Net Sales of $2.6 Billion Compared to $2.5
Billion in the Year-Ago Quarter
Comparable Sales Decreased 1.2%
Net Income of $252.6 Million or $5.30 Per
Diluted Share
Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial
results for the thirteen-week period (“second quarter”) and
twenty-six-week period (“first six months”) ended August 3, 2024
compared to the same periods ended July 29, 2023.
13 Weeks Ended
26 Weeks Ended
August 3,
July 29,
August 3,
July 29,
(Dollars in
millions, except per share data)
2024
2023
2024
2023
Net sales
$
2,552.1
$
2,529.8
$
5,277.9
$
5,164.1
Comparable sales (1)
(1.2%)
8.0%
0.2%
8.7%
Gross profit (as a percentage of net
sales)
38.3%
39.3%
38.8%
39.7%
Selling, general and administrative
expenses
$
644.8
$
600.7
$
1,310.7
$
1,212.8
Operating income (as a percentage of net
sales)
12.9%
15.5%
13.8%
16.1%
Diluted earnings per share
$
5.30
$
6.02
$
11.78
$
12.90
New store openings, net
16
3
26
7
_____________
(1) Comparable sales are calculated based on the comparable 13
and 26 calendar weeks in the current and prior year.
“While we are encouraged by many positive indicators across our
business, our second quarter performance did not meet our
expectations, driven primarily by a decline in comparable store
sales. We are clear about the factors that adversely impacted our
store performance, and we have actions underway to address the
trends,” said Dave Kimbell, chief executive officer. “We are
focused on driving stronger sales and traffic and continuing to
exercise financial discipline. In light of our first half trends
and a more cautious outlook, we have updated our full year
expectations. I remain confident in the power of our differentiated
model, the strength of our financial foundation, and our ability to
deliver value for our shareholders over the long term.”
Second Quarter of Fiscal 2024 Compared to Second Quarter of
Fiscal 2023
- Net sales increased 0.9% to $2.6 billion compared to $2.5
billion, primarily due to new store contribution and growth in
other revenue.
- Comparable sales (sales for stores open at least 14 months and
e-commerce sales) decreased 1.2% compared to an increase of 8.0%,
driven by a 1.8% decrease in transactions and a 0.6% increase in
average ticket.
- Gross profit was $978.2 million compared to $993.6 million. As
a percentage of net sales, gross profit decreased to 38.3% compared
to 39.3%, primarily due to lower merchandise margins and deleverage
of store fixed costs, partially offset by growth in other revenue
and lower inventory shrink.
- Selling, general and administrative (SG&A) expenses were
$644.8 million compared to $600.7 million. As a percentage of net
sales, SG&A expenses increased to 25.3% compared to 23.7%,
primarily due to deleverage of store payroll and benefits,
corporate overhead primarily due to strategic investments, store
expenses, and marketing expenses, partially offset by lower
incentive compensation.
- Operating income was $329.2 million, or 12.9% of net sales,
compared to $391.6 million, or 15.5% of net sales.
- The tax rate was 24.3% compared to 24.2%.
- Net income was $252.6 million compared to $300.1 million.
- Diluted earnings per share was $5.30 compared to $6.02.
First Six Months of Fiscal 2024 Compared to First Six Months
of Fiscal 2023
- Net sales increased 2.2% to $5.3 billion compared to $5.2
billion, primarily due to new store contribution and growth in
other revenue.
- Comparable sales increased 0.2% compared to an increase of
8.7%, driven by a 0.4% increase in average ticket and a 0.2%
decrease in transactions.
- Gross profit was flat at $2.0 billion. As a percentage of net
sales, gross profit decreased to 38.8% compared to 39.7%, primarily
due to lower merchandise margin and deleverage of store fixed
costs, partially offset by growth in other revenue.
- SG&A expenses were $1.3 billion compared to $1.2 billion.
As a percentage of net sales, SG&A expenses increased to 24.8%
compared to 23.5%, primarily due to deleverage of corporate
overhead primarily due to strategic investments, store payroll and
benefits, store expenses, and marketing expenses, partially offset
by lower incentive compensation.
- Operating income was $730.1 million, or 13.8% of net sales,
compared to $833.7 million, or 16.1% of net sales.
- The tax rate was 23.7% compared to 23.5%.
- Net income was $565.7 million compared to $647.2 million.
