Net Sales of $3.6 Billion Compared to $3.2 Billion in the Year-Ago Quarter
Comparable Sales Increased 2.5%
Net Income of $394.4 Million or $8.08 Per Diluted Share
BOLINGBROOK, Ill.--(BUSINESS WIRE)-- Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the fourteen-week period (“fourth quarter”) and fifty-three-week period (“fiscal year”) ended February 3, 2024, both of which contain one extra week (“53rd week”) versus the comparable thirteen-week and fifty-two-week periods ended January 28, 2023.
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| 14 Weeks Ended |
| 13 Weeks Ended |
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| 53 Weeks Ended |
| 52 Weeks Ended | ||||
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| February 3, |
| January 28, |
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| February 3, |
| January 28, | ||||
(Dollars in millions, except per share data) | 2024 |
| 2023 |
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| 2024 |
| 2023 | |||||
Net sales |
| $ | 3,554.3 |
| $ | 3,226.8 |
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| $ | 11,207.3 |
| $ | 10,208.6 |
Comparable sales (1) |
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| 2.5% |
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| 15.6% |
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| 5.7% |
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| 15.6% |
Gross profit (as a percentage of net sales) |
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| 37.7% |
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| 37.6% |
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| 39.1% |
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| 39.6% |
Selling, general and administrative expenses |
| $ | 820.4 |
| $ | 762.7 |
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| $ | 2,694.6 |
| $ | 2,395.3 |
Operating income (as a percentage of net sales) |
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| 14.5% |
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| 13.9% |
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| 15.0% |
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| 16.1% |
Diluted earnings per share |
| $ | 8.08 |
| $ | 6.68 |
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| $ | 26.03 |
| $ | 24.01 |
New store openings, net |
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| 11 |
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| 12 |
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| 30 |
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| 47 |
(1) | Comparable sales are based on a comparable number of weeks from the prior year. |
“We closed out a strong 2023 with better-than-expected fourth quarter financial performance. Our compelling holiday plans and thoughtfully curated assortment resonated with our guests and delivered healthy traffic, record brand awareness, and strong member growth. I am proud of how our teams drove these results while making meaningful progress on our multi-year, transformational investment agenda to enable new capabilities for future growth,” said Dave Kimbell, chief executive officer. “We enter 2024 well-positioned to drive strong top and bottom-line growth, build on our foundational capabilities, and unlock further advantages of our differentiated model. While we are mindful the near-term macro environment remains dynamic, we are optimistic about the resiliency of the beauty category, energized by the growth opportunities ahead of us, and confident in our ability to deliver for our guests and our shareholders.”
Kimbell continued, “International expansion represents an incremental, long-term opportunity for Ulta Beauty to extend our reach and leverage our differentiated value proposition. We have evaluated various operating models and partners, and geographies, and we are excited to announce the formation of a joint venture with Axo, a highly experienced operator of global brands, to launch and operate Ulta Beauty in Mexico in 2025.”
Fourth Quarter of Fiscal 2023 Compared to Fourth Quarter of Fiscal 2022
Full Year of Fiscal 2023 Compared to Full Year of Fiscal 2022
Balance Sheet
Cash and cash equivalents at the end of the fourth quarter of fiscal 2023 totaled $766.6 million.
Merchandise inventories, net at the end of the fourth quarter of fiscal 2023 increased 8.6% to $1.7 billion compared to $1.6 billion at the end of the fourth quarter of fiscal 2022. The increase was primarily due to inventory to support new brand launches, 30 net new stores, increase in distribution center inventory primarily due to the opening of the new market fulfillment center in Greer, SC, and product cost increases.
As previously announced, during the third quarter of fiscal 2023, the Company borrowed $195.4 million on its revolving credit facility to support ongoing capital allocation priorities, including share repurchases and capital expenditures, and merchandise inventory growth. During the fourth quarter of fiscal 2023, the Company repaid all amounts borrowed, together with interest due. At the end of the fourth quarter of fiscal 2023, the Company had no borrowings outstanding under the revolving credit facility.
On March 13, 2024, the Company entered into an Amendment No. 3 to its Second Amended and Restated Loan Agreement, which amended and restated the existing agreement. The new loan agreement extends the maturity of the facility to March 13, 2029, provides maximum revolving loans equal to the lesser of $800 million or a percentage of eligible owned inventory, contains a $50 million sub-facility for letters of credit and allows the Company to increase the revolving facility by an additional $200 million.
