Back to top

Image: Bigstock

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

Read MoreHide Full Article

Ulta Beauty, Inc. (ULTA - Free Report) saw its share price increse 6.5% in Thursday after hours, following impressive fourth-quarter fiscal 2024 results. The company’s top and bottom lines surpassed the Zacks Consensus Estimate. In addition, earnings increased year over year. Ulta Beauty’s better-than-expected results can be attributed to an impressive holiday season. 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The company reported fourth-quarter earnings per share of $8.46, surpassing the Zacks Consensus Estimate of $7.10. The bottom line increased from $8.08 per share in the year-ago period.

Net sales of this beauty product retailer declined 1.9% year over year to $3,487.6 million. The decrease was mainly due to the additional sales week in fiscal 2023, though it was partially offset by revenue growth from new store openings and higher comparable sales. Nevertheless, the metric surpassed the Zacks Consensus Estimate of $3,463.7 million.

Comparable sales, which include sales from stores open for at least 14 months and e-commerce transactions, rose 1.5%. This growth was driven by a 3% rise in average ticket, partially offset by a 1.4% decline in transaction volume.

Zacks Investment Research
Image Source: Zacks Investment Research

ULTA’s Quarterly Results: Key Metrics & Insights

In fourth-quarter fiscal 2024, Ulta Beauty’s gross profit totaled $1,333.7 million, down from $1,340.6 million. However, as a percentage of net sales, gross profit improved to 38.2% from 37.7%. This increase was primarily driven by reduced inventory shrink, a favorable channel mix, and improved merchandise margins. These gains were somewhat offset by increased supply chain costs, reduced other revenues and the impact of fixed cost deleverage in stores and supply chain operations.

Selling, general and administrative (SG&A) expenses decreased to $815.6 million from $820.4 million reported in the prior-year quarter. As a percentage of net sales, SG&A expenses increased to 23.4% from 23.1%. This increase was due to deleveraging of store payroll and benefits.

Operating income was $516.3 million compared with $517.1 million in the same quarter last year. As a percentage of net sales, operating income was 14.8%, up from 14.5% in the year-ago period.

ULTA’s Financial Health Snapshot & Store Update

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $703.2 million. Net merchandise inventories were $2 billion at the end of the reported quarter. Stockholders’ equity at the end of the quarter was $2,488.4 million. Net cash provided by operating activities was $1,338.7 million for the 52 weeks ended Feb. 1, 2025.

The company repurchased 620,053 shares for $249.5 million in the quarter. As of Feb. 1, 2025, Ulta Beauty had shares worth $2.7 billion left under its $3 billion buyback program announced in October 2024. Management expects to buy back shares worth nearly $900 million in fiscal 2025. For the said period, capital expenditures are expected to be in the range of $425-$500 million.

In the reported quarter, the company opened nine stores, remodeled five stores and shuttered one store. It ended the fiscal fourth quarter with 1,445 stores, totaling 15.1 million square feet. For fiscal 2025, ULTA expects almost 60 net new stores, along with 40-45 store remodeling and relocation projects.

Ulta Beauty Inc. Price, Consensus and EPS Surprise

Ulta Beauty Inc. Price, Consensus and EPS Surprise

Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote

What to Expect From ULTA in FY25

Ulta Beauty expects fiscal 2025 net sales in the range of $11.5-$11.6 billion. The company reported net sales of $11.3 billion in fiscal 2024. Comparable sales are expected to be flat to up 1% year over year. 

Management expects an operating margin between 11.7% and 11.8% in fiscal 2025. Earnings per share are envisioned to be in the range of $22.50-$22.90. Ulta Beauty’s earnings came in at $25.34 per share in fiscal 2024. The company expects the effective tax rate to be nearly 24.5% in fiscal 2025. 

Ulta Beauty’s stock has decreased 21.6% in the past three months compared with the industry’s decline of 15.5%.

Stocks Looking Red Hot

Nordstrom, Inc. (JWN - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). JWN has a trailing four-quarter negative earnings surprise of 26.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for JWN’s fiscal 2026 sales indicates a rise of 1.9% from the year-ago period’s levels.

Deckers (DECK - Free Report) , a footwear and accessories dealer, currently has a Zacks Rank #2 (Buy). DECK delivered an average earnings surprise of 36.8% in the trailing four quarters.

The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 15.6% from the year-ago figure.

Urban Outfitters (URBN - Free Report) , a fashion lifestyle specialty retailer, currently carries a Zacks Rank of 2. URBN delivered an average earnings surprise of 28.4% in the trailing four quarters. 

The consensus estimate for Urban Outfitters’ current financial-year sales indicates growth of 6% from the year-ago figure.

Published in