Investment Thesis
Ulta Beauty demonstrates solid profitability with strong margins (39.6% gross, 12.4% operating) and excellent returns on equity (30.3%), indicating efficient capital deployment. However, revenue growth has stalled at 0.8% YoY while net income remains flat, coupled with concerning cash flow generation (78.9M FCF on 8.5B revenue = 0.9% FCF margin), suggesting operational challenges that warrant caution despite fundamental strength.
ULTA Strengths
- Exceptional profitability metrics with 39.6% gross margin and 12.4% operating margin indicating pricing power and operational efficiency
- Outstanding returns on equity (30.3%) and ROA (11.4%) demonstrate superior capital allocation and asset utilization
- Strong interest coverage ratio (5708.4x) with conservative leverage (0.30x debt-to-equity) indicates financial stability
ULTA Risks
- Revenue growth has essentially stalled at 0.8% YoY in mature market, suggesting limited organic growth prospects and potential market saturation
- Severely weak free cash flow conversion (0.9% FCF margin) relative to net income indicates cash generation issues despite accounting profitability
- Quick ratio of 0.25x signals potential liquidity constraints with limited ability to meet short-term obligations without inventory conversion
- Diluted EPS declined 2.7% YoY despite flat net income, suggesting shareholder dilution from equity issuance
Key Metrics to Watch
- Organic revenue growth trajectory and comparable store sales trends
- Free cash flow margin expansion and operating cash flow sustainability
- Quick ratio and working capital management efficiency
ULTA Financial Metrics
ULTA Profitability Ratios
ULTA Balance Sheet & Liquidity
ULTA 5-Year Financial Trend
5-Year Trend Summary: Ulta Beauty, Inc.'s revenue has grown significantly by 53% over the 5-year period, indicating strong business expansion. The most recent EPS of $24.01 reflects profitable operations.
ULTA Growth Metrics (YoY)
ULTA Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $2.5B | $230.9M | $5.14 |
| Q2 2025 | $2.6B | $252.6M | $5.30 |
| Q1 2025 | $2.7B | $305.1M | $6.47 |
| Q3 2024 | $2.5B | $242.2M | $5.07 |
| Q2 2024 | $2.5B | $252.6M | $5.30 |
| Q1 2024 | $2.6B | $313.1M | $6.47 |
| Q3 2023 | $2.3B | $249.5M | $5.07 |
| Q2 2023 | $2.3B | $295.7M | $5.70 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ULTA Capital Allocation
ULTA SEC Filings
Access official SEC EDGAR filings for Ulta Beauty, Inc. (CIK: 0001403568)