Ulta Beauty, Inc 10-Q for FY2025 Q2

Ulta Beauty, Inc. (ULTA)

10-Q 2024-08-29 For: 2024-08-03

Added on April 04, 2026

About this 10-Q

Ulta Beauty, Inc filed this 10-Q on August 29, 2024, covering the quarter ended August 3, 2024 (FY2025 Q2).

Headline figures

Quarter ended August 3, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.55B; up 0.9% from $2.53B a year earlier
Net income: $252.56M; down 15.8% from net income of $300.1M a year earlier
Diluted EPS: $5.30; down 12.0% from $6.02 a year earlier

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Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ULTA	The NASDAQ Global Select Market


Part I - Financial Information

Item 1. Financial Statements
Consolidated Balance Sheets		3
Consolidated Statements of Income		4
Consolidated Statements of Cash Flows		5
Consolidated Statements of Stockholders’ Equity		6
Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3. Quantitative and Qualitative Disclosures about Market Risk		24

Item 4. Controls and Procedures		24

Part II - Other Information		25

Item 1. Legal Proceedings		25

Item 1A. Risk Factors		25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		25

Item 3. Defaults Upon Senior Securities		25

Item 4. Mine Safety Disclosures		25

Item 5. Other Information		26

Item 6. Exhibits		26

SIGNATURES		27


	August 3,		February 3,		July 29,
(In thousands, except per share data)	2024		2024		2023
Assets		(Unaudited)				(Unaudited)
Current assets:
Cash and cash equivalents	$	413,962	$	766,594	$	388,627
Receivables, net		200,863		207,939		174,444
Merchandise inventories, net		1,998,286		1,742,136		1,815,539
Prepaid expenses and other current assets		132,023		115,598		110,524
Prepaid income taxes		53,607		4,251		30,114
Total current assets		2,798,741		2,836,518		2,519,248

Property and equipment, net		1,225,850		1,182,335		1,073,144
Operating lease assets		1,599,735		1,574,530		1,549,146
Goodwill		10,870		10,870		10,870
Other intangible assets, net		357		510		718
Deferred compensation plan assets		46,280		43,516		40,087
Other long-term assets		55,575		58,732		55,547
Total assets	$	5,737,408	$	5,707,011	$	5,248,760

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	566,904	$	544,001	$	521,315
Accrued liabilities		348,042		382,468		328,247
Deferred revenue		394,987		436,591		354,253
Current operating lease liabilities		281,301		283,821		287,359
Accrued income taxes		—		11,310		—
Total current liabilities		1,591,234		1,658,191		1,491,174

Non-current operating lease liabilities		1,647,698		1,627,271		1,593,040
Deferred income taxes		88,461		85,921		56,012
Other long-term liabilities		61,855		56,300		56,657
Total liabilities		3,389,248		3,427,683		3,196,883

Commitments and contingencies (Note 6)

Stockholders' equity:
Common stock, $0.01 par value, 400,000 shares authorized; 48,143, 49,123, and 50,139 shares issued; 47,300, 48,324, and 49,341 shares outstanding; at August 3, 2024 (unaudited), February 3, 2024, and July 29, 2023 (unaudited), respectively		481		491		501
Treasury stock-common, at cost		(106,491)		(83,032)		(82,229)
Additional paid-in capital		1,099,197		1,075,104		1,049,679
Retained earnings		1,354,973		1,286,765		1,083,926
Total stockholders’ equity		2,348,160		2,279,328		2,051,877
Total liabilities and stockholders’ equity	$	5,737,408	$	5,707,011	$	5,248,760


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands, except per share data)	2024		2023		2024		2023
Net sales	$	2,552,087	$	2,529,809	$	5,277,935	$	5,164,072
Cost of sales		1,573,910		1,536,197		3,229,978		3,115,603
Gross profit		978,177		993,612		2,047,957		2,048,469

Selling, general and administrative expenses		644,821		600,692		1,310,734		1,212,821
Pre-opening expenses		4,155		1,278		7,074		1,936
Operating income		329,201		391,642		730,149		833,712
Interest income, net		(4,526)		(4,449)		(11,426)		(11,797)
Income before income taxes		333,727		396,091		741,575		845,509
Income tax expense		81,171		95,989		175,906		198,356
Net income	$	252,556	$	300,102	$	565,669	$	647,153

Net income per common share:
Basic	$	5.32	$	6.05	$	11.83	$	12.97
Diluted	$	5.30	$	6.02	$	11.78	$	12.90

Weighted average common shares outstanding:
Basic		47,505		49,617		47,815		49,885
Diluted		47,667		49,849		48,022		50,157


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Operating activities
Net income	$	565,669	$	647,153
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		130,053		119,862
Non-cash lease expense		163,481		152,867
Deferred income taxes		2,540		666
Stock-based compensation expense		19,272		21,539
Loss on disposal of property and equipment		5,204		3,878
Change in operating assets and liabilities:
Receivables		7,076		24,978
Merchandise inventories		(256,150)		(212,088)
Prepaid expenses and other current assets		(16,425)		19,722
Income taxes		(60,666)		8,194
Accounts payable		29,715		(38,752)
Accrued liabilities		(33,634)		(102,763)
Deferred revenue		(41,604)		(40,424)
Operating lease liabilities		(170,779)		(163,527)
Other assets and liabilities		15,127		(12,497)
Net cash provided by operating activities		358,879		428,808

Investing activities
Capital expenditures		(186,301)		(204,748)
Other investments		(5,091)		(1,687)
Net cash used in investing activities		(191,392)		(206,435)

