Net Sales of $2.7 Billion Compared to $2.6
Billion in the Year-Ago Quarter
Comparable Sales Increased 1.6%
Net Income of $313.1 Million or $6.47 Per
Diluted Share
Company Updates Fiscal 2024 Guidance
Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial
results for the thirteen-week period (“first quarter”) ended May 4,
2024.
13 Weeks Ended
May 4,
April 29,
(Dollars in
millions, except per share data)
2024
2023
Net sales
$
2,725.8
$
2,634.3
Comparable sales (1)
1.6%
9.3%
Gross profit (as a percentage of net
sales)
39.2%
40.0%
Selling, general and administrative
expenses
$
665.9
$
612.1
Operating income (as a percentage of net
sales)
14.7%
16.8%
Diluted earnings per share
$
6.47
$
6.88
New store openings, net
10
4
(1)
Comparable sales are calculated based on
the comparable 13 calendar weeks in the current and prior year.
“The Ulta Beauty team delivered net sales growth of 3.5% and
comparable sales growth of 1.6% in a dynamic operating environment.
I am proud of how our teams continued to execute our
transformational agenda, adapt to a rapidly evolving marketplace,
and thoughtfully manage expenses across the enterprise,” said Dave
Kimbell, chief executive officer. “We have a clear plan to
accelerate our momentum and continue delivering a best-in-class
assortment and engaging experiences for our guests. I remain
confident in our differentiated model, the resilience of the beauty
category, and our ability to execute against our plans, but we have
adjusted our annual guidance as we anticipate the dynamics we faced
in the first quarter to continue for the balance of the year.”
First Quarter of Fiscal 2024 Compared to First Quarter of
Fiscal 2023
- Net sales increased 3.5% to $2.7 billion compared to $2.6
billion, primarily due to increased comparable sales, new store
contribution, and growth in other revenue.
- Comparable sales (sales for stores open at least 14 months and
e-commerce sales) increased 1.6% compared to the first quarter of
fiscal 2023, driven by a 1.3% increase in transactions and a 0.3%
increase in average ticket.
- Gross profit increased 1.4% to $1.07 billion compared to $1.05
billion. As a percentage of net sales, gross profit decreased to
39.2% compared to 40.0%, primarily due to lower merchandise margins
and higher inventory shrink, partially offset by growth in other
revenue.
- Selling, general and administrative (“SG&A”) expenses
increased 8.8% to $665.9 million compared to $612.1 million. As a
percentage of net sales, SG&A expenses increased to 24.4%
compared to 23.2%, primarily due to higher corporate overhead for
strategic investments, higher store payroll and benefits, and
higher store expenses.
- Operating income was $400.9 million, or 14.7% of net sales,
compared to $442.1 million, or 16.8% of net sales.
- The tax rate increased to 23.2% compared to 22.8% primarily due
to a reduced benefit from income tax accounting for stock-based
compensation.
- Net income was $313.1 million compared to $347.1 million.
- Diluted earnings per share was $6.47, including a $0.10 benefit
due to income tax accounting for stock-based compensation, compared
to $6.88, including a $0.14 benefit due to income tax accounting
for stock-based compensation.
Balance Sheet
Cash and cash equivalents at the end of the first quarter of
fiscal 2024 totaled $524.6 million.
Merchandise inventories, net at the end of first quarter of
fiscal 2024 increased to $1.9 billion compared to $1.8 billion at
the end of the first quarter of fiscal 2023. The increase was
primarily due to inventory to support new brand launches, 36 net
new stores, and an increase in distribution center inventory
primarily due to the opening of the market fulfillment center in
Greer, SC.
Share Repurchase Program
During the first quarter of fiscal 2024, the Company repurchased
588,004 shares of its common stock at a cost of $285.1 million. As
of May 4, 2024, $1.8 billion remained available under the $2.0
billion share repurchase program announced in March 2024.
Store Update
During the first quarter of fiscal 2024, we opened 12 new
stores, closed two stores, and relocated one store. At the end of
the first quarter of fiscal 2024 the Company operated 1,395 stores
totaling 14.6 million square feet.
Fiscal 2024 Outlook
The Company has updated its outlook for fiscal 2024.
Prior FY24 Outlook
Updated FY24 Outlook
Net sales
$11.7 billion to $11.8
billion
$11.5 billion to $11.6
billion
Comparable sales
4% to 5%
2% to 3%
New stores, net
60-65
no change
Remodel and relocation projects
40-45
no change
Operating margin
14.0% to 14.3%
13.7% to 14.0%
Diluted earnings per share
$26.20 to $27.00
$25.20 to $26.00
Share repurchases
approximately $1 billion
no change
Interest income
approximately $11 million
approximately $13 million
Effective tax rate
approximately 24.3%
approximately 24%
Capital expenditures
$415 million to $490 million
no change
Depreciation and amortization expense
$275 million to $280 million
$270 million to $275 million
Conference Call Information
A conference call to discuss first quarter of fiscal 2024
results is scheduled for today, May 30, 2024, at 4:30 p.m. Eastern
Time / 3:30 p.m. CT. Investors and analysts who are interested in
participating in the call are invited to dial (877) 704-4453.
