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Ulta Beauty, Inc. (ULTA - Free Report) reported solid first-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. Better-than-expected results prompted management to raise its full-year view.
The company reported first-quarter earnings per share of $6.70, beating the Zacks Consensus Estimate of $5.77. The bottom line increased from $6.47 in the year-ago period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Net sales of this beauty product retailer increased 4.5% year over year to $2,848.4 million and surpassed the Zacks Consensus Estimate of $2,789 million. This growth was driven by higher comparable sales and contributions from new store openings, partially offset by a decline in other revenues.
Comparable sales, which include sales from stores open for at least 14 months and e-commerce transactions, rose 2.9%. This growth was driven by a 2.3% rise in average ticket and a 0.6% increase in transaction volume. We expected comparable sales to decline 0.2%.
ULTA’s Quarterly Results: Key Metrics & Insights
Ulta Beauty’s gross profit totaled $1,114.2 million, up 4.2% from $1,069.8 million. However, as a percentage of net sales, gross profit contracted to 39.1% from 39.2%. This decrease was due to deleverage in store and supply-chain fixed costs, along with lower other revenues, partially offset by reduced inventory shrinkage. We anticipated the gross margin to contract 10 bps.
Selling, general and administrative (SG&A) expenses increased 6.7% to $710.6 million from $665.9 million reported in the prior-year quarter. As a percentage of net sales, SG&A expenses increased to 24.9% from 24.4%. This increase was due to the deleveraging of store payroll and benefits, and store expenses, partially offset by the leverage of corporate overhead.
Operating income was $401.8 million compared with $400.9 million in the prior-year quarter. As a percentage of net sales, operating income was 14.1%, down from 14.7% in the year-ago period. We expected an operating margin of 12.4%.
ULTA’s Financial Health Snapshot & Store Update
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $454.6 million. Net merchandise inventories were $2.1 billion at the end of the reported quarter. Stockholders’ equity at the end of the quarter was $2,430.3 million. Net cash provided by operating activities was $220 million for the 13 weeks ended May 3, 2025.
The company repurchased 986,733 shares for $358.7 million in the quarter. As of May 3, 2025, Ulta Beauty had $2.3 billion left under its $3 billion share buyback program announced in October 2024. Management still 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 six stores, remodeled four stores and relocated two stores. It ended the fiscal first quarter with 1,451 stores, totaling 15.2 million square feet. For fiscal 2025, ULTA still expects almost 60 net new stores, along with 40-45 store remodeling and relocation projects.
What to Expect From ULTA in FY25
Ulta Beauty now expects fiscal 2025 net sales in the range of $11.5-$11.7 billion compared with its prior outlook of $11.5-$11.6 billion. The company reported net sales of $11.3 billion in fiscal 2024. Comparable sales are now expected to be flat to up 1.5% year over year. Earlier, it anticipated comparable sales to be flat to up 1%.
Management still expects an operating margin between 11.7% and 11.8% in fiscal 2025. Earnings per share are now envisioned to be in the range of $22.65-$23.20, revised from the earlier range of $22.50-$22.90. Ulta Beauty’s earnings were $25.34 per share in fiscal 2024.
The stock has gained 15.1% in the past three months compared with the industry’s growth of 2.9%.
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 20.9% and 8%, respectively, from the year-ago period’s reported figures. URBN delivered a trailing four-quarter average earnings surprise of 29%.
Genesco Inc. (GCO - Free Report) operates as a retailer and wholesaler of footwear, apparel and accessories, carrying a Zacks Rank #2 (Buy). GCO delivered a trailing four-quarter earnings surprise of 37.2%, on average.
The Zacks Consensus Estimate for Genesco’s current fiscal-year earnings and sales indicates growth of 63.8% and 0.6%, respectively, from the year-ago period’s reported figures.
Canada Goose Holdings Inc. (GOOS - Free Report) designs, manufactures and sells performance luxury apparel for men, women, youth, children and babies. It carries a Zacks Rank of 2 at present. GOOS delivered a trailing four-quarter average earnings surprise of 57.2%.
The Zacks Consensus Estimate for Canada Goose’s current fiscal-year earnings and sales implies a decline of 10% and 2.9%, respectively, from the year-ago actuals.
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Ulta Beauty's Q1 Earnings & Sales Beat Estimates, FY25 View Raised
Ulta Beauty, Inc. (ULTA - Free Report) reported solid first-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. Better-than-expected results prompted management to raise its full-year view.