- Diluted earnings per share was $11.78, including a $0.10
benefit due to income tax accounting for stock-based compensation,
compared to $12.90, 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 second quarter of
fiscal 2024 totaled $414.0 million.
Merchandise inventories, net at the end of the second quarter of
fiscal 2024 increased 10.1% to $2.0 billion compared to $1.8
billion at the end of the second quarter of fiscal 2023. The
increase was primarily due to inventory to support new brand
launches, the opening of the new market fulfillment center in
Greer, SC, and the addition of 49 net new stores since July 29,
2023.
Share Repurchase Program
During the second quarter of fiscal 2024, the Company
repurchased 549,852 shares of its common stock at a cost of $212.3
million. During the first six months of fiscal 2024, the Company
repurchased 1.1 million shares of its common stock at a cost of
$497.5 million. As of August 3, 2024, $1.6 billion remained
available under the $2.0 billion share repurchase program announced
in March 2024.
Store Update
During the second quarter of fiscal 2024, the Company opened 17
new stores, relocated one store, remodeled nine stores, and closed
one store. During the first six months of fiscal 2024, the Company
opened 29 new stores, relocated two stores, remodeled nine stores,
and closed three stores. At the end of the second quarter of fiscal
2024, the Company operated 1,411 stores totaling 14.8 million
square feet.
Fiscal 2024 Outlook
For fiscal 2024, the Company plans to:
Prior FY24 Outlook
Updated FY24 Outlook
Net sales
$11.5 billion to $11.6
billion
$11.0 billion to $11.2
billion
Comparable sales
2% to 3%
(2%) to 0%
New stores, net
60-65
no change
Remodel and relocation projects
40-45
no change
Operating margin
13.7% to 14.0%
12.7% to 13.0%
Diluted earnings per share
$25.20 to $26.00
$22.60 to $23.50
Share repurchases
approximately $1 billion
no change
Interest income
approximately $13 million
no change
Effective tax rate
approximately 24%
no change
Capital expenditures
$415 million to $490 million
$400 million to $450 million
Depreciation and amortization expense
$270 million to $275 million
$265 million to $270 million
Conference Call Information
A conference call to discuss second quarter of fiscal 2024
results is scheduled for today, August 29, 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 1,411 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
August 3,
July 29,
2024
2023
(Unaudited)
(Unaudited)
Net sales
$
2,552,087
100.0
%
$
2,529,809
100.0
%
Cost of sales
1,573,910
61.7
%
1,536,197
60.7
%
Gross profit
978,177
38.3
%
993,612
39.3
%
Selling, general and administrative
expenses
644,821
25.3
%
600,692
23.7
%
Pre-opening expenses
4,155
0.2
%
1,278
0.1
%
Operating income
329,201
12.9
%
391,642
15.5
%
Interest income, net
(4,526
)
(0.2
%)
(4,449
)
(0.2
%)
Income before income taxes
333,727
13.1
%
396,091
15.7
%
Income tax expense
81,171
3.2
%
95,989
3.8
%
Net income
$
252,556
9.9
%
$
300,102
11.9
%
Net income per common share:
Basic
$
5.32
$
6.05
Diluted
$
5.30
$
6.02
Weighted average common shares
outstanding:
Basic
47,505
49,617
Diluted
47,667
49,849
Exhibit 2
Ulta Beauty, Inc.
