Ulta Beauty, Inc. (NASDAQ:ULTA) Raymond James 2024 TMT & Consumer Conference December 11, 2024 10:40 AM ET Company Participants Dave Kimbell - CEO Paula Oyibo - CFO Conference Call Participants Olivia Tong - Raymond James Olivia Tong Okay. Well, thank you, everybody, for joining us at Raymond James' Consumer & TMT Conference. I'm Olivia Tong. I had the coverage of Beauty and HPC, and we're so excited to have Ulta with us today. Thank you for joining us. Dave, Paula, really appreciate it. We have Dave Kimbel ...

Ulta Beauty, Inc. (NASDAQ:ULTA) Q3 2024 Earnings Call Transcript December 5, 2024 4:30 PM ET Company Participants Kiley Rawlins - VP of IR Dave Kimbell - CEO Paula Oyibo - CFO Conference Call Participants Simeon Siegel - BMO Capital Markets Kelly Crago - Citi Korinne Wolfmeyer - Piper Sandler Anthony Chukumba - Loop Capital Markets Christopher Horvers - JPMorgan Chase & Company Emily Ghosh - Goldman Sachs Oliver Chen - TD Cowen Krisztina Katai - Deutsche Bank Operator Good afternoon, and welcome to Ulta Bea ...

Core Viewpoint - Ulta Beauty reported quarterly earnings of $5.14 per share, exceeding the Zacks Consensus Estimate of $4.47 per share, and showing a slight increase from $5.07 per share a year ago, resulting in an earnings surprise of 14.99% [1] Financial Performance - The company achieved revenues of $2.53 billion for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 1.68%, and reflecting a year-over-year increase from $2.49 billion [2] - Over the last four quarters, Ulta has exceeded consensus EPS estimates three times and has also topped consensus revenue estimates three times [2] Stock Performance and Outlook - Ulta shares have declined approximately 18.4% since the beginning of the year, contrasting with the S&P 500's gain of 27.6% [4] - The current consensus EPS estimate for the upcoming quarter is $6.84 on revenues of $3.4 billion, while for the current fiscal year, the estimate is $23.07 on revenues of $11.16 billion [8] Industry Context - The Zacks Industry Rank indicates that the Retail - Miscellaneous sector is currently in the bottom 30% of over 250 Zacks industries, suggesting potential challenges for stock performance [9]

Beauty products on the shelves at Ulta on State Street in Chicago on Feb. 4, 2015.Ulta Beauty on Thursday beat Wall Street's fiscal third-quarter expectations, fending off fears of fiercer competition and slowing demand for makeup and skincare.The retailer hiked its full-year outlook slightly to reflect the better-than-expected results. For the fiscal year, it said it now expects net sales to range from $11.1 billion to $11.2 billion, compared with its previous guidance for $11 billion to $11.2 billion.It s ...

Financial Performance - Net sales for the third quarter of fiscal 2024 were $2.53 billion, a 1.7% increase from $2.49 billion in the same quarter last year[5] - Comparable sales increased by 0.6%, compared to a 4.5% increase in the prior year, driven by a 0.5% increase in transactions and a 0.1% increase in average ticket[5] - Gross profit was $1.0 billion, with a gross profit margin of 39.7%, down from 39.9% in the previous year[6] - Operating income was $318.5 million, or 12.6% of net sales, compared to 13.1% in the prior year[6] - Net income for the third quarter was $242.2 million, compared to $249.5 million in the same quarter last year[6] - Net sales for the 39 weeks ended November 2, 2024, reached $7,808,035, a 2.0% increase from $7,653,005 for the same period last year[23] - Gross profit margin decreased to 39.1% from 39.7% year-over-year, with gross profit amounting to $3,053,601 compared to $3,040,536[23] - Operating income for the 39 weeks was $1,048,651, representing a decline to 13.4% of net sales from 15.2% in the previous year[23] - Net income decreased to $807,848, or 10.3% of net sales, down from $896,636, which was 11.7% of net sales last year[23] - Basic net income per share was $17.00, down from $18.08 year-over-year, while diluted net income per share was $16.93 compared to $17.99[23] Expenses and Liabilities - Selling, general and administrative expenses rose to $682.3 million, representing 27.0% of net sales, up from 26.6%[6] - Total liabilities increased to $3,629,477 from $3,566,466, with current liabilities rising to $1,816,407 from $1,836,939[26] Store Operations - The company opened 28 new stores in the third quarter, bringing the total to 1,437 stores[11] - Total stores increased from 1,385 at the beginning of Fiscal 2024 to 1,437 by the end of the third quarter, with a net addition of 52 stores during the year[31] - Total gross square feet increased from 14,515,593 at the beginning of Fiscal 2024 to 15,020,825 by the end of the third quarter, reflecting an increase of 505,232 square feet[31] - In the third quarter, 258,320 gross square feet were added from new or expanded stores, while 20,083 square feet were closed[31] Inventory and Cash Flow - Merchandise inventories increased by 1.9% to $2.4 billion, primarily due to the addition of 63 net new stores since the end of the previous fiscal year[8] - Total current assets increased to $2,954,862 from $2,792,040, with merchandise inventories rising to $2,365,186 from $2,321,306[26] - Cash and cash equivalents at the end of the period were $177,782, a decrease from $121,811 at the end of the previous year[28] - Net cash provided by operating activities was $302,041, down from $358,011 in the prior year[28] - Capital expenditures for the period were $300,536, slightly lower than $311,030 in the previous year[28] Shareholder Actions - The company repurchased 731,458 shares at a cost of $267.0 million during the third quarter, with $2.9 billion remaining under the share repurchase program[10] Sales Composition - For the week ended October 28, 2023, cosmetics accounted for 42% of net sales, while skincare represented 22%[34] - Haircare sales contributed 21% to net sales for the week ended October 28, 2023, showing a slight decrease from the previous year[34] - Fragrance and services maintained their contributions at 9% and 4% respectively for the week ended October 28, 2023[34] - The company reclassified certain sales departments to align with current year presentation, impacting the categorization of the bath category[34] Outlook - For fiscal 2024, the updated outlook for net sales is between $11.1 billion and $11.2 billion, with diluted earnings per share projected to be between $23.20 and $23.75[13]

