What happened

Ulta Beauty (ULTA 1.05%) stock sat out of last year's market rally. In fact, the beauty products retailer shed 12% in 2017, in contrast to a 19% gain in the broader stock market, according to data provided by S&P Global Market Intelligence.

ULTA Chart

ULTA data by YCharts.

That decline still left long-term shareholders looking at sparkling returns. Ulta's stock has beaten the market over the past three-year, five-year, and 10-year time periods.

So what

The 2017 stock price slump stands in contrast to impressive operating results from the retailer. Comparable-store sales grew at a double-digit pace in each of the last three quarters, thanks to a healthy mix of customer traffic gains, higher average spending, and booming demand from the digital selling channel.

A salon customer having her hair colored

Image source: Getty Images.

On the other hand, Ulta's business expansion did slow down during the year. Comps began fiscal 2017 rising at a 14% pace, before decelerating to 12% and then 10%. In late November the retailer affirmed its full-year growth target and notched market-share wins, but was also forced to offer more promotions as the core makeup segment underperformed expectations.

Now what

CEO Mary Dillon and her team are forecasting another growth slowdown in the fiscal fourth quarter, but mainly because comps soared by almost 17% in the year-ago period. Meanwhile, the slightly weaker selling conditions don't threaten management's plans for earnings growth of at least 20% this year -- and through fiscal 2019.