08/29/2024 | Press release | Distributed by Public on 08/29/2024 14:10
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
BOLINGBROOK, Ill.--(BUSINESS WIRE)-- 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
First Six Months of Fiscal 2024 Compared to First Six Months of Fiscal 2023
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:
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
[email protected]
Media Contact:
Crystal Carroll
Senior Director, Public Relations
[email protected]
Source: Ulta Beauty, Inc.
Released August 29, 2024