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Ulta Beauty 8-K Report, Financial Results (May 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 30, 2024
Period End
May 30, 2024
Security
ULTA
In the record · 2016–202610-K1110-Q328-K92

ULTA filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 92 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Aug ’17Aug ’17
  2. Leadership change8-K · Feb ’22Feb ’22
  3. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed May 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Ulta Beauty, Inc. furnished a press release (Exhibit 99.1) announcing consolidated results for the first quarter ended May 4, 2024.

Net sales were $2.7 billiona ($2,725.8 million) compared with $2.6 billion in the year-ago quarter, with comparable sales increasing 1.6%, driven by a 1.3% increase in transactions and a 0.3% increase in average ticket. Net income was $313.1 million, or $6.47 per diluted share, versus $347.1 million, or $6.88 per diluted share, a year earlier. Operating income was $400.9 million (14.7% of net sales) versus $442.1 million (16.8%), with gross profit margin falling to 39.2% from 40.0% on lower merchandise margins and higher inventory shrink, and SG&A rising to 24.4% of net sales from 23.2%, primarily from higher corporate overhead for strategic investments.

The company updated its fiscal 2024 outlook, lowering net sales guidance to $11.5 billion to $11.6 billionb (from $11.7 billion to $11.8 billion), comparable sales guidance to 2% to 3% (from 4% to 5%), operating margin to 13.7% to 14.0% (from 14.0% to 14.3%), and diluted EPS to $25.20 to $26.00 (from $26.20 to $27.00). Management stated it anticipates the first-quarter dynamics will continue for the balance of the year. Other highlights include cash and cash equivalents of $524.6 million, merchandise inventories of $1.9 billion, the repurchase of 588,004 shares for $285.1 million, and $1.8 billion remaining under the $2.0 billion repurchase program announced in March 2024.

The filing also reports that 12 new stores were opened, two closed and one relocated during the quarter, bringing the store count to 1,395 (14.6 million square feet). The filing lists forward-looking risk factors, including macroeconomic conditions, consumer spending, and inventory management, and references the Form 10-K for the fiscal year ended February 3, 2024.

02—Key points

Key Highlights

  1. Net sales rose 3.5% to $2.7 billion ($2,725.8 million) and comparable sales increased 1.6%, driven by 1.3% higher transactions and 0.3% higher average ticket.
  2. Net income declined to $313.1 million ($6.47 diluted EPS) from $347.1 million ($6.88 diluted EPS); EPS included a $0.10 stock-based compensation tax benefit versus $0.14 a year earlier.
  3. Operating margin compressed to 14.7% from 16.8%, with gross margin down to 39.2% from 40.0% and SG&A rising to 24.4% of net sales from 23.2%.
  4. Fiscal 2024 guidance was lowered: net sales to $11.5-$11.6 billion, comparable sales to 2%-3% (from 4%-5%), operating margin to 13.7%-14.0%, and diluted EPS to $25.20-$26.00.
  5. Management expects the first-quarter operating dynamics to continue for the rest of the year, while stating confidence in the model and the resilience of the beauty category.
  6. Merchandise inventories rose to $1.9 billion, and the company repurchased $285.1 million of stock, leaving $1.8 billion available under the $2.0 billion program.
  7. The company ended the quarter with 1,395 stores after opening 12 and closing two.

03—Questions

Frequently Asked Questions

  1. Why did Ulta lower its fiscal 2024 guidance?

    CEO Dave Kimbell said the company adjusted annual guidance because it anticipates the dynamics faced in the first quarter will continue for the balance of the year. The filing cites macroeconomic conditions, inflation, elevated interest rates, and recessionary concerns among its risk factors.

  2. What drove the decline in profitability in the first quarter?

    Gross profit margin decreased to 39.2% from 40.0%, primarily due to lower merchandise margins and higher inventory shrink. SG&A rose to 24.4% of net sales from 23.2%, mainly from higher corporate overhead for strategic investments, higher store payroll and benefits, and higher store expenses.

  3. How much capital is available for share repurchases?

    During the first quarter the company repurchased 588,004 shares for $285.1 million. As of May 4, 2024, $1.8 billion remained available under the $2.0 billion share repurchase program announced in March 2024. The fiscal 2024 outlook for share repurchases is unchanged at approximately $1 billion.

  4. How much cash did Ulta have at the end of the quarter?

    Cash and cash equivalents totaled $524.6 million at the end of the first quarter of fiscal 2024, compared with $766.6 million at the end of fiscal 2023 (February 3, 2024) and $636.4 million a year earlier (April 29, 2023).

  5. Did Ulta change its store growth plans?

    No. The fiscal 2024 outlook for new stores, net (60-65) and remodel and relocation projects (40-45) is unchanged. In the quarter, the company opened 12 stores, closed two, and relocated one, ending with 1,395 stores.

04—Continue

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