Participants may also listen to a real-time audio webcast of the
conference call by visiting the Investor Relations section of the
Company’s website located at https://www.ulta.com/investor. A
replay will be made available online approximately two hours
following the live call for a period of 30 days.
About Ulta Beauty
At Ulta Beauty (NASDAQ: ULTA), the possibilities are beautiful.
Ulta Beauty is the largest specialty U.S. beauty retailer and the
premier beauty destination for cosmetics, fragrance, skin care
products, hair care products and salon services. In 1990, the
Company reinvented the beauty retail experience by offering a new
way to shop for beauty – bringing together All Things Beauty. All
in One Place®. Today, Ulta Beauty operates 1,395 retail stores
across 50 states and also distributes its products through its
website, which includes a collection of tips, tutorials, and social
content. For more information, visit www.ulta.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, which reflect the
company’s current views with respect to, among other things, future
events and financial performance. These statements can be
identified by the use of forward-looking words such as “outlook,”
“believes,” “expects,” “plans,” “estimates,” “targets,”
“strategies” or other comparable words. Any forward-looking
statements contained in this press release are based upon the
company’s historical performance and on current plans, estimates
and expectations. The inclusion of this forward-looking information
should not be regarded as a representation by the company or any
other person that the future plans, estimates, targets, strategies
or expectations contemplated by the company will be achieved. Such
forward-looking statements are subject to various risks and
uncertainties, which include, without limitation:
- macroeconomic conditions, including inflation, elevated
interest rates and recessionary concerns, as well as continuing
labor cost pressures, and transportation and shipping cost
pressures, have had, and may continue to have, a negative impact on
our business, financial condition, profitability, and cash flows
(including future uncertain impacts);
- changes in the overall level of consumer spending and
volatility in the economy, including as a result of macroeconomic
conditions and geopolitical events;
- our ability to sustain our growth plans and successfully
implement our long-range strategic and financial plan;
- the ability to execute our operational excellence priorities,
including continuous improvement, Project SOAR (the replacement of
our enterprise resource planning platform), and supply chain
optimization;
- our ability to gauge beauty trends and react to changing
consumer preferences in a timely manner;
- the possibility that we may be unable to compete effectively in
our highly competitive markets;
- the possibility of significant interruptions in the operations
of our distribution centers, fast fulfillment centers, and market
fulfillment centers;
- the possibility that cybersecurity or information security
breaches and other disruptions could compromise our information or
result in the unauthorized disclosure of confidential
information;
- the possibility of material disruptions to our information
systems, including our Ulta.com website and mobile
applications;
- the failure to maintain satisfactory compliance with applicable
privacy and data protection laws and regulations;
- changes in the good relationships we have with our brand
partners, our ability to continue to obtain sufficient merchandise
from our brand partners, and/or our ability to continue to offer
permanent or temporary exclusive products of our brand
partners;
- our ability to effectively manage our inventory and protect
against inventory shrink;
- changes in the wholesale cost of our products and/or
interruptions at our brand partners’ or third-party vendors’
operations;
- epidemics, pandemics or natural disasters, which could
negatively impact sales;
- the possibility that new store openings and existing locations
may be impacted by developer or co-tenant issues;
- our ability to attract and retain key executive personnel;
- the impact of climate change on our business operations and/or
supply chain;
- our ability to successfully execute our common stock repurchase
program or implement future common stock repurchase programs;
- a decline in operating results which could lead to asset
impairment and store closure charges; and
- other risk factors detailed in the Company’s public filings
with the Securities and Exchange Commission (the SEC), including
risk factors contained in its Annual Report on Form 10‑K for the
fiscal year ended February 3, 2024, as such may be amended or
supplemented in its subsequently filed Quarterly Reports on Form
10-Q.
The Company’s filings with the SEC are available at www.sec.gov.
Except to the extent required by the federal securities laws, the
Company does not undertake to publicly update or revise its
forward-looking statements, whether as a result of new information,
future events or otherwise.
Exhibit 1
Ulta Beauty, Inc.