The company reported first-quarter earnings per share of $6.70, beating the Zacks Consensus Estimate of $5.77. The bottom line increased from $6.47 in the year-ago period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote
Net sales of this beauty product retailer increased 4.5% year over year to $2,848.4 million and surpassed the Zacks Consensus Estimate of $2,789 million. This growth was driven by higher comparable sales and contributions from new store openings, partially offset by a decline in other revenues.
Comparable sales, which include sales from stores open for at least 14 months and e-commerce transactions, rose 2.9%. This growth was driven by a 2.3% rise in average ticket and a 0.6% increase in transaction volume. We expected comparable sales to decline 0.2%.
ULTA’s Quarterly Results: Key Metrics & Insights
Ulta Beauty’s gross profit totaled $1,114.2 million, up 4.2% from $1,069.8 million. However, as a percentage of net sales, gross profit contracted to 39.1% from 39.2%. This decrease was due to deleverage in store and supply-chain fixed costs, along with lower other revenues, partially offset by reduced inventory shrinkage. We anticipated the gross margin to contract 10 bps.
Selling, general and administrative (SG&A) expenses increased 6.7% to $710.6 million from $665.9 million reported in the prior-year quarter. As a percentage of net sales, SG&A expenses increased to 24.9% from 24.4%. This increase was due to the deleveraging of store payroll and benefits, and store expenses, partially offset by the leverage of corporate overhead.
Operating income was $401.8 million compared with $400.9 million in the prior-year quarter. As a percentage of net sales, operating income was 14.1%, down from 14.7% in the year-ago period. We expected an operating margin of 12.4%.
ULTA’s Financial Health Snapshot & Store Update
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $454.6 million. Net merchandise inventories were $2.1 billion at the end of the reported quarter. Stockholders’ equity at the end of the quarter was $2,430.3 million. Net cash provided by operating activities was $220 million for the 13 weeks ended May 3, 2025.
The company repurchased 986,733 shares for $358.7 million in the quarter. As of May 3, 2025, Ulta Beauty had $2.3 billion left under its $3 billion share buyback program announced in October 2024. Management still 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 six stores, remodeled four stores and relocated two stores. It ended the fiscal first quarter with 1,451 stores, totaling 15.2 million square feet. For fiscal 2025, ULTA still expects almost 60 net new stores, along with 40-45 store remodeling and relocation projects.
What to Expect From ULTA in FY25
Ulta Beauty now expects fiscal 2025 net sales in the range of $11.5-$11.7 billion compared with its prior outlook of $11.5-$11.6 billion. The company reported net sales of $11.3 billion in fiscal 2024. Comparable sales are now expected to be flat to up 1.5% year over year. Earlier, it anticipated comparable sales to be flat to up 1%.
Management still expects an operating margin between 11.7% and 11.8% in fiscal 2025. Earnings per share are now envisioned to be in the range of $22.65-$23.20, revised from the earlier range of $22.50-$22.90. Ulta Beauty’s earnings were $25.34 per share in fiscal 2024.
The stock has gained 15.1% in the past three months compared with the industry’s growth of 2.9%.
Image Source: Zacks Investment Research
Key Picks
Urban Outfitters, Inc. (URBN - Free Report) offers lifestyle products and services. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 20.9% and 8%, respectively, from the year-ago period’s reported figures. URBN delivered a trailing four-quarter average earnings surprise of 29%.
Genesco Inc. (GCO - Free Report) operates as a retailer and wholesaler of footwear, apparel and accessories, carrying a Zacks Rank #2 (Buy). GCO delivered a trailing four-quarter earnings surprise of 37.2%, on average.
The Zacks Consensus Estimate for Genesco’s current fiscal-year earnings and sales indicates growth of 63.8% and 0.6%, respectively, from the year-ago period’s reported figures.
Canada Goose Holdings Inc. (GOOS - Free Report) designs, manufactures and sells performance luxury apparel for men, women, youth, children and babies. It carries a Zacks Rank of 2 at present. GOOS delivered a trailing four-quarter average earnings surprise of 57.2%.
The Zacks Consensus Estimate for Canada Goose’s current fiscal-year earnings and sales implies a decline of 10% and 2.9%, respectively, from the year-ago actuals.