Ulta Beauty (ULTA) investor relations material

Executive summary

• Net sales rose 12.9% year-over-year to $2.9 billion in Q3, driven by higher comparable sales, the Space NK acquisition, and new store openings.

• Comparable sales increased 6.3%, with a 3.8% rise in average ticket and 2.4% more transactions, supported by both in-store and e-commerce growth.

• Gross profit margin improved to 40.4% from 39.7% due to lower inventory shrink and higher merchandise margin.

• Net income for Q3 was $230.9 million, with diluted EPS flat at $5.14, down from $242.2 million last year due to higher SG&A and interest expenses.

• Fiscal 2025 guidance was raised, reflecting continued momentum and strong performance.

Financial highlights

• Q3 net sales: $2.86B (up from $2.53B); nine-month net sales: $8.49B (up from $7.81B).

• Q3 gross profit: $1.16B (40.4% margin); nine-month gross profit: $3.36B (39.6% margin).

• Q3 operating income: $309.4M (10.8% margin); nine-month operating income: $1.06B (12.4% margin).

• SG&A expenses increased 23.3% to $841 million in Q3, mainly from higher incentive compensation, Space NK impact, and strategic investments.

• Cash and cash equivalents at Q3 end: $204.9M; short-term debt at $551.7M.

Outlook and guidance

• Fiscal 2025 net sales guidance raised to approximately $12.3B, with comparable sales growth outlook increased to 4.4–4.7%.

• Operating margin expected at 12.3–12.4%; gross margin expected to be roughly flat.

• Diluted EPS guidance raised to $25.20–$25.50.

• Q4 comp sales growth expected between 2.5–3.5%, with operating margin of 12–12.3% and EPS of $7.61–$7.90.

• Ongoing inflation and macroeconomic pressures expected to impact sales trends and profitability.