer on the same visit they splurge on a prestige fragrance, which means it captures a wide swath of income levels rather than a single demographic. The base skews toward women but has grown more inclusive across age, budget, and skin tone, helped by product-diversity commitments and shade-range expansions. With roughly 65,000 employees and about 1,450 stores, Ulta reaches most U.S. metro and suburban markets - and increasingly reaches shoppers where they already are, through its app, curbside pickup, and the shop-in-shops inside Target. The common thread among its best customers is frequency: the loyalty program rewards people who return often, and the salon gives them a standing reason to.
04 / The Traffic EngineWhy there's a salon in the back
Every Ulta keeps a working salon behind the retail floor, offering hair, skin, brow, and makeup services. It looks like a side business. It functions as a flywheel. A haircut or a brow wax is an appointment, and an appointment is a reason to come back on a schedule - during which you tend to restock the shampoo, grab a new lipstick, and browse the fragrance wall. Services keep the foot traffic warm and the cross-sell easy. Product still makes up the majority of revenue, but the salon is a reason the customer keeps returning.
05 / The CompetitionStanding between Sephora and the drugstore
Ulta's main rival is Sephora, the LVMH-owned chain that leans prestige and now sits inside Kohl's stores. On the other flank are the drugstores - CVS, Walgreens - and Amazon's sprawling beauty aisle, plus the direct-to-consumer brands selling straight to shoppers. Ulta's position is the middle that isn't middling: broader than a prestige boutique, more curated and service-rich than a pharmacy, and physical in a way Amazon can't easily copy. The salon, the open-sell testing, and the loyalty depth are the moat.
How the shelf splits (illustrative)
Figure: Relative emphasis across Ulta's assortment. Directional, not to scale.
06 / The ValuesConscious Beauty and the MUSE bet
Ulta has tried to use its size to move the industry, not just sell to it. Its Conscious Beauty program tags brands that meet at least one of five criteria - clean ingredients, cruelty-free, vegan, sustainable packaging, or positive social impact - and about half of Ulta's brands participate. The idea is to turn a vague question ("is this good for me and the planet?") into a filter you can actually shop.
On diversity, Ulta launched MUSE 100, honoring 100 Black changemakers in beauty with $10,000 grants each - more than $1 million in total - and built the MUSE Accelerator to give emerging BIPOC-founded brands funding and shelf space across its 1,400-plus stores. It is one of the rare corporate diversity efforts that shows up as inventory rather than a press release.
We really have aspirations of influencing the beauty industry.Ulta Beauty, on its clean-beauty and diversity work
07 / The Next ActA new CEO says the quiet part out loud
In January 2025, Ulta named Kecia Steelman - a company veteran and former chief operating officer - as chief executive, succeeding the retiring Dave Kimbell. Her opening message was blunt: Ulta must change. The plan she unveiled, "Ulta Beauty Unleashed," pushes on several fronts at once: exclusive brand building (the launch of Beyonce's Cecred hair-care line became Ulta's largest prestige haircare debut), deeper personalization, a bigger wellness assortment, an expanded retail media network, and international growth into markets including the UK, Mexico, and the Middle East. Ulta also plans an invitation-only e-commerce marketplace to widen its assortment without the risk of owning all that inventory.
08 / The TimelineFrom five stores to a beauty giant
George and Hanson launch five stores mixing mass and prestige beauty.
The company drops the numeral and becomes Ulta.
Ulta goes public under the ticker ULTA in October.
A framework to flag clean, vegan, cruelty-free, and sustainably packaged brands.
Shop-in-shops open inside more than 100 Target stores and online.
Kecia Steelman becomes CEO and launches "Ulta Beauty Unleashed."
09 / The PartnershipsRenting an aisle inside Target
One of Ulta's shrewdest moves was to stop fighting for the beauty shopper and instead move in next door. Ulta Beauty at Target placed curated Ulta shop-in-shops inside Target stores and on Target.com starting in 2021 - distribution to millions of Target guests without building a single new standalone location. Add the exclusive brand launches, from Cecred to a steady stream of new labels, and the pattern is clear: Ulta prefers partnerships that widen reach at lower risk.
The through-line across 35 years is consistency of one idea. Ulta never tried to be the fanciest store or the cheapest. It bet that most people want both ends of the shelf, a place to test before they buy, and a reason to come back - and it turned that bet into one of the most durable loyalty engines in American retail.