Net Sales of $2.3 Billion Compared to $1.9
Billion in the Year-Ago Quarter
Comparable Sales Increased 18.0%
Net Income of $331.4 Million or $6.30 Per
Diluted Share
Company Raises Outlook for Fiscal Year
2022
Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial
results for the first quarter ended April 30, 2022.
13 Weeks Ended
April 30,
May 1,
May 2,
(Dollars in
millions)
2022
2021
2020
Net sales
$
2,345.9
$
1,938.5
$
1,173.2
Comparable sales
18.0%
65.9%
(35.3%)
Gross profit (as a percentage of net
sales)
40.1%
38.9%
25.9%
Selling, general and administrative
expenses
$
501.0
$
443.9
$
380.9
Operating income (loss) (as a percentage
of net sales)
18.7%
15.8%
(8.7%)
Diluted earnings (loss) per share
$
6.30
$
4.10
$
(1.39)
New store openings, net
10
26
10
“The Ulta Beauty team delivered exceptional first quarter
results, with better-than-expected sales and earnings growth,
supported by double-digit comparable sales growth across all major
categories,” said Dave Kimbell, chief executive officer. “Solid
execution of our strategies, paired with strong guest demand,
fueled our financial performance and continued market share gains
as we delighted our guests with exciting brand launches within our
one-of-a-kind assortment and differentiated guest experiences.”
For the First Quarter of Fiscal 2022
- Net sales increased 21.0% to $2.3 billion compared to $1.9
billion in the first quarter of fiscal 2021 due to the favorable
impact of fewer COVID-19 restrictions compared to the first quarter
of fiscal 2021.
- Comparable sales (sales for stores open at least 14 months and
e-commerce sales) increased 18.0%, driven by a 10.0% increase in
transactions and an 7.3% increase in average ticket.
- Gross profit increased to $941.0 million compared to $753.8
million in the first quarter of fiscal 2021. As a percentage of net
sales, gross profit increased to 40.1% compared to 38.9% in the
first quarter of fiscal 2021, primarily due to leverage in fixed
costs, strong growth in other revenue, and favorable channel mix
shifts, partially offset by lower merchandise margin.
- Selling, general and administrative (“SG&A”) expenses
increased to $501.0 million compared to $443.9 million in the first
quarter of fiscal 2021. As a percentage of net sales, SG&A
expenses decreased to 21.4% compared to 22.9% in the first quarter
of fiscal 2021, primarily due to lower marketing expenses and
leverage in store payroll and benefits due to higher sales,
partially offset by deleverage in corporate overhead due to
strategic investments.
- Pre-opening expenses decreased to $2.3 million compared to $4.6
million for the first quarter of fiscal 2021.
- Operating income increased to $437.7 million, or 18.7% of net
sales, compared to $305.3 million, or 15.8% of net sales, in the
first quarter of fiscal 2021.
- Tax rate decreased to 24.2% compared to 24.5% in the first
quarter of fiscal 2021.
- Net income increased to $331.4 million compared to $230.3
million in the first quarter of fiscal 2021.
- Diluted earnings per share increased to $6.30, including a
$0.02 benefit due to income tax accounting for share-based
compensation, compared to $4.10, including a $0.03 benefit due to
income tax accounting for share-based compensation, in the first
quarter of fiscal 2021.
Balance Sheet
Cash and cash equivalents at the end of the first quarter of
fiscal 2022 totaled $654.5 million.
Merchandise inventories, net at the end of first quarter of
fiscal 2022 increased to $1.57 billion compared to $1.35 billion at
the end of the first quarter of fiscal 2021. The increase reflects
the addition of 28 net new stores, inventory to support new brand
launches, and the acceleration of inventory receipts to support
expected demand and mitigate anticipated global supply chain
disruptions.
Share Repurchase Program
During the first quarter of fiscal 2022, the Company repurchased
331,834 shares of its common stock at a cost of $132.8 million. As
of April 30, 2022, $1.87 billion remained available under the $2.0
billion share repurchase program announced in March 2022.
Store Update
Real estate activity in the first quarter of fiscal 2022
included 10 new stores located in Cranston, RI; Las Vegas, NV;
Meriden, CT; North Hollywood, CA; Prince Frederick, MD; Riverside,
CA; Stephenville, TX; Vienna, VA; Warrenton,VA; and Woodbridge, NJ.
In addition, the Company relocated six stores.
At the end of the first quarter of fiscal 2022, the Company
operated 1,318 stores totaling 13.9 million square feet.
Fiscal 2022 Outlook
The Company has updated its outlook for fiscal 2022.
