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Ulta Beauty 8-K Report, Financial Results (Aug 29, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 29, 2024
Period End
August 29, 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 August 29, 2024. Cited figures are marked; the original filing is the authoritative source.

Ulta Beauty, Inc. reported results for the second quarter of fiscal 2024, the thirteen weeks ended August 3, 2024, in a press release furnished as Exhibit 99.1.

Net sales rose 0.9% to $2.6 billiona ($2,552.1 million) from $2.5 billion, driven mainly by new store contribution and growth in other revenue. However, comparable sales decreased 1.2% versus an 8.0% increase a year earlier, reflecting a 1.8% decrease in transactions and a 0.6% increase in average ticket. Net income fell to $252.6 million, or $5.30 per diluted share, from $300.1 million, or $6.02 per diluted share.

Management said second-quarter performance did not meet its expectations, primarily because of the comparable store sales decline. Gross margin contracted to 38.3% from 39.3%, reflecting lower merchandise margins and store fixed-cost deleverage. SG&A expenses rose to $644.8 millionb, or 25.3% of net sales, from 23.7%, driven by store payroll, corporate overhead tied to strategic investments, store expenses, and marketing.

Operating income declined to $329.2 millionc, or 12.9% of net sales, from $391.6 million. For the first six months, net sales were $5.3 billion and comparable sales rose 0.2%. Cash and cash equivalents were $414.0 million at quarter end, and inventories rose 10.1% to $2.0 billion.

The company lowered its fiscal 2024 outlook. Net sales are now expected at $11.0 billion to $11.2 billiond (previously $11.5 billion to $11.6 billion), comparable sales at (2%) to 0% (previously 2% to 3%), and diluted EPS at $22.60 to $23.50 (previously $25.20 to $26.00). The operating margin outlook was cut to 12.7% to 13.0% from 13.7% to 14.0%.

Management kept its share repurchase outlook of approximately $1 billion and its tax rate outlook of approximately 24%, and it reduced capital expenditure guidance to $400 million to $450 million. During the quarter the company repurchased 549,852 shares for $212.3 million, and $1.6 billion remained under its $2.0 billion repurchase program.

02—Key points

Key Highlights

  1. Net sales increased 0.9% to $2.6 billion ($2,552.1 million) versus $2.5 billion a year earlier, driven by new stores and other revenue growth.
  2. Comparable sales decreased 1.2% versus an 8.0% increase in the prior-year quarter, with transactions down 1.8% and average ticket up 0.6%.
  3. Gross margin fell to 38.3% from 39.3%, and operating margin fell to 12.9% from 15.5%.
  4. Diluted EPS was $5.30 versus $6.02, and net income was $252.6 million versus $300.1 million.
  5. Fiscal 2024 outlook was cut: net sales to $11.0-$11.2 billion, comparable sales to (2%)-0%, operating margin to 12.7%-13.0%, and diluted EPS to $22.60-$23.50.
  6. Capital expenditure guidance was lowered to $400-$450 million, while the approximately $1 billion share repurchase outlook was unchanged.
  7. Inventories rose 10.1% to $2.0 billion, supporting new brand launches, the Greer, SC market fulfillment center, and 49 net new stores.

03—Questions

Frequently Asked Questions

  1. Why did Ulta's second-quarter results fall short of expectations?

    Management said the shortfall was driven primarily by a decline in comparable store sales, with comparable sales down 1.2% after an 8.0% gain a year earlier. Gross margin also fell to 38.3% from 39.3%, due to lower merchandise margins and store fixed-cost deleverage, and SG&A rose to 25.3% of net sales from 23.7%.

  2. How much did Ulta lower its fiscal 2024 guidance?

    Net sales guidance moved to $11.0-$11.2 billion from $11.5-$11.6 billion, and comparable sales guidance moved to (2%) to 0% from 2% to 3%. Diluted EPS guidance moved to $22.60-$23.50 from $25.20-$26.00, and operating margin guidance moved to 12.7%-13.0% from 13.7%-14.0%.

  3. What did Ulta do with its capital in the quarter?

    Ulta repurchased 549,852 shares for $212.3 million in the second quarter and 1.1 million shares for $497.5 million in the first six months. As of August 3, 2024, $1.6 billion remained under the $2.0 billion program announced in March 2024, and the company kept its approximately $1 billion repurchase outlook for the year.

  4. How is Ulta's balance sheet positioned at quarter end?

    Cash and cash equivalents were $414.0 million at August 3, 2024. Merchandise inventories, net, rose 10.1% to $2.0 billion from $1.8 billion a year earlier, which the company attributed to new brand launches, the Greer, SC market fulfillment center, and 49 net new stores.

04—Continue

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