ULTA
Ulta Beauty, Inc.
Consumer Cyclical · Specialty Retail · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Solid profitability metrics — including a 12.4% operating margin and 16.5% return on assets — and meaningful revenue growth anchored the score, while the net income decline and near-flat EPS growth held it back from a higher range.
- Uneven quarterly momentum, with a mid-year earnings trough before a Q4 rebound, produced a near-midpoint momentum score that reflects inconsistency rather than sustained acceleration.
- The absence of a macro theme assignment meant the company received no theme-based score contribution, which weighed on the composite total of 49.2/100.
Why Not Higher
- Net income fell 4.0% and diluted EPS rose only 1.2% in FY2026 despite strong revenue growth, directly penalizing the growth factor score and signaling mixed earnings quality.
- No macro theme assignment was made under the current model methodology, meaning a full scoring dimension contributed nothing to the composite, limiting how high the total score could reach.
Data Confidence
9 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2025 to FY2026 by 9.7%, rising to 12,392,820,000, but net income declined 4.0% over the same period, and diluted EPS increased only 1.2% from FY2025 to FY2026.
The model rewarded meaningful top-line expansion but penalized the contraction in net income and the near-flat EPS growth, resulting in a below-midpoint score that reflects mixed growth quality.
In FY2026, Ulta Beauty posted a net margin of 9.3%, an operating margin of 12.4%, and a return on assets of 16.5%.
The model rewarded the combination of double-digit operating margins and a notably high return on assets, reflecting efficient use of the company's asset base and solid earnings conversion from revenue.
Filing evidence currently available does not support a more specific explanation for this factor.
Over the last four quarters, revenue moved from 2026Q1 at 2,848,367,000 to 2026Q2 at 2,788,469,000, then recovered to 2026Q3 at 2,857,623,000 before surging to 2026Q4 at 3,898,361,000. Net income followed a similar pattern, declining from 2026Q1 at 305,052,000 through 2026Q3 at 230,875,000 before rebounding to 2026Q4 at 356,677,000. Operating income likewise troughed in 2026Q3 at 309,419,000 and peaked in 2026Q4 at 476,942,000.
The model captured a mid-year deceleration in both revenue and earnings followed by a strong fourth-quarter recovery, producing a near-midpoint score that reflects the uneven intra-year trajectory rather than sustained sequential acceleration.
The company has an established history of paying dividends, though a current figure is not available within our filing-freshness window.
The model assigned an above-midpoint score reflecting the existence of a historical dividend program; the absence of a freshly verified current figure prevented a higher or more precisely calibrated result.
Ulta Beauty is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means the security did not receive any theme-based score contribution under the model's current methodology; this reflects the model's classification state and is not an indicator of the company's business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Ulta Beauty posted strong top-line growth of 9.7% in FY2026, reaching $12.39 billion in revenue, but net income declined 4.0% and diluted EPS rose only 1.2%, signaling that cost pressures are eroding the benefit of revenue expansion. Profitability metrics remain solid, with a 12.4% operating margin and a notably high 16.5% return on assets, reflecting efficient use of the company's $7.0 billion asset base. Intra-year momentum was uneven, with revenue and earnings softening through mid-year before a strong fourth-quarter recovery, and the company carries a historical dividend program whose current status could not be freshly verified. The composite score of 49.2/100 and a Medium risk rating reflect a business with genuine strengths but meaningful mixed signals that warrant further research.
Plain English
Ulta Beauty is growing its sales nicely but is making less profit per dollar than before, and its quarterly results were bumpy until a big rebound at year-end — it's a solid company with some question marks that make it worth digging into more before drawing conclusions.
Bull Case vs. Bear Case
Bull Case
- Revenue grew 9.7% year-over-year to $12.39 billion in FY2026, demonstrating meaningful top-line expansion in a competitive retail environment.
- Operating margin of 12.4% and a return on assets of 16.5% in FY2026 indicate that Ulta converts revenue into operating profit efficiently and deploys its asset base effectively.
- The company has an established history of paying dividends, suggesting a degree of financial maturity and commitment to returning value to shareholders.
Bear Case
- Net income declined 4.0% from FY2025 to FY2026 even as revenue grew, indicating that cost pressures are outpacing top-line gains and compressing bottom-line results.
- Diluted EPS grew only 1.2% year-over-year, meaning shareholders saw nearly flat per-share earnings growth despite the strong revenue increase.
- Quarterly momentum was uneven, with net income falling from $305 million in Q1 to $231 million in Q3 before recovering in Q4, reflecting an inconsistent intra-year earnings trajectory rather than sustained acceleration.
What Could Change the Picture
Bullish Triggers
- Sustained sequential improvement in net income and operating income across all four quarters — rather than a mid-year trough followed by a single-quarter recovery — would signal that the profitability pressure is resolving.
- Confirmation of a current, freshly verified dividend at or above historical levels would reinforce the financial health narrative and provide a more precisely calibrated dividend score.
Bearish Triggers
- If the gap between revenue growth and net income growth widens further in coming periods, it would suggest structural margin erosion rather than a temporary cost spike.
- A weakening of the strong Q4 recovery pattern in subsequent quarters would undermine the momentum narrative and raise concerns about the durability of the business's earnings power.
Risk Profile
Medium RiskThe mid-year deceleration in both revenue and net income — with net income falling from $305 million in Q1 to $231 million in Q3 — introduces uncertainty about the consistency of earnings, and the financial health factor score of 8.0/20 suggests the model identified concerns in that dimension that the available filing evidence does not fully illuminate.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.