Core Viewpoint - Ulta Beauty, Inc. is expected to report a decline in both revenue and earnings for the third quarter of fiscal 2024, with projected revenues of $2.48 billion, reflecting a 0.3% decrease year-over-year, and earnings per share estimated at $4.45, indicating a 12.2% decline from the previous year [1][3]. Group 1: Factors Influencing Results - Shifting consumer behavior towards value-driven spending and increased competition from new beauty distribution channels are eroding Ulta's market share [3][4]. - The U.S. beauty sales growth has slowed to just 3% in the first half of 2024, impacting Ulta significantly as consumers prioritize value over premium products amid inflation and economic uncertainties [4]. - The company's transition to a new Enterprise Resource Planning system has caused operational disruptions, and promotional efforts have not met expectations for in-store sales [3][4]. Group 2: Financial Projections - Comparable sales are projected to decline by 1.9% for the quarter under review [4]. - Soft merchandise margins and elevated selling, general and administrative (SG&A) costs are concerns, with SG&A expenses expected to increase by 5.3% for the third quarter, raising the rate to 27.9% [5]. Group 3: Positive Aspects - Ulta Beauty is focusing on strengthening its product assortment, enhancing digital experiences, and leveraging its loyalty program, which may aid in mitigating some challenges [6]. - Growth in the skincare category is noted, driven by rising consumer interest in self-care and the company's emphasis on innovation [6]. Group 4: Earnings Prediction - The current model does not predict an earnings beat for Ulta Beauty, as it holds a Zacks Rank of 3 and an Earnings ESP of 0.00% [7].

Wall Street analysts expect Ulta Beauty (ULTA) to post quarterly earnings of $4.45 per share in its upcoming report, which indicates a year-over-year decline of 12.2%. Revenues are expected to be $2.48 billion, down 0.3% from the year-ago quarter.The consensus EPS estimate for the quarter has undergone an upward revision of 0.3% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Before a ...

Key TakeawaysE.l.f. and Ulta Beauty prices fell Monday morning while the broader market rose, but then reversed their trajectory.Ulta drew more shoppers this Black Friday than it did last year, unlike other health and beauty stores, according to RetailNext and Placer.ai.Ulta is scheduled to report its latest quarterly results tomorrow afternoon. Cosmetic companies' stocks had a colorful morning Monday, with their shares moving in various directions as investors digested preliminary Black Friday data. Share ...

Ulta Beauty Inc (NASDAQ:ULTA) stock is leading the S&P 500 Index (SPX) today ahead of the cosmetics retailer's third-quarter results, which are due out after the market closes on Thursday, Dec. 5. e,l.f Beauty Inc's (NYSE:ELF) fiscal second-quarter report is not far behind, scheduled for release after the market closes on Friday, Dec. 6. Both events could have implications for sector peer Estee Lauder Companies Inc (NYSE:EL), making this an excellent time to check in with these three beauty industry giants. ...

Beating the market is my one and only objective. If I can't make a case for a stock to beat the S&P's historical return of 7-8% per year, I won't buy it. And wouldn't recommend you do either.I'm primarily a GARP investor with a strong focus on fundamentals. I cater to consumer discretionary stocks because these are within my circle of competence. I cover the occasional tech stock if I understand the business and/or am a paying customer.I love researching companies, analyzing financial statements, listening ...