Consolidated Statements of
Income
(In thousands, except per
share data)
13 Weeks Ended
May 4,
April 29,
2024
2023
(Unaudited)
(Unaudited)
Net sales
$
2,725,848
100.0
%
$
2,634,263
100.0
%
Cost of sales
1,656,068
60.8
%
1,579,406
60.0
%
Gross profit
1,069,780
39.2
%
1,054,857
40.0
%
Selling, general and administrative
expenses
665,913
24.4
%
612,129
23.2
%
Pre-opening expenses
2,919
0.1
%
658
0.0
%
Operating income
400,948
14.7
%
442,070
16.8
%
Interest income, net
(6,900
)
(0.3
%)
(7,348
)
(0.3
%)
Income before income taxes
407,848
15.0
%
449,418
17.1
%
Income tax expense
94,735
3.5
%
102,367
3.9
%
Net income
$
313,113
11.5
%
$
347,051
13.2
%
Net income per common share:
Basic
$
6.51
$
6.92
Diluted
$
6.47
$
6.88
Weighted average common shares
outstanding:
Basic
48,125
50,153
Diluted
48,381
50,469
Exhibit 2
Ulta Beauty, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
May 4,
February 3,
April 29,
2024
2024
2023
(Unaudited)
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
524,596
$
766,594
$
636,449
Receivables, net
203,463
207,939
190,282
Merchandise inventories, net
1,906,040
1,742,136
1,751,235
Prepaid expenses and other current
assets
126,529
115,598
108,014
Prepaid income taxes
—
4,251
—
Total current assets
2,760,628
2,836,518
2,685,980
Property and equipment, net
1,195,658
1,182,335
1,019,978
Operating lease assets
1,561,767
1,574,530
1,559,560
Goodwill
10,870
10,870
10,870
Other intangible assets, net
434
510
1,015
Deferred compensation plan assets
45,718
43,516
37,002
Other long-term assets
56,864
58,732
61,314
Total assets
$
5,631,939
$
5,707,011
$
5,375,719
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
463,777
$
544,001
$
621,272
Accrued liabilities
332,692
382,468
308,583
Deferred revenue
398,729
436,591
357,217
Current operating lease liabilities
284,815
283,821
288,133
Accrued income taxes
92,711
11,310
58,695
Total current liabilities
1,572,724
1,658,191
1,633,900
Non-current operating lease
liabilities
1,607,953
1,627,271
1,610,256
Deferred income taxes
89,556
85,921
57,490
Other long-term liabilities
60,963
56,300
56,005
Total liabilities
3,331,196
3,427,683
3,357,651
Commitments and contingencies
Total stockholders’ equity
2,300,743
2,279,328
2,018,068
Total liabilities and stockholders’
equity
$
5,631,939
$
5,707,011
$
5,375,719
Exhibit 3
Ulta Beauty, Inc.
Consolidated Statements of
Cash Flows
(In thousands)
13 Weeks Ended
May 4,
April 29,
2024
2023
(Unaudited)
(Unaudited)
Operating activities
Net income
$
313,113
$
347,051
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
64,739
57,949
Non-cash lease expense
77,938
75,478
Deferred income taxes
3,635
2,144
Stock-based compensation expense
10,082
9,721
Loss on disposal of property and
equipment
2,975
1,451
Change in operating assets and
liabilities:
Receivables
4,476
9,140
Merchandise inventories
(163,904
)
(147,784
)
Prepaid expenses and other current
assets
(10,931
)
22,232
Income taxes
85,652
97,003
Accounts payable
(74,069
)
62,257
Accrued liabilities
(43,846
)
(98,515
)
Deferred revenue
(37,862
)
(37,460
)
Operating lease liabilities
(83,500
)
(78,562
)
Other assets and liabilities
10,842
(17,204
)
Net cash provided by operating
activities
159,340
304,901
Investing activities
Capital expenditures
(91,024
)
(109,766
)
Other investments
(2,563
)
(314
)
Net cash used in investing activities
(93,587
)
(110,080
)
Financing activities
Repurchase of common shares
(289,431
)
(283,517
)
Stock options exercised
8,913
8,927
Purchase of treasury shares
(23,283
)
(21,659
)
Debt issuance costs
(3,950
)
—
Net cash used in financing activities
(307,751
)
(296,249
)
Net decrease in cash and cash
equivalents
(241,998
)
(101,428
)
Cash and cash equivalents at beginning of
period
766,594
737,877
Cash and cash equivalents at end of
period
$
524,596
$
636,449
Exhibit 4
Ulta Beauty, Inc.
Store Update
Total stores open
Number of stores
Number of stores
Total stores
at beginning of the
opened during the
closed during the
open at
Fiscal 2024
quarter
quarter
quarter
end of the quarter
1st Quarter
1,385
12
2
1,395
Gross square feet for
Total gross square
stores opened or
Gross square feet for
Total gross square
feet at beginning of
expanded during the
stores closed
feet at end of the
Fiscal 2024
the quarter
quarter
during the quarter
quarter
1st Quarter
14,515,593
114,786
15,615
14,614,764
Exhibit 5
Ulta Beauty, Inc.
Sales by Category
The following table sets forth the
approximate percentage of net sales by primary category:
13 Weeks Ended
May 4,
April 29,
2024
2023
Cosmetics
42
%
44
%
Skincare
23
%
22
%
Haircare
19
%
19
%
Fragrance
10
%
9
%
Services
4
%
4
%
Other
2
%
2
%
100
%
100
%
Certain sales departments were
reclassified between categories in the prior year to conform to
current year presentation, including moving the bath category from
Fragrance to Skincare.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240530418457/en/
Investor Contacts: Kiley Rawlins, CFA Vice President, Investor
Relations krawlins@ulta.com
Media Contact: Crystal Carroll Senior Director, Public Relations
ccarroll@ulta.com
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