Share Repurchase Program
During the fourth quarter of fiscal 2023, the Company repurchased 352,005 shares of its common stock at a cost of $159.5 million. During fiscal 2023, the Company repurchased 2.2 million shares of its common stock at a cost of $1.0 billion. As of February 3, 2024, $99.9 million remained available under the $2.0 billion share repurchase program announced in March 2022.
Since 2014, Ulta Beauty has returned $5.8 billion to shareholders through its share repurchase program, while continuing to make strategic growth investments.
On March 12, 2024, the Company’s board of directors approved a new share repurchase authorization of $2.0 billion, which replaces the prior authorization implemented in March 2022. Under the new program, as under the previous program, the Company may repurchase outstanding shares of the Company's common stock from time to time through accelerated share repurchases, privately negotiated transactions, or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934. The new program has no expiration date but may be terminated by the Board at any time.
Store Update
Real estate activity in the fourth quarter of fiscal 2023 included 13 new stores located in Anaheim, CA; Brea, CA; Brenham, TX; Dartmouth, MA; Glassboro, NJ; Goldsboro, NC; Hialeah, FL; Jacksonville, FL; Land O'Lakes, FL; Missouri City, TX; Orange, CT; Orlando, FL; and Venice, FL. In addition, the Company relocated two stores, remodeled two stores, and closed two stores. During fiscal 2023, the Company opened 33 new stores, relocated seven stores, remodeled 18 stores, and closed three stores.
At the end of the fourth quarter of fiscal 2023, the Company operated 1,385 stores totaling 14.5 million square feet.
Fiscal 2024 Outlook
For fiscal 2024, the Company plans to:
| FY24 Outlook | ||
Net sales |
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| $11.7 billion to $11.8 billion |
Comparable sales |
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| 4% to 5% |
New stores, net |
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| 60-65 |
Remodel and relocation projects |
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| 40-45 |
Operating margin |
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| 14.0% to 14.3% |
Diluted earnings per share |
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| $26.20 to $27.00 |
Share repurchases |
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| approximately $1 billion |
Interest income |
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| approximately $11 million |
Effective tax rate |
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| approximately 24.3% |
Capital expenditures |
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| $415 million to $490 million |
Depreciation and amortization expense |
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| $275 million to $280 million |
Conference Call Information
A conference call to discuss fourth quarter of fiscal 2023 results is scheduled for today, March 14, 2024 at 4:30 p.m. ET / 3:30 p.m. CT. Investors and analysts who are interested in participating in the call are invited to dial (877) 704-4453. Participants may also listen to a real-time audio webcast of the conference call by visiting the Investor Relations section of the Company’s website located at https://www.ulta.com/investor. A replay will be made available online approximately two hours following the live call for a period of 30 days.
About Ulta Beauty
At Ulta Beauty (NASDAQ: ULTA), the possibilities are beautiful. Ulta Beauty is the largest specialty 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 1,385 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)
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| 14 Weeks Ended |
| 13 Weeks Ended | ||||||
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| February 3, |
| January 28, | ||||||
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| 2024 |
| 2023 | ||||||
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| (Unaudited) |
| (Unaudited) | ||||||
Net sales |
| $ | 3,554,298 |
| 100.0% |
| $ | 3,226,773 |
| 100.0% |
Cost of sales |
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| 2,213,734 |
| 62.3% |
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| 2,014,270 |
| 62.4% |
Gross profit |
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| 1,340,564 |
| 37.7% |
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| 1,212,503 |
| 37.6% |
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Selling, general and administrative expenses |
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| 820,360 |
| 23.1% |
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| 762,706 |
| 23.6% |
Pre-opening expenses |
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| 3,114 |
| 0.1% |
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| 2,179 |
| 0.1% |
Operating income |
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| 517,090 |
| 14.5% |
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| 447,618 |
| 13.9% |
Interest income, net |
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| (3,328) |
| (0.1%) |
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| (4,378) |
| (0.1%) |
Income before income taxes |
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| 520,418 |
| 14.6% |
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| 451,996 |
| 14.0% |
Income tax expense |
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| 126,049 |
| 3.5% |
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| 111,245 |
| 3.4% |
Net income |
| $ | 394,369 |
| 11.1% |
| $ | 340,751 |
| 10.6% |
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Net income per common share: |
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Basic |
| $ | 8.13 |
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| $ | 6.73 |
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Diluted |
| $ | 8.08 |
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| $ | 6.68 |
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Weighted average common shares outstanding: |
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Basic |
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| 48,500 |
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| 50,624 |
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Diluted |
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| 48,795 |
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| 50,976 |
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Exhibit 2
Ulta Beauty, Inc.Consolidated Statements of Income (In thousands, except per share data)
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| 53 Weeks Ended |
| 52 Weeks Ended | ||||||
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| February 3, |
| January 28, | ||||||
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| 2024 |
| 2023 | ||||||
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| (Unaudited) |
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Net sales |
