01—Abstract
Summary
Summary of the 10-Q filed December 5, 2024. Cited figures are marked; the original filing is the authoritative source.
Ulta Beauty, Inc. reported its Form 10-Q for the 13 and 39 weeks ended November 2, 2024.
For the third quarter, net sales were $2,530,100 thousanda ($2.53 billion), up from $2,488,933 thousand, and net income was $242,179 thousand ($242.2 million), down from $249,483 thousand. Diluted EPS was $5.14 versus $5.07. Comparable sales rose 0.6%, driven by a 0.5% increase in transactions and a 0.1% increase in average ticket.
Gross profit as a percentage of net sales fell to 39.7% from 39.9%, and SG&A rose to 27.0% of net sales from 26.6%, citing deleverage of store payroll and corporate overhead tied to strategic investments. For the 39 weeks, net sales were $7.81 billionb, up from $7.65 billion, and net income was $807.8 million, down from $896.6 million. Comparable sales increased 0.3%, and SG&A expenses rose 6.3% to $2.0 billion.
Operating cash flow was $302.0 millionc versus $358.0 million a year earlier. Cash and cash equivalents fell to $177.8 million at November 2, 2024, from $766.6 million at February 3, 2024, while short-term debt under the credit facility was $199.7 million, with no borrowings at fiscal year-end. During the period the company repurchased 1,869,314 shares for $771.5 million.
In October 2024 the Board authorized a new program of up to $3.0 billiond, with $2.9 billion remaining as of November 2, 2024. The company operated 1,437 stores at quarter end, opening 57 new stores in the 39 weeks, and it reported no material changes to risk factors from its fiscal 2023 Form 10-K.
02—Key points
Key Highlights
- Q3 net sales rose 1.7% to $2.53 billion, with comparable sales up 0.6%, driven by transactions (+0.5%) and average ticket (+0.1%).
- Q3 net income fell to $242.2 million from $249.5 million, as SG&A deleverage (27.0% of sales vs. 26.6%) outweighed a gross profit increase of $13.6 million.
- Gross margin contracted to 39.7% in Q3 from 39.9%, due to store and supply chain fixed-cost deleverage and lower other revenue.
- Year-to-date (39 weeks) net income was $807.8 million, down from $896.6 million, with SG&A up 6.3% to $2.0 billion from strategic investments.
- Cash and cash equivalents declined to $177.8 million from $766.6 million at fiscal year-end, while $199.7 million was drawn on the credit facility.
- Ulta repurchased $771.5 million of stock in the 39 weeks and, in October 2024, authorized a new $3.0 billion program with $2.9 billion remaining.
- The company ended the quarter with 1,437 stores, having opened 57 new stores year to date.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Ulta Beauty kept $0.10.
- Revenue$2.53B100.0%
- Cost of revenue−$1.52B60.3%
- Gross profit$1.01B39.7%
- Operating costs−$687.1M27.2%
- Operating income$318.5M12.6%
- Interest, other & tax−$76.3M3.0%
- Net income$242.2M9.6%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed December 5, 2024Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $2.53B$2.49B | +1.7% |
| Cost of Revenue | $1.52B$1.50B | +1.8% |
| Gross Profit | $1.01B$992.07M | +1.4% |
| SG&A Expenses | $682.26M$661.38M | +3.2% |
| Operating Income | $318.50M$327.23M | −2.7% |
| Net Income | $242.18M$249.48M | −2.9% |
| EPS (Basic) | $5.16$5.09 | +1.4% |
| EPS (Diluted) | $5.14$5.07 | +1.4% |
| Shares Outstanding (Basic) | 46.93M49.01M | −4.2% |
| Shares Outstanding (Diluted) | 47.09M49.23M | −4.3% |
05—Questions
Frequently Asked Questions
How did Ulta Beauty perform in the third quarter of fiscal 2024?
Net sales increased to $2.53 billion from $2.49 billion, and comparable sales grew 0.6%. Net income declined to $242.2 million from $249.5 million, mainly because SG&A expenses rose $20.9 million and gross margin slipped to 39.7% from 39.9%.
What drove the decline in profitability?
The filing attributes the SG&A increase primarily to deleverage of store payroll and benefits and corporate overhead, driven by strategic investments, partially offset by lower incentive compensation. Gross margin pressure came from deleverage of store and supply chain fixed costs and lower other revenue.
How much cash does Ulta have and how is it funded?
Cash and cash equivalents were $177.8 million at November 2, 2024, down from $766.6 million at February 3, 2024. The company had $199.7 million outstanding under its credit facility and reported operating cash flow of $302.0 million for the 39 weeks.
What is the status of the share repurchase program?
During the 39 weeks, Ulta repurchased shares for $771.5 million. The October 2024 program authorizes up to $3.0 billion with no expiration date, and $2.9 billion remained available as of November 2, 2024.
Are there any material changes to the company's risk factors?
The filing states there have been no material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended February 3, 2024.
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