Ulta Beauty beat Wall Street’s top-line forecasts — though shoppers shied away from prestige in the corporate’s stores as competition heats up the category.

Net sales increased 6.4 percent to $2.5 billion within the three months ended Oct. 28, in comparison with $2.3 billion a 12 months earlier, above analysts’ expectations for $2.47 billion.

Skincare was once more its fastest-growing category, driven by double-digit growth within the mass and prestige segments. Among the many brands highlighted as growth drivers were Drunk Elephant, Good Molecules, La Roche Posey and Dermalogica.

The fragrance and bath category delivered low-double-digit growth, while sales within the makeup category were flat, with midsingle-digit growth in mass makeup offsetting a modest decline in prestige makeup. 

“While many mass brands proceed to learn from engaging newness and social engagement, our prestige makeup business was more challenged as we proceed to lap the strong impact of last 12 months’s Fenty launch,” said chief executive officer Dave Kimbell during a call with analysts.

This contrasted with Circana’s third-quarter beauty report, which found that makeup maintained its position because the fastest-growing category inside prestige by revenue growth, posting $7.1 billion in sales year-to-date, up 16 percent versus last 12 months.

Kimbell noted that at Ulta, the general prestige category was pressured at its stores resulting from expanded points of distribution. “There are tons of more brick-and-mortar locations out there now than there have been even just a few years ago.”

He didn’t name any competitors, but as Ulta expands its partnership with Goal, Sephora has been multiplying at Kohl’s, which has many doors near Ulta stores in strip malls.

Specifically, Kohl’s has been busy creating scaled-down Sephora shops to suit into 50 of its smaller locations, which average 35,000 square feet.

Among the many brands being merchandised within the smaller formats are Rare Beauty, Fenty Beauty, Nars, Charlotte Tilbury, Sephora Collection, Ilia, Lancôme and Too Faced in makeup. The skincare/body care category offers Dr. Dennis Gross, Sol de Janeiro, Biossance, Dr. Jart and Supergoop.

Ulta’s net income for the quarter dropped to $249.5 million from $274.6 million a 12 months ago. Diluted earnings per share were $5.07, down from $5.34, but above Wall Street forecasts of $4.96.

Ulta raised its full-year fiscal outlook for net sales to a spread of $11.1 billion to $11.15 billion, up from the $11.05 billion to $11.15 billion previously projected. Diluted EPS guidance was also adjusted to a spread of $25.20 to $25.60, from $25.10 to $25.60.

The outcomes got here as the corporate said Scott Settersten has decided to retire as chief financial officer after nearly 20 years, effective April 1. 

Paula Oyibo, senior vp of finance, will succeed Settersten as CFO and can report back to Kimbell.

This comes not long after Kecia L. Steelman, Ulta’s chief operating officer who’s viewed in industry circles as a possible successor to CEO Dave Kimbell, added president to her title. Prior to being appointed CEO, Kimbell also had the title of president.