Prior FY22 Outlook
Updated FY22 Outlook
Net sales
$9.05 billion to $9.15
billion
$9.35 billion to $9.55
billion
Comparable sales
3% to 4%
6% to 8%
New stores, net
50
no change
Remodel and relocation projects
35
no change
Operating margin
13.7% to 14.0%
14.1% to 14.4%
Diluted earnings per share
$18.20 to $18.70
$19.20 to $20.10
Share repurchases
approximately $900 million
no change
Effective tax rate
approximately 24.5%
no change
Capital expenditures
$375 million to $425 million
no change
Depreciation and amortization expense
$250 million to $255 million
no change
The Company’s outlook for fiscal 2022 assumes no material
increases in the federal minimum wage.
Conference Call Information
A conference call to discuss first quarter of fiscal 2022
results is scheduled for today, May 26, 2022, at 4:30 p.m. Eastern
Time / 3:30 p.m. Central Time. Investors and analysts interested in
participating in the call are invited to dial (877) 704‑4453. The
conference call will also be webcast live at
https://www.ulta.com/investor. A replay of the webcast will remain
available for 90 days. A replay of the conference call will be
available until 11:59 p.m. ET on June 9, 2022 and can be accessed
by dialing (844) 512‑2921 and entering conference ID number
13729192.
About Ulta Beauty
At Ulta Beauty (NASDAQ: ULTA), the possibilities are beautiful.
Ulta Beauty is the largest 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 1,318 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.
Ulta Beauty was recently added to the Bloomberg Gender Equality
Index, which tracks the financial performance of public companies
committed to supporting gender equality through policy development,
representation and transparency. More information about Ulta
Beauty’s corporate responsibility efforts can be found at
www.ulta.com/investor/ESG.
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:
- changes in the overall level of consumer spending and
volatility in the economy, including as a result of the COVID-19
pandemic and geo-political events;
- the impact of current inflationary cost pressures on payroll,
benefits, supply chain, and other operating costs;
- our ability to sustain our growth plans and successfully
implement our long-range strategic and financial plan;
- the ability to execute our operational excellence priorities,
including continuous improvement, Project SOAR (our replacement
enterprise resource planning platform), and supply chain
optimization;
- our ability to gauge beauty trends and react to changing
consumer preferences in a timely manner;
- the possibility that we may be unable to compete effectively in
our highly competitive markets;
- the possibility that cybersecurity or information security
breaches and other disruptions could compromise our information or
result in the unauthorized disclosure of confidential
information;
- the possibility of material disruptions to our information
systems;
- the failure to maintain satisfactory compliance with applicable
privacy and data protection laws and regulations;
- the possibility that the capacity of our distribution and order
fulfillment infrastructure and the performance of our distribution
centers and fast fulfillment centers may not be adequate to support
our expected future growth plans;
- changes in the wholesale cost of our products;
- a decline in operating results that has and may continue to
lead to asset impairment and store closure charges;
- the possibility that new store openings and existing locations
may be impacted by developer or co-tenant issues;
- our ability to attract and retain key executive personnel;
- the impact of climate change on our business operations and/or
supply chain;
- our ability to successfully execute our common stock repurchase
program or implement future common stock repurchase programs;
and
- other risk factors detailed in the company’s public filings
with the Securities and Exchange Commission (the SEC), including
risk factors contained in its Annual Report on Form 10‑K for the
fiscal year ended January 29, 2022, as such may be amended or
supplemented in its subsequently filed Quarterly Reports on Form
10-Q.
