Net Sales of $3.2 Billion Compared to $2.7 Billion in the Year-Ago Quarter
Comparable Sales Increased 15.6%
Net Income of $340.8 Million or $6.68 Per Diluted Share
BOLINGBROOK, Ill.--(BUSINESS WIRE)-- Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period (“fourth quarter”) and fifty-two-week period (“fiscal year”) ended January 28, 2023 compared to the same periods ended January 29, 2022.
| 13 Weeks Ended |
| 52 Weeks Ended | ||||||||||||||||
|
| January 28, |
| January 29, |
| January 30, |
|
| January 28, |
| January 29, |
| January 30, | ||||||
(Dollars in millions, except per share data) |
| 2023 |
| 2022 |
| 2021 |
|
| 2023 |
| 2022 |
| 2021 | ||||||
Net sales |
| $ | 3,226.8 |
| $ | 2,729.4 |
| $ | 2,198.7 |
|
| $ | 10,208.6 |
| $ | 8,630.9 |
| $ | 6,152.0 |
Comparable sales |
|
| 15.6% |
|
| 21.4% |
|
| (4.8%) |
|
|
| 15.6% |
|
| 37.9% |
|
| (17.9%) |
Gross profit (as a percentage of net sales) |
|
| 37.6% |
|
| 37.6% |
|
| 35.1% |
|
|
| 39.6% |
|
| 39.0% |
|
| 31.7% |
Selling, general and administrative expenses |
| $ | 762.7 |
| $ | 650.0 |
| $ | 514.1 |
|
| $ | 2,395.3 |
| $ | 2,061.5 |
| $ | 1,583.0 |
Operating income (as a percentage of net sales) |
|
| 13.9% |
|
| 13.8% |
|
| 10.2% |
|
|
| 16.1% |
|
| 15.0% |
|
| 3.9% |
Diluted earnings per share |
| $ | 6.68 |
| $ | 5.41 |
| $ | 3.03 |
|
| $ | 24.01 |
| $ | 17.98 |
| $ | 3.11 |
New store openings, net |
|
| 12 |
|
| 6 |
|
| 2 |
|
|
| 47 |
|
| 44 |
|
| 10 |
“Ulta Beauty’s strong fourth quarter results punctuate an exceptional year with record sales, profitability, and member growth, reflecting robust demand and best-in-class execution,” said Dave Kimbell, chief executive officer. “For the first time in our 33-year history, Ulta Beauty’s annual revenue surpassed ten billion dollars, our annual net income exceeded one billion dollars, and we exceeded 40 million Ultamate Rewards members. These milestone achievements demonstrate the power of Ulta Beauty’s highly differentiated model, the health of the growing beauty category, and our winning culture and outstanding teams.”
Kimbell continued, “As we move into fiscal 2023, we remain optimistic about the strength and resiliency of the beauty category, and I am excited about the opportunities ahead to continue to expand our leadership position, capture market share gains, and drive long term value for all our stakeholders.”
For the Fourth Quarter of Fiscal 2022
For the Full Year of Fiscal 2022
Balance Sheet
Cash and cash equivalents at the end of the fourth quarter of fiscal 2022 were $737.9 million.
Merchandise inventories, net at the end of the fourth quarter of fiscal 2022 totaled $1.6 billion compared to $1.5 billion at the end of the fourth quarter of fiscal 2021. The $104.2 million increase was primarily due to the opening of 47 new stores since January 29, 2022, inventory to support new brand launches and brand expansions, and inventory cost increases.
Share Repurchase Program
During the fourth quarter of fiscal 2022, the Company repurchased 722,457 shares of its common stock at a cost of $328.1 million. During fiscal 2022, the Company repurchased 2.2 million shares of its common stock at a cost of $900.0 million. As of January 28, 2023, $1.1 billion remained available under the $2.0 billion share repurchase program announced in March 2022.
