10 Best Skincare Stocks to Buy According to Hedge Funds

4. Ulta Beauty Inc. (NASDAQ:ULTA)

Number of Hedge Fund Investors: 47

Ulta Beauty, Inc. (NASDAQ:ULTA), one of the Best Beauty Stocks, offers a remarkable opportunity in the skincare industry. The company operates storefronts in strip malls all around the country, where it offers beauty items. The company’s hair salons, which also serve to attract clients to the stores, give it an edge over other physical retailers and beauty merchants like Sephora.

The business has continuously raised comparable sales throughout the years, and its stock has continuously done well. However, the company faced competition from mass-market retailers like Kohl’s and CVS, making 2024 a challenging year. Ulta Beauty, Inc. (NASDAQ:ULTA) also signed a deal with Target to open 100 stores within Target stores in the upcoming years as part of its commercial expansion. Notwithstanding its recent difficulties, it still enjoys several competitive advantages, including its supermarket retail format, reward program, wide selection, and hair salons.

The opening of new stores was primarily responsible for Ulta Beauty’s (NASDAQ:ULTA) 1.7% year-over-year growth in third-quarter fiscal 2024 net sales of $2.53 billion, which was partially offset by a decline in other revenue. Comparable sales increased by 0.6% as a result of a 0.1% increase in average ticket size and a 0.5% increase in transactions. Operating income was $318.5 million, or 12.6% of net sales, despite higher SG&A expenses. Net income reached $242.2 million, while diluted earnings per share rose from $5.07 to $5.14.

The company continued to grow, adding 57 new locations in 2024 and repurchasing $764.5 million worth of shares, showing confidence in its long-term growth strategy. Ulta Beauty, Inc. (NASDAQ:ULTA) seems to be headed for more growth because of its distinctive business strategy.