01—Abstract
Summary
Summary of the 10-K filed March 27, 2025. Cited figures are marked; the original filing is the authoritative source.
Ulta Beauty, Inc. (ULTA) reported fiscal 2024 (ended February 1, 2025) net sales of $11.30 billiona, up from $11.21 billion in fiscal 2023, which was a 53-week year.
Comparable sales rose 0.7%, driven by a 1.1% increase in average ticket offset by a 0.4% decrease in transactions. Operating income declined to $1.56 billionb from $1.68 billion, and net income fell to $1.20 billion ($25.34 diluted EPS) from $1.29 billion. The decline was driven by higher SG&A expenses, which rose to 24.9% of net sales from 24.0%, and a 30 basis point decline in gross profit margin to 38.8%.
The filing attributes weaker sales trends to persistent inflationary and macroeconomic pressures on consumer spending. The company ended the year with $703.2 millionc in cash and no borrowings under its $800.0 million secured revolving credit facility. Operating cash flow was $1.34 billion, capital expenditures were $374.5 million, and the company repurchased $1.02 billion of common stock.
As of February 1, 2025, $2.7 billiond remained under the $3.0 billion share repurchase program authorized in October 2024. Management expects fiscal 2025 capital expenditures of up to $500 million. The company operated 1,445 stores at year-end, opening 66 new stores during fiscal 2024 and targeting more than 1,800 stores over the long term.
Growth initiatives include the Ulta Beauty at Target shop-in-shops, the planned Mexico joint venture with Grupo Axo, and the Middle East franchise with Alshaya Group. The filing lists risks including macroeconomic conditions, tariffs, competition, cybersecurity, and dependence on top brand partners, which accounted for 54% of net sales.
02—Key points
Key Highlights
- Net sales of $11.30 billion in fiscal 2024, up from $11.21 billion, with comparable sales up 0.7%
- Operating income declined to $1.56 billion from $1.68 billion; net income fell to $1.20 billion from $1.29 billion
- SG&A expenses rose to 24.9% of net sales from 24.0%, citing store payroll investments and corporate strategic investments
- Gross profit margin decreased 30 basis points to 38.8% of net sales, driven by merchandise margin deleverage and promotional activity
- Operating cash flow of $1.34 billion; cash and equivalents of $703.2 million with no borrowings under the $800.0 million credit facility
- Repurchased $1.02 billion of common stock in fiscal 2024; $2.7 billion remained under the October 2024 $3.0 billion program
- Store count grew to 1,445 with 66 openings; long-term target of more than 1,800 stores and loyalty membership growth to about 50 million by 2028
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Ulta Beauty kept $0.11.
- Revenue$11.30B100.0%
- Cost of revenue−$6.91B61.2%
- Gross profit$4.39B38.8%
- Operating costs−$2.82B25.0%
- Operating income$1.56B13.9%
- Interest, other & tax−$364.0M3.2%
- Net income$1.20B10.6%
Where FY2025 revenue went
$11.30B- Cost of revenue: $6.91B, 61% of revenue
- SG&A: $2.81B, 25% of revenue
- Net income: $1.20B, 11% of revenue
- Interest, other & tax: $364.0M, 3.2% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed March 27, 2025Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $11.30B$11.21B | +0.8% |
| Cost of Revenue | $6.91B$6.83B | +1.2% |
| Gross Profit | $4.39B$4.38B | +0.1% |
| SG&A Expenses | $2.81B$2.69B | +4.2% |
| Operating Income | $1.56B$1.68B | −6.7% |
| Net Income | $1.20B$1.29B | −7.0% |
| EPS (Basic) | $25.44$26.18 | −2.8% |
| EPS (Diluted) | $25.34$26.03 | −2.7% |
| Shares Outstanding (Basic) | 47.21M49.30M | −4.3% |
| Shares Outstanding (Diluted) | 47.40M49.60M | −4.4% |
05—Questions
Frequently Asked Questions
How did Ulta Beauty's sales and profitability perform in fiscal 2024?
Net sales rose 0.8% to $11.30 billion, but operating income fell to $1.56 billion from $1.68 billion and net income fell to $1.20 billion from $1.29 billion. Diluted earnings per share were $25.34, compared with $26.03 in fiscal 2023. Fiscal 2023 included a 53rd week worth approximately $181.9 million in net sales.
What factors drove the decline in margins?
Gross profit margin fell 30 basis points to 38.8%, mainly due to 40 basis points of merchandise margin deleverage from lapping prior-year price increases and higher promotions. SG&A rose 90 basis points to 24.9% of net sales, primarily from 60 basis points of store payroll and benefits costs tied to wage investments and 40 basis points of corporate overhead from strategic investments.
How strong is the company's balance sheet and liquidity?
Ulta had $703.2 million in cash and cash equivalents and no borrowings under its $800.0 million secured revolving credit facility, which matures in March 2029. Operating cash flow was $1.34 billion in fiscal 2024, down from $1.48 billion in fiscal 2023. Management believes its primary sources of liquidity will satisfy cash requirements over both the short and long term.
What is the company's capital return and capital spending plan?
Ulta repurchased $1.02 billion of common stock in fiscal 2024 and had $2.7 billion remaining under the October 2024 $3.0 billion authorization, which has no expiration date. Capital expenditures were $374.5 million in fiscal 2024, and the company expects fiscal 2025 capital expenditures of up to $500 million, primarily for new, remodeled, and relocated stores and technology and supply chain investments.
What are the main growth drivers and risks cited in the filing?
Growth drivers include opening more stores (a long-term target of more than 1,800 stores), growing the loyalty program from about 44 million toward 50 million members by 2028, expanding through the Ulta Beauty at Target shop-in-shops, and international expansion in Mexico and the Middle East. Key risks include macroeconomic pressure on discretionary spending, tariffs, competition, cybersecurity, and dependence on top ten brand partners, which accounted for 54% of fiscal 2024 net sales.
06—Continue