Store Update
Real estate activity in the fourth quarter of fiscal 2022 included 12 new stores located in Garden Grove, CA; Glendale, AZ; Hartsdale, NY; Hollister, CA; Indianapolis, IN; Liverpool, NY; Nanuet, NY; Oklahoma City, OK; Richmond, TX; Rock Springs, WY; Tullahoma, TN; and Woburn, MA. In addition, the Company relocated one store and remodeled 12 stores. During fiscal 2022, the Company opened 47 new stores, relocated 12 stores, and remodeled 20 stores.
At the end of the fourth quarter of fiscal 2022, the Company operated 1,355 stores totaling 14.2 million square feet.
Fiscal 2023 Outlook
For fiscal 2023, the Company plans to:
|
|
|
|
| FY23 Outlook | ||
Net sales |
|
| $10.95 billion to $11.05 billion |
Comparable sales |
|
| 4% to 5% |
New stores, net |
|
| 25-30 |
Remodel and relocation projects |
|
| 20-30 |
Operating margin |
|
| 14.7% to 15.0% |
Diluted earnings per share |
|
| $24.70 to $25.40 |
Share repurchases |
|
| approximately $900 million |
Effective tax rate |
|
| approximately 24.6% |
Capital expenditures |
|
| $400 million to $475 million |
Depreciation and amortization expense |
|
| $245 million to $250 million |
Conference Call Information
A conference call to discuss fourth quarter of fiscal 2022 results is scheduled for today, March 9, 2023, at 4:30 p.m. ET / 3:30 p.m. CT. Investors and analysts interested in participating in the call are invited to dial (877) 704-4453. The conference call will also be webcast live at https://ulta.com/investor. A replay of the webcast will remain available for 90 days. A replay of the conference call will be available until 11:59 p.m. ET on March 23, 2023 and can be accessed by dialing (844) 512‑2921 and entering conference ID number 13735500.
About Ulta Beauty
At Ulta Beauty (NASDAQ: ULTA), the possibilities are beautiful. Ulta Beauty is the largest U.S. beauty retailer and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products and salon services. In 1990, the Company reinvented the beauty retail experience by offering a new way to shop for beauty – bringing together All Things Beauty, All in One Place®. Today, Ulta Beauty operates 1,355 retail stores across 50 states and also distributes its products through its website, which includes a collection of tips, tutorials, and social content. For more information, visit www.ulta.com.
Forward‑Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect the company’s current views with respect to, among other things, future events and financial performance. These statements can be identified by the use of forward-looking words such as “outlook,” “believes,” “expects,” “plans,” “estimates,” “targets,” “strategies” or other comparable words. Any forward-looking statements contained in this press release are based upon the company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the company or any other person that the future plans, estimates, targets, strategies or expectations contemplated by the company will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation:
