ULTAUlta Beauty
Is the business good?
The checks split: earnings fully cash-backed (1.3×) and elite returns on assets, but margins compressing.
Mixed fundamental signals. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Negative operating leverage, costs are rising faster than sales, squeezing margins as it grows.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 45% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is ULTA?
Ulta Beauty earns 46% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 37 points above what the capital costs: growth creates value
- Operating margin
- 12%
Operating margin · Specialty Retail median 8.1% · 12 months to Q2 2026
- Cash conversion
- 1.28×
Cash conversion · 1.08× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −4.5%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | 3.9% |
| FY2021 | 15% |
| FY2022 | 16% |
| FY2023 | 15% |
| FY2024 | 14% |
| FY2025 | 12% |
Details›
- Gross margin12 months to Q2 2026
- 39%
- Operating margin12 months to Q2 2026
- 12%
- Net margin12 months to Q2 2026
- 9.3%
- Free cash flow margin
- 8.9%
- Revenue, trailing twelve months
- $13.0B
- Free cash flow, trailing twelve months
- $1.15B
- Net income, trailing twelve months
- $1.21B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 46%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Specialty Retail
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