While there has been evidence of shoppers cutting back amid concerns that the U.S. economy could tip into recession later this year, that was not the case at Ulta Beauty during the significant holiday quarter.

Fueled by shoppers stocking up on serums, moisturizers, acne treatments and holiday gift sets, the beauty retailer blew through Wall Street estimates in the final three months of its financial year ended Jan. 28 to generate annual revenue of more than $10 billion for the first time in it 33-year history.

All major categories delivered double-digit growth during the quarter with price increases not deterring customers at checkout, according to the retailer. In skin care, its fastest-growing category, Ulta name checked Drunk Elephant, The Ordinary, Hero Cosmetics and dermatology-based brands like Roche Pose and Survey as performing particularly well.

Growth of the makeup category, meanwhile, continued its post-pandemic recovery, accelerating from the third quarter with double-digit growth in both prestige and mass makeup, with Fenty Beauty, REM Beauty and recently launched Dior makeup contributing to the increases during the quarter.

As reported last month by WWD, Ulta is shoring up its luxury assortment, including products from Chanel, Hourglass, Dior, Natasha Denona, Tom Ford, Viktor & Rolf, Gucci, Tiffany and Givenchy, with chief executive officer Dave Kimbell telling analysts on a post earnings call on Thursday that he sees “luxury beauty as an emerging opportunity.”

He also cited the continued success of the company’s partnership with Target Corp., adding 254 Ulta Beauty target shop-in-shop locations during the year.

Net sales increased 18.2 percent to $3.2 billion compared to $2.7 billion in the fourth quarter of fiscal 2021 and beat Wall Street expectations of $3.03 billion.

Net income rose 17.8 percent to $340.8 million, compared to $289.4 million in the same period a year earlier, while diluted earnings per share increased 23.5 percent to $6.68, above analysts’ predictions of $5.70.

Ulta Beauty’s strong fourth-quarter results punctuate an exceptional year with record sales, profitability and member growth, reflecting robust demand and best-in-class execution,” Kimbell continued.

As a result of a strong holiday quarter, for the year, net sales increased 18.3 percent to $10.2 billion and net income jumped 26 percent to $1.2 billion.

“For the first time in our 33-year history, Ulta Beauty’s annual revenue surpassed $10 billion, our annual net income exceeded $1 billion, and we exceeded 40 million Ultamate Rewards members,” Kimbell added. “These milestone achievements demonstrate the power of Ulta Beauty’s highly differentiated model, the health of the growing beauty category, and our winning culture and outstanding teams.”

For 2023, Ulta is expecting net sales to come in between $10.95 billion and $11.05 billion and diluted earnings per share at $24.70 to $25.40.

Neil Saunders, managing director of GlobalData, noted that while the retailer’s performance has been very strong, Ulta’s outlook for the year ahead is more conservative.

“The company expects comparable sales to grow in the 4 percent to 5 percent range,” he said. “When stacked up against some of the frothy growth of the past few years this may seem disappointing. However, it simply represents a normalization after a period of very strong growth. Importantly, it is still something of an out-performance and, essentially, means that none of the extensive gains made over the pandemic and beyond will be given back.”

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