The company’s filings with the SEC are available at www.sec.gov. Except to the extent required by the federal securities laws, the Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Exhibit 1 | |||||||||||||
Ulta Beauty, Inc. Consolidated Statements of Income (In thousands, except per share data) | |||||||||||||
| |||||||||||||
|
| 13 Weeks Ended | |||||||||||
|
| January 28, |
| January 29, | |||||||||
|
| 2023 |
| 2022 | |||||||||
|
| (Unaudited) |
| (Unaudited) | |||||||||
Net sales |
| $ | 3,226,773 |
|
| 100.0 | % |
| $ | 2,729,388 |
| 100.0 | % |
Cost of sales |
|
| 2,014,270 |
|
| 62.4 | % |
|
| 1,702,059 |
| 62.4 | % |
Gross profit |
|
| 1,212,503 |
|
| 37.6 | % |
|
| 1,027,329 |
| 37.6 | % |
|
|
|
|
|
|
|
|
|
|
| |||
Selling, general and administrative expenses |
|
| 762,706 |
|
| 23.6 | % |
|
| 649,968 |
| 23.8 | % |
Pre-opening expenses |
|
| 2,179 |
|
| 0.1 | % |
|
| 1,739 |
| 0.1 | % |
Operating income |
|
| 447,618 |
|
| 13.9 | % |
|
| 375,622 |
| 13.8 | % |
Interest (income) expense, net |
|
| (4,378 | ) |
| (0.1 | %) |
|
| 467 |
| 0.1 | % |
Income before income taxes |
|
| 451,996 |
|
| 14.0 | % |
|
| 375,155 |
| 13.7 | % |
Income tax expense |
|
| 111,245 |
|
| 3.4 | % |
|
| 85,789 |
| 3.1 | % |
Net income |
| $ | 340,751 |
|
| 10.6 | % |
| $ | 289,366 |
| 10.6 | % |
|
|
|
|
|
|
|
|
|
|
| |||
Net income per common share: |
|
|
|
|
|
|
|
|
|
| |||
Basic |
| $ | 6.73 |
|
|
|
| $ | 5.44 |
|
| ||
Diluted |
| $ | 6.68 |
|
|
|
| $ | 5.41 |
|
| ||
|
|
|
|
|
|
|
|
|
|
| |||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
| |||
Basic |
|
| 50,624 |
|
|
|
|
| 53,163 |
|
| ||
Diluted |
|
| 50,976 |
|
|
|
|
| 53,519 |
|
|
Exhibit 2 | |||||||||||||
Ulta Beauty, Inc. Consolidated Statements of Income (In thousands, except per share data) | |||||||||||||
|
| 52 Weeks Ended | |||||||||||
|
| January 28, |
| January 29, | |||||||||
|
| 2023 |
| 2022 | |||||||||
|
| (Unaudited) |
|
| |||||||||
Net sales |
| $ | 10,208,580 |
|
| 100.0 | % |
| $ | 8,630,889 |
| 100.0 | % |
Cost of sales |
|
| 6,164,070 |
|
| 60.4 | % |
|
| 5,262,335 |
| 61.0 | % |
Gross profit |
|
| 4,044,510 |
|
| 39.6 | % |
|
| 3,368,554 |
| 39.0 | % |
|
|
|
|
|
|
|
|
|
|
| |||
Selling, general and administrative expenses |
|
| 2,395,299 |
|
| 23.5 | % |
|
| 2,061,545 |
| 23.9 | % |
Pre-opening expenses |
|
| 10,601 |
|
| 0.1 | % |
|
| 9,517 |
| 0.1 | % |
Operating income |
|
| 1,638,610 |
|
| 16.1 | % |
|
| 1,297,492 |
| 15.0 | % |
Interest (income) expense, net |
|
| (4,934 | ) |
| 0.0 | % |
|
| 1,663 |
| 0.0 | % |
Income before income taxes |
|
| 1,643,544 |
|
| 16.1 | % |
|
| 1,295,829 |
| 15.0 | % |
Income tax expense |
|
| 401,136 |
|
| 3.9 | % |
|
| 309,992 |
| 3.6 | % |
Net income |
| $ | 1,242,408 |
|
| 12.2 | % |
| $ | 985,837 |
| 11.4 | % |
|
|
|
|
|
|
|
|
|
|
| |||
Net income per common share: |
|
|
|
|
|
|
|
|
|
| |||
Basic |
| $ | 24.17 |
|
|
|
| $ | 18.09 |
|
| ||
Diluted |
| $ | 24.01 |
|
|
|
| $ | 17.98 |
|
| ||
|
|
|
|
|
|
|
|
|
|
| |||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
| |||
Basic |
|
| 51,403 |
|
|
|
|
| 54,482 |
|
| ||
Diluted |
|
| 51,738 |
|
|
|
|
| 54,841 |
|
|
