Image Source: UnsplashUlta Beauty Inc. (ULTA) recently reported lovely fourth quarter results, with sales increasing 10% to $3.55 billion, net income jumping 16% to $394.4 million, and EPS up 21% to $8.08. Comparable store sales increased 2.5%, driven by a 4.5% increase in transactions and a 1.9% decrease in average ticket, highlights Ingrid Hendershot, editor of Hendershot Investments.For the full fiscal year, revenues rose 10% to $11.2 billion, with net income increasing 4% to $1.29 billion and EPS up 8% to $26.03. Return on shareholders’ equity was a gorgeous and profitable 56.6%.Free cash flow declined 11% to $1 billion with the company repurchasing 2.2 million of its shares during the year for $1 billion at an average cost of about $454.54 per share. The company’s board of directors approved a new share repurchase authorization of $2 billion.

Ulta Beauty Inc. (ULTA)
Since 2014, Ulta Beauty has returned $5.8 billion to shareholders through its share repurchase program, while continuing to make strategic growth investments. Ulta Beauty announced the formation of a joint venture with Axo, a highly experienced operator of global brands, to launch and operate Ulta Beauty in Mexico in 2025.International expansion represents an incremental, long-term opportunity for Ulta to extend their reach and leverage their differentiated value proposition. The company’s outlook for fiscal 2024 is for net sales between $11.7 billion to $11.8 billion, representing 4% to 5% growth, driven by 4%-to-5% comparable store sales growth and the opening of 60-65 new stores.The company’s operating margin is expected in the range of 14% to 14.3%, leading to EPS of $26.20 to $27, representing 1% to 4% growth. Capital expenditures are expected in the range of $415 million to $490 million.My recommended action would be to consider buying shares of ULTA.

About the Author
Ingrid R. Hendershot, CFA, is founder and president of Hendershot Investments, Inc., an investment management firm established in 1994. She is also editor of Hendershot Investments, a quarterly investment newsletter designed for long-term investors seeking to invest in high-quality companies at reasonable valuations.Ms. Hendershot graduated from The Pennsylvania State University earning a BS in accounting and an MBA from George Washington University.More By This Author:Addus HomeCare: A Home Health Care Provider With Solid GrowthBeyond The Magnificent 7: Stocks, Sectors, & Strategies For A Broader Market With New LeadersQQQ: In A Bull Market Like This One, You Need To Be In Tech