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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ulta Beauty Inc | NASDAQ:ULTA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
9.53 | 2.47% | 395.11 | 380.27 | 395.56 | 421.21 | 382.12 | 421.21 | 3,377,785 | 01:00:00 |
Net Sales of $2.0 Billion Compared to $1.2 Billion in the Year-Ago Quarter
Comparable Sales Increased 56.3%
Net Income of $250.9 Million or $4.56 Per Diluted Share
Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period (“second quarter”) and twenty-six-week period (“first six months”) ended July 31, 2021 compared to the same periods ended August 1, 2020.
13 Weeks Ended
July 31,
August 1,
August 3,
(Dollars in millions)
2021
2020
2019
Net sales
$
1,967.2
$
1,228.0
$
1,666.6
Comparable sales
56.3%
(26.7)%
6.2%
Gross profit (as a percentage of net sales)
40.6%
26.8%
36.4%
Selling, general and administrative expenses
$
464.3
$
271.6
$
392.8
Operating income (as a percentage of net sales)
16.9%
1.1%
12.5%
Diluted earnings per share
$
4.56
$
0.14
$
2.76
New store openings, net
6
—
17
“The Ulta Beauty team delivered strong results for the second quarter. This performance reflects the recovery of the beauty category, investments and choices we’ve made over the last year to adapt to the market disruption and strengthen our leadership position, and the ongoing efforts of our associates to deliver great experiences for our guests,” said Dave Kimbell, chief executive officer. “Our value proposition is strong, and we are evolving and innovating to lead in the new beauty landscape, capture additional market share, and drive profitable growth.”
For the Second Quarter of Fiscal 2021
For the First Six Months of Fiscal 2021
Balance Sheet
Cash and cash equivalents at the end of the second quarter of fiscal 2021 were $770.1 million.
Merchandise inventories, net at the end of the second quarter of fiscal 2021 totaled $1.44 billion compared to $1.37 billion at the end of the second quarter of fiscal 2020. The $75.14 million increase in inventory was primarily due to the addition of 32 net new stores opened since August 1, 2020, the opening of the Jacksonville, FL fast fulfillment center, and increased purchases to support strong demand.
Share Repurchase Program
During the second quarter of fiscal 2021, the Company repurchased 746,367 shares of its common stock at a cost of $243.5 million. During the first six months of fiscal 2021, the Company repurchased 1,989,576 shares of its common stock at a cost of $635.8 million. As of July 31, 2021, $886.2 million remained available under the $1.6 billion share repurchase program announced in March 2020.
Store Update
Real estate activity in the second quarter of fiscal 2021 included 7 new stores located in Dyersburg, TN; Gig Harbor, WA; Little Rock, AR; Richmond, TX; Staten Island, NY; Sunnyvale, CA; and Troy, AL. In addition, the Company relocated one store, remodeled five stores, and closed one store. In the first six months of fiscal 2021, the Company opened 35 new stores, relocated two stores, remodeled five stores, and closed three stores.
The second quarter of fiscal 2021 ended with 1,296 stores and square footage of 13.6 million, representing a 2.7% increase in square footage compared to the second quarter of fiscal 2020.
Fiscal 2021 Outlook
Based on the results for the first six months of fiscal 2021 and revised expectations for consumer demand, the Company has increased its outlook for fiscal 2021.
The Company’s updated outlook for fiscal 2021 is as follows:
Prior FY21 Outlook
Updated FY21 Outlook
Net sales
$7.7 billion to $7.8 billion
$8.1 billion to $8.3 billion
Comparable sales
23% to 25%
30% to 32%
New stores, net
40
44
Remodel and relocation projects
19
18
Operating margin
approximately 11%
approximately 13%
Diluted earnings per share
$11.50 to $11.95
$14.50 to $14.70
Share repurchases
approximately $850 million
no change
Effective tax rate
24.8%
no change
Capital expenditures
$225 million to $250 million
no change
Depreciation and amortization expense
$270 million to $280 million
no change
The Company’s outlook for fiscal 2021 assumes no material increases in the federal minimum wage and does not include assumptions for any impact related to a resurgence of COVID-19.
Non-GAAP Financial Information
In this press release, the Company provides information regarding adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings (loss) per share, which are not recognized terms under U.S. generally accepted accounting principles (GAAP) and do not purport to be alternatives to operating income (loss), net income (loss), and diluted earnings (loss) per share as measures of operating performance. A reconciliation of adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings (loss) per share is provided in this release. The Company believes the presentation of these non-GAAP financial measures provides additional information on comparisons between periods by excluding certain items that affect overall comparability and provides investors with enhanced visibility into its results with respect to the impact of certain costs. Non-GAAP financial measures should be considered in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
Conference Call Information
A conference call to discuss second quarter of fiscal 2021 results is scheduled for today, August 25, 2021, 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) 705‑6003. The conference call will also be webcast live at http://ir.ultabeauty.com. 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 September 8, 2021 and can be accessed by dialing (844) 512‑2921 and entering conference ID number 13721889.
