Ulta Beauty(ULTA) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the first quarter of fiscal 2024 reached $2,725.8 million, an increase of 3.5% compared to $2,634.3 million in the same period last year[85]. - Comparable sales increased by 1.6% in the first quarter of fiscal 2024, a significant decrease from the 9.3% growth in the prior year[85]. - Gross profit margin decreased to 39.2% in Q1 2024 from 40.0% in Q1 2023, reflecting increased cost of sales as a percentage of net sales[86]. - Operating income for the first quarter was $400.9 million, down from $442.1 million in the same quarter last year, resulting in an operating income margin of 14.7%[85]. - Net income for the first quarter was $313.1 million, compared to $347.1 million in the same period last year, representing a net income margin of 11.5%[85]. - Net income decreased to $313.1 million for the 13 weeks ended May 4, 2024, down from $347.1 million in the prior year[93]. - Interest income, net decreased to $6.9 million for the 13 weeks ended May 4, 2024, compared to $7.3 million in the prior year[91]. - The effective tax rate increased to 23.2% for the 13 weeks ended May 4, 2024, compared to 22.8% for the same period in 2023[92]. Expenses and Costs - Selling, general and administrative expenses increased to $665.9 million, or 24.4% of net sales, compared to 23.2% in the prior year[86]. - Selling, general and administrative (SG&A) expenses increased by $53.8 million or 8.8%, amounting to $665.9 million, with SG&A as a percentage of net sales rising to 24.4%[89]. - Gross profit rose by $14.9 million or 1.4%, totaling $1.07 billion, with gross profit margin decreasing to 39.2% from 40.0% year-over-year[88]. Store Expansion and Inventory - The number of stores at the end of the first quarter increased to 1,395, up from 1,359 stores a year ago[85]. - The company opened 12 new stores during the 13 weeks ended May 4, 2024, compared to 5 new stores opened in the same period of the previous year[103]. - Merchandise inventories increased by $154.8 million or 8.8%, totaling $1.9 billion as of May 4, 2024[102]. Cash and Shareholder Returns - Cash and cash equivalents were $524.6 million as of May 4, 2024, down from $636.4 million a year earlier[94]. - The company repurchased 588,004 shares at a total cost of $287.4 million during the 13 weeks ended May 4, 2024[112]. Strategic Focus and Market Conditions - The company continues to focus on expanding its omnichannel capabilities and enhancing customer experiences to drive future growth[68]. - Inflation and macroeconomic conditions are expected to impact consumer spending and could affect future sales performance[72]. - The company aims to optimize its real estate portfolio and expand merchandise margins to support long-term growth strategies[70].