Exhibit 3 | |||||||
Ulta Beauty, Inc. Condensed Consolidated Balance Sheets (In thousands) | |||||||
|
| January 28, |
| January 29, |
| ||
|
| 2023 |
| 2022 |
| ||
|
| (Unaudited) |
|
|
|
| |
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 737,877 |
| $ | 431,560 |
|
Receivables, net |
|
| 199,422 |
|
| 233,682 |
|
Merchandise inventories, net |
|
| 1,603,451 |
|
| 1,499,218 |
|
Prepaid expenses and other current assets |
|
| 130,246 |
|
| 110,814 |
|
Prepaid income taxes |
|
| 38,308 |
|
| 5,909 |
|
Total current assets |
|
| 2,709,304 |
|
| 2,281,183 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
| 1,009,273 |
|
| 914,476 |
|
Operating lease assets |
|
| 1,561,263 |
|
| 1,482,256 |
|
Goodwill |
|
| 10,870 |
|
| 10,870 |
|
Other intangible assets, net |
|
| 1,312 |
|
| 1,538 |
|
Deferred compensation plan assets |
|
| 35,382 |
|
| 38,409 |
|
Other long-term assets |
|
| 43,007 |
|
| 35,647 |
|
Total assets |
| $ | 5,370,411 |
| $ | 4,764,379 |
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
| $ | 559,527 |
| $ | 552,730 |
|
Accrued liabilities |
|
| 444,278 |
|
| 364,797 |
|
Deferred revenue |
|
| 394,677 |
|
| 353,579 |
|
Current operating lease liabilities |
|
| 283,293 |
|
| 274,118 |
|
Accrued income taxes |
|
| — |
|
| 12,786 |
|
Total current liabilities |
|
| 1,681,775 |
|
| 1,558,010 |
|
|
|
|
|
|
|
|
|
Non-current operating lease liabilities |
|
| 1,619,883 |
|
| 1,572,638 |
|
Deferred income taxes |
|
| 55,346 |
|
| 39,693 |
|
Other long-term liabilities |
|
| 53,596 |
|
| 58,665 |
|
Total liabilities |
|
| 3,410,600 |
|
| 3,229,006 |
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
| 1,959,811 |
|
| 1,535,373 |
|
Total liabilities and stockholders’ equity |
| $ | 5,370,411 |
| $ | 4,764,379 |
|
Exhibit 4 | ||||||||
Ulta Beauty, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) | ||||||||
|
| 52 Weeks Ended | ||||||
|
| January 28, |
| January 29, | ||||
|
| 2023 |
| 2022 | ||||
|
| (Unaudited) |
|
| ||||
Operating activities |
|
|
|
|
|
| ||
Net income |
| $ | 1,242,408 |
|
| $ | 985,837 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
| ||
Depreciation and amortization |
|
| 241,372 |
|
|
| 268,460 |
|
Non-cash lease expense |
|
| 301,912 |
|
|
| 276,229 |
|
Deferred income taxes |
|
| 15,653 |
|
|
| (25,666 | ) |
Stock-based compensation expense |
|
| 43,044 |
|
|
| 47,259 |
|
Loss on disposal of property and equipment |
|
| 6,688 |
|
|
| 5,358 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
| ||
Receivables |
|
| 34,260 |
|
|
| (40,573 | ) |
Merchandise inventories |
|
| (104,233 | ) |
|
| (331,003 | ) |
Prepaid expenses and other current assets |
|
| (19,432 | ) |
|
| (3,412 | ) |
Income taxes |
|
| (45,182 | ) |
|
| (35,652 | ) |
Accounts payable |
|
| 8,309 |
|
|
| 66,156 |
|
Accrued liabilities |
|
| 48,249 |
|
|
| 58,598 |
|
Deferred revenue |
|
| 41,098 |
|
|
| 79,196 |
|
Operating lease liabilities |
|
| (324,500 | ) |
|
| (303,914 | ) |
Other assets and liabilities |
|
| (7,731 | ) |
|
| 12,392 |
|
Net cash provided by operating activities |
|
| 1,481,915 |
|
|
