March 12 (Reuters) - Ulta Beauty ( ULTA ) forecast annual profit largely below Wall Street estimates on Thursday, as the cosmetics retailer ramps up marketing efforts to boost demand amid choppy consumer spending, sending its shares down 8% in extended trading.

To draw younger and more affluent shoppers, Ulta has leaned on celebrity-owned and premium labels such as Beyonce's Cecred haircare line, Rihanna's Fenty Skin Body, and ran holiday campaigns featuring Khloe Kardashian and Paris Hilton.

While the company topped holiday-quarter sales expectations, its selling, general and administrative expenses increased 17.4% to $3.30 billion for fiscal year 2025, partly due to higher advertising costs.

Consumers, particularly in the lower- and middle-income categories, have been paring back spending on non-essential purchases as they funnel more of their crimped budgets into everyday essentials such as groceries and pantry staples.

Ulta Beauty ( ULTA ) was increasingly mindful of rising global conflicts that could impact economic conditions, executives said on a post-earnings call, as sticky inflation and rising geopolitical unrest weigh on consumer sentiment.

It expects comparable sales growth of 2.5% to 3.5% in fiscal 2026, compared with the 5.4% growth it posted in 2025.

Ulta Beauty ( ULTA ) also faces intense competition from Target and Walmart as they broaden their beauty offerings and ride the surge in demand for K-beauty products.

Last year, the company acquired British high-street chain Space NK to enter the growing UK market and step up its international expansion under its turnaround plan.

Ulta Beauty ( ULTA ) expects full-year earnings per share to be between $28.05 and $28.55, with the mid-point below analysts' expectations of $28.40, according to data compiled by LSEG.

The company posted fourth-quarter earnings per share of $8.01, compared with the estimate of $8.03.

It expects annual net sales to grow 6% to 7%, while analysts estimate a 5.94% rise.