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)
13 Weeks Ended
April 30,
May 1,
2022
2021
(Unaudited)
(Unaudited)
Net sales
$
2,345,901
100.0
%
$
1,938,519
100.0
%
Cost of sales
1,404,875
59.9
%
1,184,731
61.1
%
Gross profit
941,026
40.1
%
753,788
38.9
%
Selling, general and administrative
expenses
500,970
21.4
%
443,875
22.9
%
Pre-opening expenses
2,348
0.1
%
4,589
0.2
%
Operating income
437,708
18.7
%
305,324
15.8
%
Interest expense, net
401
0.0
%
358
0.0
%
Income before income taxes
437,307
18.6
%
304,966
15.8
%
Income tax expense
105,912
4.5
%
74,677
3.9
%
Net income
$
331,395
14.1
%
$
230,289
11.9
%
Net income per common share:
Basic
$
6.34
$
4.13
Diluted
$
6.30
$
4.10
Weighted average common shares
outstanding:
Basic
52,250
55,795
Diluted
52,582
56,172
Exhibit 2
Ulta Beauty, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
April 30,
January 29,
May 1,
2022
2022
2021
(Unaudited)
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
654,486
$
431,560
$
947,456
Receivables, net
192,754
233,682
154,342
Merchandise inventories, net
1,570,552
1,499,218
1,353,565
Prepaid expenses and other current
assets
114,075
110,814
108,393
Prepaid income taxes
—
5,909
—
Total current assets
2,531,867
2,281,183
2,563,756
Property and equipment, net
909,543
914,476
960,440
Operating lease assets
1,488,040
1,482,256
1,487,616
Goodwill
10,870
10,870
10,870
Other intangible assets, net
1,307
1,538
2,233
Deferred compensation plan assets
35,978
38,409
34,279
Other long-term assets
34,431
35,647
28,350
Total assets
$
5,012,036
$
4,764,379
$
5,087,544
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
585,500
$
552,730
$
552,837
Accrued liabilities
305,000
364,797
322,676
Deferred revenue
324,694
353,579
270,090
Current operating lease liabilities
276,440
274,118
263,200
Accrued income taxes
108,113
12,786
113,960
Total current liabilities
1,599,747
1,558,010
1,522,763
Non-current operating lease
liabilities
1,568,356
1,572,638
1,613,309
Deferred income taxes
40,702
39,693
66,483
Other long-term liabilities
57,611
58,665
40,272
Total liabilities
3,266,416
3,229,006
3,242,827
Commitments and contingencies
Total stockholders’ equity
1,745,620
1,535,373
1,844,717
Total liabilities and stockholders’
equity
$
5,012,036
$
4,764,379
$
5,087,544
Exhibit 3
Ulta Beauty, Inc.
Consolidated Statements of
Cash Flows
(In thousands)
13 Weeks Ended
April 30,
May 1,
2022
2021
(Unaudited)
(Unaudited)
Operating activities
Net income
$
331,395
$
230,289
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
62,839
70,599
Non-cash lease expense
72,192
68,881
Deferred income taxes
1,009
1,124
Stock-based compensation expense
10,356
8,978
Loss on disposal of property and
equipment
1,002
1,089
Change in operating assets and
liabilities:
Receivables
40,928
38,767
Merchandise inventories
(71,334
)
(185,350
)
Prepaid expenses and other current
assets
(3,261
)
(991
)
Income taxes
101,236
71,431
Accounts payable
42,586
76,580
Accrued liabilities
(57,214
)
23,209
Deferred revenue
(28,885
)
(4,293
)
Operating lease liabilities
(79,936
)
(72,175
)
Other assets and liabilities
3,390
1,929
Net cash provided by operating
activities
426,303
330,067
Investing activities
Capital expenditures
(71,076
)
(34,563
)
Other investments
(797
)
—
Net cash used in investing activities
(71,873
)
(34,563
)
Financing activities
Repurchase of common shares
(132,834
)
(392,309
)
Stock options exercised
6,502
5,032
Purchase of treasury shares
(5,172
)
(6,766
)
Net cash used in financing activities
(131,504
)
(394,043
)
Effect of exchange rate changes on cash
and cash equivalents
—
(56
)
Net increase (decrease) in cash and cash
equivalents
222,926
(98,595
)
Cash and cash equivalents at beginning of
period
431,560
1,046,051
Cash and cash equivalents at end of
period
$
654,486
$
947,456
Exhibit 4
Ulta Beauty, Inc.
Store Update
Total stores open
Number of stores
Number of stores
Total stores
at beginning of the
opened during the
closed during the
open at
Fiscal 2022
quarter
quarter
quarter
end of the quarter
1st Quarter
1,308
10
0
1,318
Gross square feet for
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 2022
the quarter
quarter
during the quarter
quarter
1st Quarter
13,770,438
90,905
0
13,861,343
Exhibit 5
Ulta Beauty, Inc.
Sales by Category
The following table sets forth the
approximate percentage of net sales by primary category:
13 Weeks Ended
April 30,
May 1,
2022
2021
Cosmetics
44
%
45
%
Haircare products and styling tools
20
%
19
%
Skincare
18
%
19
%
Fragrance and bath
12
%
11
%
Services
3
%
3
%
Accessories and other
3
%
3
%
100
%
100
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220526005523/en/
Investor Contacts: Kiley Rawlins, CFA Vice President, Investor
Relations krawlins@ulta.com
Media Contact: Eileen Ziesemer Vice President, Public Relations
eziesemer@ulta.com (708) 305-4479
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