| 1,059,265 |
|
|
|
|
|
|
|
| ||
Investing activities |
|
|
|
|
|
| ||
Capital expenditures |
|
| (312,126 | ) |
|
| (172,187 | ) |
Other investments |
|
| (2,458 | ) |
|
| (4,297 | ) |
Net cash used in investing activities |
|
| (314,584 | ) |
|
| (176,484 | ) |
|
|
|
|
|
|
| ||
Financing activities |
|
|
|
|
|
| ||
Repurchase of common shares |
|
| (900,033 | ) |
|
| (1,521,925 | ) |
Stock options exercised |
|
| 46,011 |
|
|
| 40,386 |
|
Purchase of treasury shares |
|
| (6,992 | ) |
|
| (15,677 | ) |
Net cash used in financing activities |
|
| (861,014 | ) |
|
| (1,497,216 | ) |
|
|
|
|
|
|
| ||
Effect of exchange rate changes on cash and cash equivalents |
|
| — |
|
|
| (56 | ) |
Net increase (decrease) in cash and cash equivalents |
|
| 306,317 |
|
|
| (614,491 | ) |
Cash and cash equivalents at beginning of year |
|
| 431,560 |
|
|
| 1,046,051 |
|
Cash and cash equivalents at end of year |
| $ | 737,877 |
|
| $ | 431,560 |
|
Exhibit 5 | ||||||||
Ulta Beauty, Inc. Store Update | ||||||||
| ||||||||
|
| Total stores open |
| Number of stores |
| Number of stores |
| Total stores |
|
| at beginning of the |
| opened during the |
| closed during the |
| open at |
Fiscal 2022 |
| quarter |
| quarter |
| quarter |
| end of the quarter |
1st Quarter |
| 1,308 |
| 10 |
| 0 |
| 1,318 |
2nd Quarter |
| 1,318 |
| 7 |
| 0 |
| 1,325 |
3rd Quarter |
| 1,325 |
| 18 |
| 0 |
| 1,343 |
4th Quarter |
| 1,343 |
| 12 |
| 0 |
| 1,355 |
|
|
|
|
|
|
|
|
|
|
|
|
| Gross square feet for |
|
|
|
|
|
| Total gross square |
| stores opened or |
| Gross square feet for |
| Total gross square |
|
| feet at beginning of |
| expanded during the |
| stores closed |
| feet at end of the |
Fiscal 2022 |
| the quarter |
| quarter |
| during the quarter |
| quarter |
1st Quarter |
| 13,770,438 |
| 90,905 |
| 0 |
| 13,861,343 |
2nd Quarter |
| 13,861,343 |
| 61,257 |
| 0 |
| 13,922,600 |
3rd Quarter |
| 13,922,600 |
| 151,730 |
| 0 |
| 14,074,330 |
4th Quarter |
| 14,074,330 |
| 126,073 |
| 0 |
| 14,200,403 |
Exhibit 6 | ||||
Ulta Beauty, Inc. Sales by Category | ||||
The following tables set forth the approximate percentage of net sales by primary category: | ||||
| ||||
|
| 13 Weeks Ended | ||
|
| January 28, |
| January 29, |
| 2023 |
| 2022 | |
Cosmetics |
| 40% |
| 41% |
Haircare products and styling tools |
| 20% |
| 20% |
Skincare |
| 16% |
| 15% |
Fragrance and bath |
| 18% |
| 18% |
Services |
| 3% |
| 3% |
Accessories and other |
| 3% |
| 3% |
|
| 100% |
| 100% |
|
|
|
|
|
|
| 52 Weeks Ended | ||
|
| January 28, |
| January 29, |
|
| 2023 |
| 2022 |
Cosmetics |
| 42% |
| 43% |
Haircare products and styling tools |
| 21% |
| 20% |
Skincare |
| 17% |
| 17% |
Fragrance and bath |
| 14% |
| 14% |
Services |
| 3% |
| 3% |
Accessories and other |
| 3% |
| 3% |
|
| 100% |
| 100% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230309005603/en/
Investor Contacts: Kiley Rawlins, CFA Vice President, Investor Relations krawlins@ulta.com
Media Contact: Eileen Ziesemer Vice President, Public Relations eziesemer@ulta.com (708) 305-4479
Source: Ulta Beauty, Inc.