Don't be so quick to give up on the growth juggernaut that is Ulta Beauty (ULTA - Get Report) due to some less than sexy guidance.

Beauty retailer Ulta Beauty's 'All Things Beauty, All in One Place' strategy has led to strong financials for the company, while also driving sizeable share price gains over the last few years.

The company delivered yet another solid earnings beat recently, and coupled with the unveiling of a new deal with Estee Lauder (EL - Get Report)   to sell the MAC brand, the stock is worthy of buying on weakness.

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Ulta Beauty is one of the leading beauty businesses in the U.S., offering over 20,000 products across more than 500 popular beauty brands, encompassing every imaginable category and price point.

 

Annual sales have charged ahead from less than $800 million in 2007 to close to $4 billion last year, a five-fold increase over the past decade. Profitability has also seen a massive upswing from just south of $25 million to over $300 million in the last fiscal year.

None of the company's peers in the segment can hold a candle to these numbers.

Sally Beauty Holdings' (SBH - Get Report) net profit has been stuck in a rut over the last few years while Estee Lauder has only grown sales by roughly 50% over the past decade. Its earnings have been declining slowly since peaking in 2014. Coty's (COTY - Get Report) story is largely similar.

To be sure, the latest guidance was admittedly soft with profit growth expectations for the year in the low twenties percentage range. While this was below analysts' expectations for 26% earnings per share growth in 2017, Ulta Beauty's management has historically been conservative with its outlooks.

Given its solid financial situation of over $475 million in cash and zero debt, expected 20% plus earnings growth annually over the next five years, and unique business model (their are salons in the stores, after all) it would be wise for investors to keep a close eye on Ulta Beauty.

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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.

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