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Ulta Beauty's Q2 EPS of $5.78 and sales of $2.79B beat estimates and rose year over year.
Comparable sales climbed 6.7%, fueled by higher transactions and average ticket growth.
FY25 sales outlook raised to $12-$12.1B, with EPS now estimated at $23.85-$24.30.
Ulta Beauty, Inc. ((ULTA - Free Report) ) reported second-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 second-quarter earnings per share of $5.78, beating the Zacks Consensus Estimate of $5.03. The bottom line increased from $5.30 in the year-ago period.
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Net sales of this beauty product retailer increased 9.3% year over year to $2,788.5 million and beat the Zacks Consensus Estimate of $2,653 million. This growth was driven by higher comparable sales, the acquisition of Space NK and new store contributions.
Comparable sales, which include sales from stores open for at least 14 months and e-commerce transactions, rose 6.7%. This growth was driven by a 2.9% rise in average ticket and a 3.7% increase in transactions. We expected comparable sales to increase 0.5%.
ULTA’s Quarterly Results: Key Metrics & Insights
Ulta Beauty’s gross profit totaled $1,091.7 million, up 11.6% from $978.2 million. Moreover, as a percentage of net sales, gross profit expanded 39.2% from 38.3%. This increase was driven by reduced inventory shrinkage and elevated merchandise margin, partially offset by deleverage in supply-chain costs, along with lower other revenues. We anticipated the gross margin to contract 30 bps.
Selling, general and administrative (SG&A) expenses increased 15% to $741.7 million from $644.8 million reported in the prior-year quarter. As a percentage of net sales, SG&A expenses increased to 26.6% from 25.3%. This increase was due to the increased incentive compensation, store payroll and benefits, and corporate overhead.
Operating income was $344.9 million compared with $329.2 million in the prior-year quarter. As a percentage of net sales, operating income was 12.4%, down from 12.9% in the year-ago period. We expected an operating margin of 10.8%.
ULTA’s Financial Health Snapshot & Store Update
This Zacks Rank #2 (Buy) company ended the quarter with cash and cash equivalents of $242.7 million. Net merchandise inventories were $2,407.1 million at the end of the reported quarter. Stockholders’ equity at the end of the quarter was $2,603.9 million. Net cash provided by operating activities was $316.5 million for the 26 weeks ended Aug. 2, 2025.
The company repurchased 244,559 shares for $109.5 million in the quarter. In the first six months of fiscal 2025, repurchases totaled 1.2 million shares at a cost of $468.3 million. As of Aug. 2, 2025, Ulta Beauty had shares worth $2.2 billion left under its $3 billion 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 24 stores, relocated two stores, remodeled five stores and closed two stores. It ended the fiscal second quarter with 1,473 stores, totaling 15.4 million square feet across the United States, excluding the 83 stores in the United Kingdom and Ireland operated by Space NK. For fiscal 2025, ULTA now expects almost 63 net new stores, along with 43-48 store remodeling and relocation projects. Earlier, it anticipated approximately 60 net new stores and 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 $12-$12.1 billion, up from its prior outlook of $11.5-$11.7 billion. The company reported net sales of $11.3 billion in fiscal 2024. Comparable sales are now expected to be 2.5% to 3.5% year over year. Earlier, it anticipated comparable sales to be flat to up 1.5%.
Management now expects an operating margin between 11.9% and 12% in fiscal 2025, up from its prior outlook of 11.7% and 11.8%. Earnings per share are now envisioned to be in the range of $23.85-$24.30, up from the earlier range of $22.65-$23.20. Ulta Beauty’s earnings were $25.34 per share in fiscal 2024.
The stock has risen 12.5% in the past three months compared with the industry’s growth of 23.2%.
Image Source: Zacks Investment Research
Other Key Picks
Levi Strauss & Co. ((LEVI - Free Report) ) designs, markets, and sells apparels and related accessories for men, women, and children in the United States and internationally. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Levi’s current fiscal-year earnings indicates growth of 4% from the year-ago actual. LEVI delivered a trailing four-quarter average earnings surprise of 25.9%.
Wolverine World Wide, Inc. ((WWW - Free Report) ) designs, manufactures, sources, markets, licenses, and distributes footwear, apparel, and accessories. It currently sports a Zacks Rank of 1. WWW delivered a trailing four-quarter average earnings surprise of 39.1%.
The Zacks Consensus Estimate for Wolverine’s current fiscal-year earnings and sales indicates growth of 46.2% and 6.5%, respectively, from the year-ago actuals.
Sally Beauty Holdings, Inc. ((SBH - Free Report) ) operates as a specialty retailer and distributor of professional beauty supplies. It currently holds a Zacks Rank of 2. SBH delivered a trailing four-quarter average earnings surprise of 8.3%.
