Ulta Beauty warned investors Thursday that sales growth will decelerate this fiscal year, projecting 6% to 7% growth compared to 9.7% in the prior year. The cosmetics and fragrances retailer posted lower profit despite higher revenue in its latest quarter, citing increased average ticket prices and transaction volumes as key drivers.

Shares fell 4.28% following the announcement, reflecting investor concerns about the slowdown. The company's guidance comes amid broader retail sector challenges, with consumers showing signs of pulling back on discretionary spending. Ulta's performance in the current quarter will be closely watched as a barometer for the beauty industry's health.

Despite the tempered outlook, Ulta's same-store sales growth and digital channel performance remain areas of focus for analysts. The company's ability to maintain customer loyalty through its Ultamate Rewards program and exclusive brand partnerships could help offset broader economic headwinds.