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
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