ULTA Ulta Beauty Inc

Net Sales of $2.53 Billion Compared to $2.49 Billion in the Year-Ago Quarter

Comparable Sales Increased 0.6%

Net Income of $242.2 Million or $5.14 Per Diluted Share

Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period (“third quarter”) and thirty-nine-week period (“first nine months”) ended November 2, 2024 compared to the same periods ended October 28, 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

 

39 Weeks Ended

 

 

November 2,

 

October 28,

 

 

November 2,

 

October 28,

(Dollars in millions, except per share data)

2024

 

2023

 

2024

 

2023

Net sales

 

$

2,530.1

 

$

2,488.9

 

 

$

7,808.0

 

$

7,653.0

Comparable sales (1)

 

 

0.6%

 

 

4.5%

 

 

 

0.3%

 

 

7.3%

Gross profit (as a percentage of net sales)

 

 

39.7%

 

 

39.9%

 

 

 

39.1%

 

 

39.7%

Selling, general and administrative expenses

 

$

682.3

 

$

661.4

 

 

$

1,993.0

 

$

1,874.2

Operating income (as a percentage of net sales)

 

 

12.6%

 

 

13.1%

 

 

 

13.4%

 

 

15.2%

Diluted earnings per share

 

$

5.14

 

$

5.07

 

 

$

16.93

 

$

17.99

New store openings, net

 

 

26

 

 

12

 

 

 

52

 

 

19

______________________

(1) Comparable sales are calculated based on the comparable 13 and 39 calendar weeks in the current and prior year.

“The Ulta Beauty team delivered better-than-expected sales and profitability reflecting improved sales trends and strong financial discipline. I am proud of the progress we’ve made and encouraged by early signs that our efforts to reinforce our market position and drive improved performance are gaining traction. As we look to the remainder of fiscal 2024, we are focused on executing with excellence across our key initiatives to deliver in a dynamic environment,” said Dave Kimbell, chief executive officer. “We remain confident that our model and strategies will drive long-term profitable growth and share leadership by enhancing our position as the destination for beauty enthusiasts for a lifetime.”

Third Quarter of Fiscal 2024 Compared to Third Quarter of Fiscal 2023

• Net sales increased 1.7% to $2.53 billion compared to $2.49 billion, primarily due to new store contribution, partially offset by a decline in other revenue.
• Comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 0.6% compared to an increase of 4.5%, driven by a 0.5% increase in transactions and a 0.1% increase in average ticket.
• Gross profit was $1.0 billion compared to $992.1 million. As a percentage of net sales, gross profit decreased to 39.7% compared to 39.9%, primarily due to deleverage of store and supply chain fixed costs and lower other revenue, partially offset by favorable channel mix and lower inventory shrink.
• Selling, general and administrative (SG&A) expenses were $682.3 million compared to $661.4 million. As a percentage of net sales, SG&A expenses increased to 27.0% compared to 26.6%, primarily due to deleverage of store payroll and benefits, and corporate overhead, primarily due to strategic investments, partially offset by lower incentive compensation.
• Operating income was $318.5 million, or 12.6% of net sales, compared to $327.2 million, or 13.1% of net sales.
• The tax rate was 24.4% compared to 24.3%.
• Net income was $242.2 million compared to $249.5 million.
• Diluted earnings per share was $5.14 compared to $5.07.

First Nine Months of Fiscal 2024 Compared to First Nine Months of Fiscal 2023

• Net sales increased 2.0% to $7.8 billion compared to $7.7 billion, primarily due to new store contribution and growth in other revenue.
• Comparable sales increased 0.3% compared to an increase of 7.3%, driven by a 0.3% increase in average ticket.
• Gross profit was $3.1 billion compared to $3.0 billion. As a percentage of net sales, gross profit decreased to 39.1% compared to 39.7%, primarily due to lower merchandise margin, partially offset by deleverage of store fixed costs.
• SG&A expenses were $2.0 billion compared to $1.9 billion. As a percentage of net sales, SG&A expenses increased to 25.5% compared to 24.5%, primarily due to deleverage of corporate overhead due to strategic investments and deleverage of store payroll and benefits and store expenses, partially offset by lower incentive compensation.
• Operating income was $1.0 billion, or 13.4% of net sales, compared to $1.2 billion, or 15.2% of net sales.
• The tax rate was 23.9% compared to 23.7%.
• Net income was $807.8 million compared to $896.6 million.
• Diluted earnings per share was $16.93, including a $0.10 benefit due to income tax accounting for stock-based compensation, compared to $17.99, 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 third quarter of fiscal 2024 totaled $177.8 million.