The Zacks Consensus Estimate for Sally Beauty’s current fiscal-year earnings indicates growth of 8.9%, from the year-ago actuals.
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Ulta Beauty Q2 Earnings & Sales Beat Estimates, FY25 Outlook Raised
Key Takeaways
Ulta Beauty, Inc. ((ULTA - Free Report) ) reported second-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 second-quarter earnings per share of $5.78, beating the Zacks Consensus Estimate of $5.03. The bottom line increased from $5.30 in the year-ago period.
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 9.3% year over year to $2,788.5 million and beat the Zacks Consensus Estimate of $2,653 million. This growth was driven by higher comparable sales, the acquisition of Space NK and new store contributions.
Comparable sales, which include sales from stores open for at least 14 months and e-commerce transactions, rose 6.7%. This growth was driven by a 2.9% rise in average ticket and a 3.7% increase in transactions. We expected comparable sales to increase 0.5%.
ULTA’s Quarterly Results: Key Metrics & Insights
Ulta Beauty’s gross profit totaled $1,091.7 million, up 11.6% from $978.2 million. Moreover, as a percentage of net sales, gross profit expanded 39.2% from 38.3%. This increase was driven by reduced inventory shrinkage and elevated merchandise margin, partially offset by deleverage in supply-chain costs, along with lower other revenues. We anticipated the gross margin to contract 30 bps.
Selling, general and administrative (SG&A) expenses increased 15% to $741.7 million from $644.8 million reported in the prior-year quarter. As a percentage of net sales, SG&A expenses increased to 26.6% from 25.3%. This increase was due to the increased incentive compensation, store payroll and benefits, and corporate overhead.
Operating income was $344.9 million compared with $329.2 million in the prior-year quarter. As a percentage of net sales, operating income was 12.4%, down from 12.9% in the year-ago period. We expected an operating margin of 10.8%.
ULTA’s Financial Health Snapshot & Store Update
This Zacks Rank #2 (Buy) company ended the quarter with cash and cash equivalents of $242.7 million. Net merchandise inventories were $2,407.1 million at the end of the reported quarter. Stockholders’ equity at the end of the quarter was $2,603.9 million. Net cash provided by operating activities was $316.5 million for the 26 weeks ended Aug. 2, 2025.
The company repurchased 244,559 shares for $109.5 million in the quarter. In the first six months of fiscal 2025, repurchases totaled 1.2 million shares at a cost of $468.3 million. As of Aug. 2, 2025, Ulta Beauty had shares worth $2.2 billion left under its $3 billion 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 24 stores, relocated two stores, remodeled five stores and closed two stores. It ended the fiscal second quarter with 1,473 stores, totaling 15.4 million square feet across the United States, excluding the 83 stores in the United Kingdom and Ireland operated by Space NK. For fiscal 2025, ULTA now expects almost 63 net new stores, along with 43-48 store remodeling and relocation projects. Earlier, it anticipated approximately 60 net new stores and 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 $12-$12.1 billion, up from its prior outlook of $11.5-$11.7 billion. The company reported net sales of $11.3 billion in fiscal 2024. Comparable sales are now expected to be 2.5% to 3.5% year over year. Earlier, it anticipated comparable sales to be flat to up 1.5%.
Management now expects an operating margin between 11.9% and 12% in fiscal 2025, up from its prior outlook of 11.7% and 11.8%. Earnings per share are now envisioned to be in the range of $23.85-$24.30, up from the earlier range of $22.65-$23.20. Ulta Beauty’s earnings were $25.34 per share in fiscal 2024.
The stock has risen 12.5% in the past three months compared with the industry’s growth of 23.2%.
Image Source: Zacks Investment Research
Other Key Picks
Levi Strauss & Co. ((LEVI - Free Report) ) designs, markets, and sells apparels and related accessories for men, women, and children in the United States and internationally. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Levi’s current fiscal-year earnings indicates growth of 4% from the year-ago actual. LEVI delivered a trailing four-quarter average earnings surprise of 25.9%.
Wolverine World Wide, Inc. ((WWW - Free Report) ) designs, manufactures, sources, markets, licenses, and distributes footwear, apparel, and accessories. It currently sports a Zacks Rank of 1. WWW delivered a trailing four-quarter average earnings surprise of 39.1%.
The Zacks Consensus Estimate for Wolverine’s current fiscal-year earnings and sales indicates growth of 46.2% and 6.5%, respectively, from the year-ago actuals.
Sally Beauty Holdings, Inc. ((SBH - Free Report) ) operates as a specialty retailer and distributor of professional beauty supplies. It currently holds a Zacks Rank of 2. SBH delivered a trailing four-quarter average earnings surprise of 8.3%.
The Zacks Consensus Estimate for Sally Beauty’s current fiscal-year earnings indicates growth of 8.9%, from the year-ago actuals.