| $ | 11,207,303 |
| 100.0% |
| $ | 10,208,580 |
| 100.0% |
Cost of sales |
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| 6,826,203 |
| 60.9% |
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| 6,164,070 |
| 60.4% |
Gross profit |
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| 4,381,100 |
| 39.1% |
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| 4,044,510 |
| 39.6% |
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Selling, general and administrative expenses |
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| 2,694,561 |
| 24.0% |
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| 2,395,299 |
| 23.5% |
Pre-opening expenses |
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| 8,510 |
| 0.1% |
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| 10,601 |
| 0.1% |
Operating income |
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| 1,678,029 |
| 15.0% |
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| 1,638,610 |
| 16.1% |
Interest income, net |
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| (17,622) |
| (0.2%) |
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| (4,934) |
| (0.0%) |
Income before income taxes |
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| 1,695,651 |
| 15.1% |
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| 1,643,544 |
| 16.1% |
Income tax expense |
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| 404,646 |
| 3.6% |
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| 401,136 |
| 3.9% |
Net income |
| $ | 1,291,005 |
| 11.5% |
| $ | 1,242,408 |
| 12.2% |
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Net income per common share: |
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Basic |
| $ | 26.18 |
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| $ | 24.17 |
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Diluted |
| $ | 26.03 |
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| $ | 24.01 |
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Weighted average common shares outstanding: |
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Basic |
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| 49,304 |
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| 51,403 |
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Diluted |
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| 49,596 |
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| 51,738 |
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Exhibit 3
Ulta Beauty, Inc.Condensed Consolidated Balance Sheets (In thousands)
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| February 3, |
| January 28, |
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| 2024 |
| 2023 |
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| (Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
| $ | 766,594 |
| $ | 737,877 |
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Receivables, net |
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| 207,939 |
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| 199,422 |
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Merchandise inventories, net |
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| 1,742,136 |
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| 1,603,451 |
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Prepaid expenses and other current assets |
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| 115,598 |
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| 130,246 |
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Prepaid income taxes |
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| 4,251 |
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| 38,308 |
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Total current assets |
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| 2,836,518 |
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| 2,709,304 |
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Property and equipment, net |
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| 1,182,335 |
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| 1,009,273 |
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Operating lease assets |
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| 1,574,530 |
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| 1,561,263 |
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Goodwill |
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| 10,870 |
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| 10,870 |
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Other intangible assets, net |
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| 510 |
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| 1,312 |
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Deferred compensation plan assets |
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| 43,516 |
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| 35,382 |
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Other long-term assets |
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| 58,732 |
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| 43,007 |
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Total assets |
| $ | 5,707,011 |
| $ | 5,370,411 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
| $ | 544,001 |
| $ | 559,527 |
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Accrued liabilities |
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| 382,468 |
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| 444,278 |
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Deferred revenue |
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| 436,591 |
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| 394,677 |
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Current operating lease liabilities |
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| 283,821 |
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| 283,293 |
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Accrued income taxes |
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| 11,310 |
|
| — |
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Total current liabilities |
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| 1,658,191 |
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| 1,681,775 |
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Non-current operating lease liabilities |
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| 1,627,271 |
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| 1,619,883 |
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Deferred income taxes |
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| 85,921 |
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| 55,346 |
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Other long-term liabilities |
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| 56,300 |
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| 53,596 |
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Total liabilities |