Merchandise inventories, net at the end of the third quarter of fiscal 2024 increased 1.9% to $2.4 billion compared to $2.3 billion at the end of the third quarter of fiscal 2023. The increase was primarily due to the addition of 63 net new stores since October 28, 2023.

Short-term debt at the end of the third quarter of fiscal 2024 was $199.7 million compared to $195.4 million at the end of the third quarter of fiscal 2023, as the Company drew on its revolving credit facility to support ongoing capital allocation priorities, including share repurchases and capital expenditures, and merchandise inventory growth.

Share Repurchase Program

During the third quarter of fiscal 2024, the Company repurchased 731,458 shares of its common stock at a cost of $267.0 million. During the first nine months of fiscal 2024, the Company repurchased 1.9 million shares of its common stock at a cost of $764.5 million. As of November 2, 2024, $2.9 billion remained available under the $3.0 billion share repurchase program announced in October 2024.

Store Update

During the third quarter of fiscal 2024, the Company opened 28 new stores, remodeled 27 stores, and closed two stores. During the first nine months of fiscal 2024, the Company opened 57 new stores, relocated two stores, remodeled 36 stores, and closed five stores. At the end of the third quarter of fiscal 2024, the Company operated 1,437 stores totaling 15.0 million square feet.

Fiscal 2024 Outlook

For fiscal 2024, the Company plans to:

 

 

 

 

 

 

 

Prior FY24 Outlook

 

Updated FY24 Outlook

Net sales

 

 

$11.0 billion to $11.2 billion

 

$11.1 billion to $11.2 billion

Comparable sales

 

 

(2%) to 0%

 

(1%) to 0%

New stores, net

 

 

60-65

 

no change

Remodel and relocation projects

 

 

40-45

 

no change

Operating margin

 

 

12.7% to 13.0%

 

12.9% to 13.1%

Diluted earnings per share

 

 

$22.60 to $23.50

 

$23.20 to $23.75

Share repurchases

 

 

approximately $1 billion

 

no change

Interest income

 

 

approximately $13 million

 

$13 million to $14 million

Effective tax rate

 

 

approximately 24%

 

no change

Capital expenditures

 

 

$400 million to $450 million

 

$400 million to $425 million

Depreciation and amortization expense

 

 

$265 million to $270 million

 

no change

Conference Call Information

A conference call to discuss third quarter of fiscal 2024 results is scheduled for today, December 5, 2024 at 4:30 p.m. ET / 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 1,437 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

 

 

November 2,

 

October 28,

 

 

2024

 

2023

 

 

(Unaudited)

 

(Unaudited)

Net sales

 

$

2,530,100

 

 

100.0

%

 

$

2,488,933

 

 

100.0

%

Cost of sales

 

 

1,524,456

 

 

60.3

%

 

 

1,496,866

 

 

60.1

%

Gross profit

 

 

1,005,644

 

 

39.7

%

 

 

992,067

 

 

39.9

%

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

682,259

 

 

27.0

%

 

 

661,380

 

 

26.6

%

Pre-opening expenses

 

 

4,883

 

 

0.2

%

 

 

3,460

 

 

0.1

%

Operating income

 

 

318,502

 

 

12.6

%

 

 

327,227

 

 

13.1

%

Interest income, net

 

 

(1,674

)

 

(0.1

%)

 

 

(2,497

)

 

(0.1

%)

Income before income taxes

 

 

320,176

 

 

12.7

%

 

 

329,724

 

 

13.2

%

Income tax expense

 

 

77,997

 

 

3.1

%

 

 

80,241

 

 

3.2

%

Net income

 

$

242,179

 

 

9.6

%

 

$

249,483

 

 

10.0

%

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

5.16

 

 

 

 

$

5.09

 

 

 

Diluted

 

$

5.14

 

 

 

 

$

5.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,928

 

 

 

 

 

49,007

 

 

 

Diluted

 

 

47,092

 

 

 

 

 

49,226

 

 

 

Exhibit 2

Ulta Beauty, Inc.

Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

39 Weeks Ended

 

 

November 2,

 

October 28,

 

 

2024

 

2023

 

 

(Unaudited)

 

(Unaudited)

Net sales

 

$

7,808,035

 

 

100.0

%

 

$

7,653,005

 

 

100.0

%

Cost of sales

 

 

4,754,434

 

 

60.9

%

 

 

4,612,469

 

 

60.3

%

Gross profit

 

 

3,053,601

 

 

39.1

%

 

 

3,040,536

 

 

39.7

%

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

1,992,993

 

 

25.5

%

 

 

1,874,201

 

 

24.5

%

Pre-opening expenses

 

 

11,957

 

 

0.2

%

 

 

5,396

 

 

0.1

%

Operating income

 

 

1,048,651

 

 

13.4

%

 

 

1,160,939

 

 

15.2

%

Interest income, net

 

 

(13,100

)

 

(0.2

%)

 

 

(14,294

)

 

(0.2

%)

Income before income taxes

 

 

1,061,751

 

 

13.6

%

 

 

1,175,233

 

 

15.4

%

Income tax expense

 

 

253,903

 

 

3.3

%

 

 

278,597

 

 

3.6

%

Net income

 

$

807,848

 

 

10.3

%

 

$

896,636

 

 

11.7

%

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

17.00

 

 

 

 

$

18.08

 

 

 

Diluted

 

$

16.93

 

 

 

 

$

17.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

47,519

 

 

 

 

 

49,592

 

 

 

Diluted

 

 

47,710

 

 

 

 

 

49,846

 

 

 

Exhibit 3

Ulta Beauty, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

November 2,

 

February 3,

 

October 28,

 

 

2024

 

2024

 

2023

 

 

(Unaudited)

 

 

 

 

(Unaudited)

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

177,782

 

$

766,594

 

$

121,811

Receivables, net

 

 

213,621

 

 

207,939

 

 

202,868

Merchandise inventories, net

 

 

2,365,186

 

 

1,742,136

 

 

2,321,306

Prepaid expenses and other current assets

 

 

135,514

 

 

115,598

 

 

117,282

Prepaid income taxes

 

 

62,759

 

 

4,251

 

 

28,773

Total current assets

 

 

2,954,862

 

 

2,836,518

 

 

2,792,040

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,264,419

 

 

1,182,335

 

 

1,117,874

Operating lease assets

 

 

1,619,055

 

 

1,574,530

 

 

1,578,316

Goodwill

 

 

10,870

 

 

10,870

 

 

10,870

Other intangible assets, net

 

 

281

 

 

510

 

 

591

Deferred compensation plan assets

 

 

48,872

 

 

43,516

 

 

38,371

Other long-term assets

 

 

60,127

 

 

58,732

 

 

56,946

Total assets

 

$

5,958,486

 

$

5,707,011

 

$

5,595,008

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

593,219

 

$

544,001

 

$

597,373

Accrued liabilities

 

 

333,463

 

 

382,468

 

 

405,443

Deferred revenue

 

 

405,040

 

 

436,591

 

 

350,937

Current operating lease liabilities

 

 

284,985

 

 

283,821

 

 

287,786

Accrued income taxes

 

 

—

 

 

11,310

 

 

—

Short-term debt

 

 

199,700

 

 

—

 

 

195,400

Total current liabilities

 

 

1,816,407

 

 

1,658,191

 

 

1,836,939

 

 

 

 

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

1,656,317

 

 

1,627,271

 

 

1,616,747

Deferred income taxes

 

 

91,729

 

 

85,921

 

 

56,874

Other long-term liabilities

 

 

65,024

 

 

56,300

 

 

55,906

Total liabilities

 

