01—Abstract
Summary
Summary of the 10-Q filed May 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Ulta Beauty, Inc. reported net sales of $2,848,367 thousanda ($2.85 billion) for the 13 weeks ended May 3, 2025, up from $2,725,848 thousand in the prior-year period, with the filing stating net sales increased $122.5 million or 4.5%.
Comparable sales rose 2.9%, driven by a 2.3% increase in average ticket and a 0.6% increase in transactions. Operating income was $401,777 thousandb versus $400,948 thousand a year earlier, and net income declined to $305,052 thousand from $313,113 thousand. Diluted EPS was $6.70 compared with $6.47 in the prior-year quarter, reflecting a lower share count after repurchases.
Gross margin was 39.1% versus 39.2%, and SG&A rose to 24.9% of net sales from 24.4%, attributed to store payroll and store expense deleverage. Cash and cash equivalents fell to $454.6 millionc from $703.2 million at February 1, 2025. Operating cash flow was $220.0 million, while the company repurchased $362.1 million of common stock including excise tax in the quarter, leaving $2.3 billion available under the October 2024 $3.0 billion authorization.
The credit facility had no borrowings outstanding, and the company was in compliance with its covenants. Merchandise inventories increased 11.3% year over year to $2.1 billiond, which the filing attributes to new brand launches and the addition of 56 net new stores since May 4, 2024. The company operated 1,451 stores at quarter end.
Management cited persistent inflationary and macroeconomic pressures, including existing and potential tariffs, and stated these could contribute to lower sales trends throughout fiscal 2025. The effective tax rate rose to 24.6% from 23.2%, primarily due to a reduced benefit from stock-based compensation tax accounting. The filing reports no material changes to risk factors from the fiscal 2024 Form 10-K.
02—Key points
Key Highlights
- Net sales of $2.85 billion, up 4.5% from $2.73 billion, with comparable sales up 2.9%
- Net income of $305.1 million, down from $313.1 million, while diluted EPS rose to $6.70 from $6.47
- Gross margin of 39.1% versus 39.2%; SG&A rose to 24.9% of net sales from 24.4%
- Operating income of $401.8 million, essentially flat versus $400.9 million a year earlier
- Cash and cash equivalents declined to $454.6 million from $703.2 million at February 1, 2025, after $362.1 million of share repurchases
- Operating cash flow of $220.0 million; no borrowings outstanding on the credit facility
- Management flagged inflation and tariffs as potential drags on sales trends throughout fiscal 2025
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Ulta Beauty kept $0.11.
- Revenue$2.85B100.0%
- Cost of revenue−$1.73B60.9%
- Gross profit$1.11B39.1%
- Operating costs−$712.4M25.0%
- Operating income$401.8M14.1%
- Interest, other & tax−$96.7M3.4%
- Net income$305.1M10.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 29, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $2.85B$2.73B | +4.5% |
| Cost of Revenue | $1.73B$1.66B | +4.7% |
| Gross Profit | $1.11B$1.07B | +4.2% |
| SG&A Expenses | $710.61M$665.91M | +6.7% |
| Operating Income | $401.78M$400.95M | +0.2% |
| Net Income | $305.05M$313.11M | −2.6% |
| EPS (Basic) | $6.72$6.51 | +3.2% |
| EPS (Diluted) | $6.70$6.47 | +3.6% |
| Shares Outstanding (Basic) | 45.36M48.13M | −5.7% |
| Shares Outstanding (Diluted) | 45.51M48.38M | −5.9% |
05—Questions
Frequently Asked Questions
How did Ulta Beauty perform in the first quarter of fiscal 2025?
Net sales increased $122.5 million, or 4.5%, to $2.85 billion, driven by a 2.9% rise in comparable sales and new store contribution. Operating income was roughly flat at $401.8 million, while net income declined to $305.1 million from $313.1 million.
Why did net income decline despite higher sales?
The filing attributes the decrease primarily to a $44.7 million increase in SG&A expenses, a $4.9 million increase in income tax expense, and a $3.4 million decrease in interest income, net. These were partially offset by a $44.4 million increase in gross profit.
How much did the company return to shareholders this quarter?
The company repurchased 986,733 shares under its publicly announced program for a total cost of $362.1 million, including excise tax. As of May 3, 2025, $2.3 billion remained available under the October 2024 $3.0 billion authorization.
Is the company carrying debt or facing covenant issues?
No. There were no borrowings outstanding under the credit facility as of May 3, 2025, and the company stated it was in compliance with all terms and covenants of the Loan Agreement. The facility matures March 13, 2029.
What macroeconomic risks does management highlight?
Management cited persistent inflationary and macroeconomic pressures, including existing and potential tariffs, which it believes could contribute to lower sales trends throughout fiscal 2025 and could affect its ability to maintain historical profitability levels.
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