Consolidated Statements of
Income
(In thousands, except per
share data)
26 Weeks Ended
August 3,
July 29,
2024
2023
(Unaudited)
(Unaudited)
Net sales
$
5,277,935
100.0
%
$
5,164,072
100.0
%
Cost of sales
3,229,978
61.2
%
3,115,603
60.3
%
Gross profit
2,047,957
38.8
%
2,048,469
39.7
%
Selling, general and administrative
expenses
1,310,734
24.8
%
1,212,821
23.5
%
Pre-opening expenses
7,074
0.1
%
1,936
0.0
%
Operating income
730,149
13.8
%
833,712
16.1
%
Interest income, net
(11,426
)
(0.2
%)
(11,797
)
(0.2
%)
Income before income taxes
741,575
14.1
%
845,509
16.4
%
Income tax expense
175,906
3.3
%
198,356
3.8
%
Net income
$
565,669
10.7
%
$
647,153
12.5
%
Net income per common share:
Basic
$
11.83
$
12.97
Diluted
$
11.78
$
12.90
Weighted average common shares
outstanding:
Basic
47,815
49,885
Diluted
48,022
50,157
Exhibit 3
Ulta Beauty, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
August 3,
February 3,
July 29,
2024
2024
2023
(Unaudited)
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
413,962
$
766,594
$
388,627
Receivables, net
200,863
207,939
174,444
Merchandise inventories, net
1,998,286
1,742,136
1,815,539
Prepaid expenses and other current
assets
132,023
115,598
110,524
Prepaid income taxes
53,607
4,251
30,114
Total current assets
2,798,741
2,836,518
2,519,248
Property and equipment, net
1,225,850
1,182,335
1,073,144
Operating lease assets
1,599,735
1,574,530
1,549,146
Goodwill
10,870
10,870
10,870
Other intangible assets, net
357
510
718
Deferred compensation plan assets
46,280
43,516
40,087
Other long-term assets
55,575
58,732
55,547
Total assets
$
5,737,408
$
5,707,011
$
5,248,760
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
566,904
$
544,001
$
521,315
Accrued liabilities
348,042
382,468
328,247
Deferred revenue
394,987
436,591
354,253
Current operating lease liabilities
281,301
283,821
287,359
Accrued income taxes
—
11,310
—
Total current liabilities
1,591,234
1,658,191
1,491,174
Non-current operating lease
liabilities
1,647,698
1,627,271
1,593,040
Deferred income taxes
88,461
85,921
56,012
Other long-term liabilities
61,855
56,300
56,657
Total liabilities
3,389,248
3,427,683
3,196,883
Commitments and contingencies
Total stockholders’ equity
2,348,160
2,279,328
2,051,877
Total liabilities and stockholders’
equity
$
5,737,408
$
5,707,011
$
5,248,760
Exhibit 4
Ulta Beauty, Inc.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
26 Weeks Ended
August 3,
July 29,
2024
2023
(Unaudited)
(Unaudited)
Operating activities
Net income
$
565,669
$
647,153
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
130,053
119,862
Non-cash lease expense
163,481
152,867
Deferred income taxes
2,540
666
Stock-based compensation expense
19,272
21,539
Loss on disposal of property and
equipment
5,204
3,878
Change in operating assets and
liabilities:
Receivables
7,076
24,978
Merchandise inventories
(256,150
)
(212,088
)
Prepaid expenses and other current
assets
(16,425
)
19,722
Income taxes
(60,666
)
8,194
Accounts payable
29,715
(38,752
)
Accrued liabilities
(33,634
)
(102,763
)
Deferred revenue
(41,604
)
(40,424
)
Operating lease liabilities
(170,779
)
(163,527
)
Other assets and liabilities
15,127
(12,497
)
Net cash provided by operating
activities
358,879
428,808
Investing activities
Capital expenditures
(186,301
)
(204,748
)
Other investments
(5,091
)
(1,687
)
Net cash used in investing activities
(191,392
)
(206,435
)
Financing activities
Repurchase of common shares
(501,768
)
(559,011
)
Stock options exercised
9,196
9,147
Purchase of treasury shares
(23,459
)
(21,759
)
Debt issuance costs
(4,088
)
—
Net cash used in financing activities
(520,119
)
(571,623
)
Net decrease in cash and cash
equivalents
(352,632
)
(349,250
)
Cash and cash equivalents at beginning of
period
766,594
737,877
Cash and cash equivalents at end of
period
$
413,962
$
388,627
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
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
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
August 3,
July 29,
2024
2023
Cosmetics
39%
40%
Skincare
24%
23%
Haircare
20%
22%
Fragrance
11%
9%
Services
4%
4%
Other
2%
2%
100%
100%
26 Weeks Ended
August 3,
July 29,
2024
2023
Cosmetics
40%
42%
Skincare
24%
22%
Haircare
19%
21%
Fragrance
11%
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/20240829270411/en/
Investor Contact: Kiley Rawlins, CFA Vice President, Investor
Relations krawlins@ulta.com
Media Contact: Crystal Carroll Senior Director, Public Relations
ccarroll@ulta.com
Ulta Beauty (NASDAQ:ULTA)
Historical Stock Chart
From Nov 2024 to Dec 2024
Ulta Beauty (NASDAQ:ULTA)
Historical Stock Chart
From Dec 2023 to Dec 2024