 

3,629,477

 

 

3,427,683

 

 

3,566,466

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

2,329,009

 

 

2,279,328

 

 

2,028,542

Total liabilities and stockholders’ equity

 

$

5,958,486

 

$

5,707,011

 

$

5,595,008

Exhibit 4

Ulta Beauty, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

 

 

 

 

 

 

39 Weeks Ended

 

 

November 2,

 

October 28,

 

 

2024

 

2023

 

 

(Unaudited)

 

(Unaudited)

Operating activities

 

 

 

 

 

 

Net income

 

$

807,848

 

 

$

896,636

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

197,075

 

 

 

181,273

 

Non-cash lease expense

 

 

235,950

 

 

 

232,772

 

Deferred income taxes

 

 

5,808

 

 

 

1,528

 

Stock-based compensation expense

 

 

27,691

 

 

 

33,477

 

Loss on disposal of property and equipment

 

 

7,280

 

 

 

6,310

 

Change in operating assets and liabilities:

 

 

 

 

 

 

Receivables

 

 

(5,682

)

 

 

(3,446

)

Merchandise inventories

 

 

(623,050

)

 

 

(717,855

)

Prepaid expenses and other current assets

 

 

(19,916

)

 

 

12,964

 

Income taxes

 

 

(69,818

)

 

 

9,535

 

Accounts payable

 

 

54,210

 

 

 

41,817

 

Accrued liabilities

 

 

(45,777

)

 

 

(34,955

)

Deferred revenue

 

 

(31,551

)

 

 

(43,740

)

Operating lease liabilities

 

 

(250,267

)

 

 

(248,469

)

Other assets and liabilities

 

 

12,240

 

 

 

(9,836

)

Net cash provided by operating activities

 

 

302,041

 

 

 

358,011

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Capital expenditures

 

 

(300,536

)

 

 

(311,030

)

Other investments

 

 

(6,108

)

 

 

(4,870

)

Net cash used in investing activities

 

 

(306,644

)

 

 

(315,900

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Borrowings from credit facility

 

 

199,700

 

 

 

195,400

 

Repurchase of common shares

 

 

(765,384

)

 

 

(840,551

)

Stock options exercised

 

 

9,200

 

 

 

9,302

 

Purchase of treasury shares

 

 

(23,566

)

 

 

(22,328

)

Debt issuance costs

 

 

(4,159

)

 

 

—

 

Net cash used in financing activities

 

 

(584,209

)

 

 

(658,177

)

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(588,812

)

 

 

(616,066

)

Cash and cash equivalents at beginning of period

 

 

766,594

 

 

 

737,877

 

Cash and cash equivalents at end of period

 

$

177,782

 

 

$

121,811

 

Exhibit 5

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

2nd Quarter

 

1,395

 

17

 

1

 

1,411

3rd Quarter

 

1,411

 

28

 

2

 

1,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

2nd Quarter

 

14,614,764

 

178,624

 

10,800

 

14,782,588

3rd Quarter

 

14,782,588

 

258,320

 

20,083

 

15,020,825

Exhibit 6

 

Ulta Beauty, Inc.

Sales by Category

 

The following tables set forth the approximate percentage of net sales by primary category:

 

 

 

 

 

 

 

 

13 Weeks Ended

 

    

November 2,

   

October 28,

 

2024

 

2023

Cosmetics

 

41

%

 

42

%

Skincare

 

23

%

 

22

%

Haircare

 

20

%

 

21

%

Fragrance

 

10

%

 

9

%

Services

 

4

%

 

4

%

Other

 

2

%

 

2

%

 

 

100

%

 

100

%

 

 

 

 

 

 

 

39 Weeks Ended

 

    

November 2,

   

October 28,

 

 

2024

 

2023

Cosmetics

 

41

%

 

42

%

Skincare

 

24

%

 

22

%

Haircare

 

19

%

 

21

%

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/20241205470535/en/

Investor Contact: Kiley Rawlins, CFA Vice President, Investor Relations krawlins@ulta.com

Media Contact: Crystal Carroll Senior Director, Public Relations ccarroll@ulta.com