Ulta Beauty Q4 Earnings & Sales Top Estimates, Stock Rises 6.5%

Core Insights - Ulta Beauty, Inc. (ULTA) experienced a 6.5% increase in share price after reporting strong fourth-quarter fiscal 2024 results, with both top and bottom lines exceeding Zacks Consensus Estimates [1][2] Financial Performance - The company reported fourth-quarter earnings per share of $8.46, surpassing the Zacks Consensus Estimate of $7.10, and an increase from $8.08 per share in the previous year [2] - Net sales declined 1.9% year over year to $3,487.6 million, primarily due to an additional sales week in fiscal 2023, but still exceeded the Zacks Consensus Estimate of $3,463.7 million [3] - Comparable sales rose 1.5%, driven by a 3% increase in average ticket, although transaction volume decreased by 1.4% [4] Profitability Metrics - Gross profit totaled $1,333.7 million, down from $1,340.6 million, but improved as a percentage of net sales to 38.2% from 37.7% due to reduced inventory shrink and improved merchandise margins [5] - Selling, general and administrative (SG&A) expenses decreased to $815.6 million from $820.4 million, but as a percentage of net sales, SG&A expenses increased to 23.4% from 23.1% [6] - Operating income was $516.3 million compared to $517.1 million in the same quarter last year, with operating income as a percentage of net sales increasing to 14.8% from 14.5% [6] Financial Health - The company ended the quarter with cash and cash equivalents of $703.2 million and net merchandise inventories of $2 billion [7] - Stockholders' equity was reported at $2,488.4 million, with net cash provided by operating activities amounting to $1,338.7 million for the 52 weeks ended February 1, 2025 [7] Share Repurchase and Capital Expenditures - Ulta Beauty repurchased 620,053 shares for $249.5 million in the quarter, with $2.7 billion remaining under its $3 billion buyback program [8] - Management anticipates capital expenditures in the range of $425-$500 million for fiscal 2025 [8] Store Expansion Plans - In the reported quarter, the company opened nine stores, remodeled five, and closed one, ending with 1,445 stores totaling 15.1 million square feet [9] - For fiscal 2025, Ulta expects to open nearly 60 net new stores and undertake 40-45 store remodeling and relocation projects [9] Future Outlook - Ulta Beauty projects fiscal 2025 net sales between $11.5 billion and $11.6 billion, compared to $11.3 billion in fiscal 2024, with comparable sales expected to be flat to up 1% year over year [10] - Management anticipates an operating margin between 11.7% and 11.8% for fiscal 2025, with earnings per share expected in the range of $22.50-$22.90 [11]