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| 3,427,683 |
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| 3,410,600 |
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Commitments and contingencies |
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Total stockholders’ equity |
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| 2,279,328 |
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| 1,959,811 |
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Total liabilities and stockholders’ equity |
| $ | 5,707,011 |
| $ | 5,370,411 |
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Exhibit 4
Ulta Beauty, Inc.Condensed Consolidated Statements of Cash Flows (In thousands)
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| 53 Weeks Ended |
| 52 Weeks Ended | ||
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| February 3, |
| January 28, | ||
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| 2024 |
| 2023 | ||
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| (Unaudited) |
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Operating activities |
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Net income |
| $ | 1,291,005 |
| $ | 1,242,408 |
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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| 243,840 |
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| 241,372 |
Non-cash lease expense |
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| 332,754 |
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| 301,912 |
Deferred income taxes |
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| 30,575 |
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| 15,653 |
Stock-based compensation expense |
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| 48,246 |
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| 43,044 |
Loss on disposal of property and equipment |
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| 11,419 |
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| 6,688 |
Change in operating assets and liabilities: |
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Receivables |
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| (8,517) |
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| 34,260 |
Merchandise inventories |
|
| (138,685) |
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| (104,233) |
Prepaid expenses and other current assets |
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| 14,648 |
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| (19,432) |
Income taxes |
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| 45,367 |
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| (45,182) |
Accounts payable |
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| (20,873) |
|
| 8,309 |
Accrued liabilities |
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| (62,238) |
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| 48,249 |
Deferred revenue |
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| 41,914 |
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| 41,098 |
Operating lease liabilities |
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| (338,105) |
|
| (324,500) |
Other assets and liabilities |
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| (15,084) |
|
| (7,731) |
Net cash provided by operating activities |
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| 1,476,266 |
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| 1,481,915 |
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Investing activities |
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Capital expenditures |
|
| (435,267) |
|
| (312,126) |
Other investments |
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| (6,158) |
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| (2,458) |
Net cash used in investing activities |
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| (441,425) |
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| (314,584) |
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Financing activities |
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Borrowings from credit facility |
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| 195,400 |
|
| — |
Payments on credit facility |
|
| (195,400) |
|
| — |
Repurchase of common shares |
|
| (995,738) |
|
| (900,033) |
Stock options exercised |
|
| 12,176 |
|
| 46,011 |
Purchase of treasury shares |
|
| (22,562) |
|
| (6,992) |
Net cash used in financing activities |
|
| (1,006,124) |
|
| (861,014) |
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Net increase in cash and cash equivalents |
|
| 28,717 |
|
| 306,317 |
Cash and cash equivalents at beginning of year |
|
| 737,877 |
|
| 431,560 |
Cash and cash equivalents at end of year |
| $ | 766,594 |
| $ | 737,877 |
Exhibit 5
Ulta Beauty, Inc.Store Update
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|
| Total stores open |
| Number of stores |
| Number of stores |
| Total stores |
|
| at beginning of the |
| opened during the |
| closed during the |
| open at |
Fiscal 2023 |
| quarter |
| quarter |
| quarter |
| end of the quarter |
1st Quarter |
| 1,355 |
| 5 |
| 1 |
| 1,359 |
2nd Quarter |
| 1,359 |
| 3 |
| 0 |
| 1,362 |
3rd Quarter |
| 1,362 |
| 12 |
| 0 |
| 1,374 |
4th Quarter |
| 1,374 |
| 13 |
| 2 |
| 1,385 |
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| Gross square feet for |
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|
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| 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 2023 |
| the quarter |
| quarter |
| during the quarter |
| quarter |
1st Quarter |
| 14,200,403 |
| 54,495 |
| 9,984 |
| 14,244,914 |
2nd Quarter |
| 14,244,914 |
| 27,530 |
| 0 |
| 14,272,444 |
3rd Quarter |
| 14,272,444 |
| 133,421 |
| 0 |
| 14,405,865 |
4th Quarter |
| 14,405,865 |
| 132,464 |
| 22,736 |
| 14,515,593 |
Exhibit 6
Ulta Beauty, Inc. Sales by Category
The following tables set forth the approximate percentage of net sales by primary category:
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|
| 14 Weeks Ended |
| 13 Weeks Ended |
|
| February 3, |
| January 28, |
| 2024 |
| 2023 | |
Cosmetics |
| 39% |
| 40% |
Skincare |
| 18% |
| 16% |
Haircare products and styling tools |
| 18% |
| 20% |
Fragrance and bath |
| 19% |
| 18% |
Services |
| 3% |
| 3% |
Accessories and other |
| 3% |
| 3% |
|
| 100% |
| 100% |
|
|
|
|
|
|
| 53 Weeks Ended |
| 52 Weeks Ended |
|
| February 3, |
| January 28, |
|
| 2024 |
| 2023 |
Cosmetics |
| 41% |
| 42% |
Skincare |
| 19% |
| 17% |
Haircare products and styling tools |
| 19% |
| 21% |
Fragrance and bath |
| 15% |
| 14% |
Services |
| 3% |
| 3% |
Accessories and other |
| 3% |
| 3% |
|
| 100% |
| 100% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314247150/en/
Investor Contact: Kiley Rawlins, CFA Vice President, Investor Relations krawlins@ulta.com
Media Contact: Crystal Carroll Senior Director, Public Relations ccarroll@ulta.com
Source: Ulta Beauty