Ulta Beauty Announces First Quarter Fiscal 2024 Results
Ulta Beauty (NASDAQ: ULTA) reported its financial results for the first quarter of fiscal 2024, ending May 4, 2024. The company achieved net sales of $2.7 billion, a 3.5% increase from the previous year's $2.6 billion. Comparable sales grew by 1.6%, driven by a 1.3% rise in transactions and a 0.3% increase in the average ticket. Net income stood at $313.1 million, equating to $6.47 per diluted share, down from $347.1 million or $6.88 per share in Q1 2023.
Gross profit saw a slight increase to $1.07 billion, although the gross margin decreased to 39.2% from 40.0%. Operating income fell to $400.9 million, representing 14.7% of sales, compared to 16.8% in the previous year. SG&A expenses rose by 8.8% to $665.9 million.
Ulta opened 12 new stores and closed 2, bringing the total to 1,395 stores. The company repurchased 588,004 shares worth $285.1 million in Q1 2024. Updated FY24 guidance predicts net sales between $11.5 billion and $11.6 billion, and diluted EPS between $25.20 and $26.00.
- Net sales increased by 3.5% to $2.7 billion.
- Comparable sales grew by 1.6%, driven by a 1.3% rise in transactions.
- Gross profit rose slightly to $1.07 billion.
- The company opened 12 new stores, raising the total to 1,395.
- Repurchased 588,004 shares worth $285.1 million in Q1 2024.
- Cash and cash equivalents at the end of Q1 2024 totaled $524.6 million.
- Inventory supports new brand launches and new stores.
- Net income decreased to $313.1 million from $347.1 million.
- Diluted EPS dropped to $6.47 from $6.88.
- Gross margin declined to 39.2% from 40.0%.
- Operating income as a percentage of sales fell to 14.7% from 16.8%.
- SG&A expenses rose by 8.8%, impacting profitability.
- Updated FY24 guidance lowered net sales to $11.5-$11.6 billion from $11.7-$11.8 billion.
- Lowered FY24 diluted EPS forecast to $25.20-$26.00 from $26.20-$27.00.
Insights
Ulta Beauty's first-quarter fiscal 2024 results show a mixed performance that should be carefully analyzed by investors. Net sales grew by
Additionally, Selling, General and Administrative (SG&A) expenses rose by
In summary, Ulta’s results reflect a complex scenario: robust top-line growth paired with rising costs and shrinking margins. This duality may dampen investor optimism, especially considering the adjusted fiscal 2024 guidance projecting lower net sales and comparable sales growth. The share repurchase program, with $1.8 billion remaining as of now, provides a cushion by potentially boosting shareholder value, yet it also signifies the management's focus on returning capital to shareholders amidst a challenging operating environment.
Net Sales of
Comparable Sales Increased
Net Income of
Company Updates Fiscal 2024 Guidance
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13 Weeks Ended |
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May 4, |
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April 29, |
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(Dollars in millions, except per share data) |
2024 |
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2023 |
|||
Net sales |
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$ |
2,725.8 |
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$ |
2,634.3 |
Comparable sales (1) |
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Gross profit (as a percentage of net sales) |
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Selling, general and administrative expenses |
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$ |
665.9 |
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$ |
612.1 |
Operating income (as a percentage of net sales) |
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Diluted earnings per share |
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$ |
6.47 |
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$ |
6.88 |
New store openings, net |
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10 |
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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
First Quarter of Fiscal 2024 Compared to First Quarter of Fiscal 2023
-
Net sales increased
3.5% to$2.7 billion $2.6 billion -
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 a1.3% increase in transactions and a0.3% increase in average ticket. -
Gross profit increased
1.4% to$1.07 billion $1.05 billion 39.2% compared to40.0% , 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 $612.1 million 24.4% compared to23.2% , primarily due to higher corporate overhead for strategic investments, higher store payroll and benefits, and higher store expenses. -
Operating income was
$400.9 million 14.7% of net sales, compared to$442.1 million 16.8% of net sales. -
The tax rate increased to
23.2% compared to22.8% primarily due to a reduced benefit from income tax accounting for stock-based compensation. -
Net income was
$313.1 million $347.1 million -
Diluted earnings per share was
$6.47 $0.10 $6.88 $0.14
Balance Sheet
Cash and cash equivalents at the end of the first quarter of fiscal 2024 totaled
Merchandise inventories, net at the end of first quarter of fiscal 2024 increased to
Share Repurchase Program
During the first quarter of fiscal 2024, the Company repurchased 588,004 shares of its common stock at a cost of
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.
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Prior FY24 Outlook |
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Updated FY24 Outlook |
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Net sales |
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Comparable sales |
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New stores, net |
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60-65 |
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no change |
Remodel and relocation projects |
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40-45 |
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no change |
Operating margin |
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Diluted earnings per share |
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Share repurchases |
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approximately |
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no change |
Interest income |
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approximately |
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approximately |
Effective tax rate |
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approximately |
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approximately |
Capital expenditures |
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no change |
Depreciation and amortization expense |
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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
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 |
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Ulta Beauty, Inc. |
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Consolidated Statements of Income |
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(In thousands, except per share data) |
||||||||||||||
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13 Weeks Ended |
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May 4, |
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April 29, |
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2024 |
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2023 |
||||||||||
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(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 |
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|
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 |
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$ |
313,113 |
|
|
11.5 |
% |
|
$ |
347,051 |
|
|
13.2 |
% |
|
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|
|
|
|
|
|
|
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|
||||
Net income per common share: |
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|
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|
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Basic |
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$ |
6.51 |
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|
|
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$ |
6.92 |
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Diluted |
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$ |
6.47 |
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$ |
6.88 |
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Weighted average common shares outstanding: |
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Basic |
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|
48,125 |
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|
|
|
|
50,153 |
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Diluted |
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|
48,381 |
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|
|
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|
50,469 |
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Exhibit 2 |
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Ulta Beauty, Inc. |
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Condensed Consolidated Balance Sheets |
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(In thousands) |
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May 4, |
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February 3, |
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April 29, |
|||
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2024 |
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2024 |
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2023 |
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(Unaudited) |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
524,596 |
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$ |
766,594 |
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$ |
636,449 |
Receivables, net |
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|
203,463 |
|
|
207,939 |
|
|
190,282 |
Merchandise inventories, net |
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|
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 |
|
|
|
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|
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|
|
|
|
Liabilities and stockholders’ equity |
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|
|
|
|
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|
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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 |
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Ulta Beauty, Inc. |
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Consolidated Statements of Cash Flows |
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(In thousands) |
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||
|
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13 Weeks Ended |
||||||
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May 4, |
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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 |
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Ulta Beauty, Inc. |
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Store Update |
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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 |
|
|
|
|
|
|
|
|
|
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|
|
Gross square feet for |
|
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|
|
|
|
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 |
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Ulta Beauty, Inc. |
||||||
Sales by Category |
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|
||||||
The following table sets forth the approximate percentage of net sales by primary category: |
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|
|
||
|
|
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 |
% |
|
|
|
|
|
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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. |
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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
Source: Ulta Beauty, Inc.
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