Financing activities
Repurchase of common shares		(501,768)		(559,011)
Stock options exercised		9,196		9,147
Purchase of treasury shares		(23,459)		(21,759)
Debt issuance costs		(4,088)		—
Net cash used in financing activities		(520,119)		(571,623)

Net decrease in cash and cash equivalents		(352,632)		(349,250)
Cash and cash equivalents at beginning of period		766,594		737,877
Cash and cash equivalents at end of period	$	413,962	$	388,627

Supplemental information
Income taxes paid, net of refunds	$	233,249	$	189,166
Non-cash capital expenditures		54,075		51,860


				Treasury -
	Common Stock			Common Stock			Additional				Total
	Issued			Treasury			Paid-In		Retained		Stockholders'
(In thousands)	Shares	Amount		Shares	Amount		Capital		Earnings		Equity
Balance – February 3, 2024	49,123	$	491	(799)	$	(83,032)	$	1,075,104	$	1,286,765	$	2,279,328
Net income	—		—	—		—		—		313,113		313,113
Stock-based compensation	—		—	—		—		10,082		—		10,082
Stock options exercised and other awards	153		2	—		—		8,911		—		8,913
Purchase of treasury shares	—		—	(44)		(23,283)		—		—		(23,283)
Repurchase of common shares, including excise tax	(588)		(6)	—		—		(2,275)		(285,129)		(287,410)
Balance – May 4, 2024	48,688	$	487	(843)	$	(106,315)	$	1,091,822	$	1,314,749	$	2,300,743
Net income	—		—	—		—		—		252,556		252,556
Stock-based compensation	—		—	—		—		9,190		—		9,190
Stock options exercised and other awards	5		—	—		—		283		—		283
Purchase of treasury shares	—		—	—		(176)		—		—		(176)
Repurchase of common shares, including excise tax	(550)		(6)	—		—		(2,098)		(212,332)		(214,436)
Balance – August 3, 2024	48,143	$	481	(843)	$	(106,491)	$	1,099,197	$	1,354,973	$	2,348,160


	Number of		Number of
Location	stores	Location	stores
Alabama	27	Montana	6
Alaska	3	Nebraska	5
Arizona	37	Nevada	16
Arkansas	11	New Hampshire	8
California	173	New Jersey	46
Colorado	27	New Mexico	7
Connecticut	19	New York	56
Delaware	4	North Carolina	46
Florida	100	North Dakota	4
Georgia	44	Ohio	47
Hawaii	4	Oklahoma	22
Idaho	10	Oregon	19
Illinois	55	Pennsylvania	45
Indiana	26	Rhode Island	5
Iowa	11	South Carolina	26
Kansas	14	South Dakota	3
Kentucky	16	Tennessee	32
Louisiana	18	Texas	133
Maine	3	Utah	15
Maryland	29	Vermont	1
Massachusetts	27	Virginia	35
Michigan	49	Washington	37
Minnesota	20	West Virginia	7
Mississippi	12	Wisconsin	21
Missouri	26	Wyoming	4
		Total	1,411


Period	Total number of shares purchased (1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under plans or programs (in thousands) (2)
May 5, 2024 to June 1, 2024	227,498	$	390.77	227,498	$	1,694,463
June 2, 2024 to June 29, 2024	265,523		389.32	265,393		1,592,158
June 30, 2024 to August 3, 2024	57,299		389.99	56,961		1,570,158
13 weeks ended August 3, 2024	550,320		389.99	549,852		1,570,158


			Incorporated by Reference
Exhibit Number	Description of document	Filed Herewith	Form	Exhibit Number	File Number	Filing Date

3.1	Certificate of Incorporation of Ulta Beauty, Inc., as amended through June 1, 2023		8-K	3.1	001-33764	6/07/2023
3.2	Bylaws of Ulta Beauty, Inc., as amended through June 1, 2023		8-K	3.3	001-33764	6/07/2023
31.1	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002	X
32	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	Inline XBRL Instance	X
101.SCH	Inline XBRL Taxonomy Extension Schema	X
101.CAL	Inline XBRL Taxonomy Extension Calculation	X
101.LAB	Inline XBRL Taxonomy Extension Labels	X
101.PRE	Inline XBRL Taxonomy Extension Presentation	X
101.DEF	Inline XBRL Taxonomy Extension Definition	X
104	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).


	ULTA BEAUTY, INC.

	By:	/s/ David C. Kimbell
		David C. Kimbell Chief Executive Officer and Director

	By:	/s/ Paula M. Oyibo
		Paula M. Oyibo Chief Financial Officer and Treasurer


Date: August 29, 2024	By:	/s/ David C. Kimbell

		David C. Kimbell Chief Executive Officer and Director


	13 Weeks Ended		26 Weeks Ended
	August 3,	July 29,	August 3,	July 29,
(Percentage of net sales)	2024	2023	2024	2023
Cosmetics	39%	40%	40%	42%
Skincare	24%	23%	24%	22%
Haircare	20%	22%	19%	21%
Fragrance	11%	9%	11%	9%
Services	4%	4%	4%	4%
Other	2%	2%	2%	2%
	100%	100%	100%	100%


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands)	2024		2023		2024		2023
Beginning balance	$	391,446	$	350,123	$	428,788	$	388,583
Additions to contract liabilities (1)		120,189		114,374		253,584		237,770
Deductions to contract liabilities (2)		(123,818)		(118,430)		(294,555)		(280,286)
Ending balance	$	387,817	$	346,067	$	387,817	$	346,067



	26 Weeks Ended
	August 3,	July 29,
	2024	2023
Volatility rate	33.0%	45.0%
Average risk-free interest rate	4.4%	3.8%
Average expected life (in years)	3.5	3.4
Dividend yield	—	—