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 1,296 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:
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 Operations
(In thousands, except per share data)
13 Weeks Ended
July 31,
August 1,
2021
2020
(Unaudited)
(Unaudited)
Net sales
$
1,967,207
100.0%
$
1,228,009
100.0%
Cost of sales
1,169,244
59.4%
899,002
73.2%
Gross profit
797,963
40.6%
329,007
26.8%
Selling, general and administrative expenses
464,299
23.6%
271,587
22.1%
Impairment, restructuring and other costs
—
0.0%
40,758
3.3%
Pre-opening expenses
1,357
0.1%
3,907
0.3%
Operating income
332,307
16.9%
12,755
1.1%
Interest expense, net
425
0.0%
2,617
0.2%
Income before income taxes
331,882
16.9%
10,138
0.9%
Income tax expense
80,989
4.1%
2,086
0.2%
Net income
$
250,893
12.8%
$
8,052
0.7%
Net income per common share:
Basic
$
4.59
$
0.14
Diluted
$
4.56
$
0.14
Weighted average common shares outstanding:
Basic
54,675
56,318
Diluted
55,014
56,497
Exhibit 2
Ulta Beauty, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
26 Weeks Ended
July 31,
August 1,
2021
2020
(Unaudited)
(Unaudited)
Net sales
$
3,905,726
100.0%
$
2,401,219
100.0%
Cost of sales
2,353,975
60.3%
1,768,607
73.7%
Gross profit
1,551,751
39.7%
632,612
26.3%
Selling, general and administrative expenses
908,174
23.3%
652,499
27.2%
Impairment, restructuring and other costs
—
0.0%
60,300
2.5%
Pre-opening expenses
5,946
0.1%
8,542
0.3%
Operating income (loss)
637,631
16.3%
(88,729)
(3.7)%
Interest expense, net
783
0.0%
3,889
0.1%
Income (loss) before income taxes
636,848
16.3%
(92,618)
(3.8)%
Income tax expense (benefit)
155,666
4.0%
(22,161)
(0.9)%
Net income (loss)
$
481,182
12.3%
$
(70,457)
(2.9)%
Net income (loss) per common share:
Basic
$
8.71
$
(1.25)
Diluted
$
8.66
$
(1.25)
Weighted average common shares outstanding:
Basic
55,235
56,369
Diluted
55,592
56,369
Exhibit 3
Ulta Beauty, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
July 31,
January 30,
August 1,
2021
2021
2020
(Unaudited)
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
770,144
$
1,046,051
$
1,157,318
Receivables, net
154,416
193,109
127,992
Merchandise inventories, net
1,443,685
1,168,215
1,368,543
Prepaid expenses and other current assets
108,145
107,402
102,713
Prepaid income taxes
18,544
—
42,622
Total current assets
2,494,934
2,514,777
2,799,188
Property and equipment, net
909,507
995,795
1,077,825
Operating lease assets
1,470,166
1,504,614
1,548,239
Goodwill
10,870
10,870
10,870
Other intangible assets, net
2,001
2,465
2,927
Deferred compensation plan assets
36,396
33,223
28,789
Other long-term assets
30,711
28,225
29,283
Total assets
$
4,954,585
$
5,089,969
$
5,497,121
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
535,257
$
477,052
$
398,011
Accrued liabilities
313,372
296,334
201,754
Deferred revenue
265,462
274,383
216,545
Current operating lease liabilities
267,442
253,415
245,019
Accrued income taxes
—
42,529
—
Total current liabilities
1,381,533
1,343,713
1,061,329
Non-current operating lease liabilities
1,585,539
1,643,386
1,718,549
Long-term debt
—
—
800,000
Deferred income taxes
64,535
65,359
94,272
Other long-term liabilities
43,165
37,962
52,178
Total liabilities
3,074,772
3,090,420
3,726,328
Commitments and contingencies
Total stockholders’ equity
1,879,813
1,999,549
1,770,793
Total liabilities and stockholders’ equity
$
4,954,585
$
5,089,969
$
5,497,121
Exhibit 4
Ulta Beauty, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
26 Weeks Ended
July 31,
August 1,
2021
2020
(Unaudited)
(Unaudited)
Operating activities
Net income (loss)
$
481,182
$
(70,457)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
139,577
154,029
Non-cash lease expense
137,521
132,808
Long-lived asset impairment charge
—
59,997
Deferred income taxes
(824)
4,905
Stock-based compensation expense
19,097
14,595
Loss on disposal of property and equipment
1,703
2,273
Change in operating assets and liabilities:
Receivables
38,693
11,345
Merchandise inventories
(275,470)
(74,842)
Prepaid expenses and other current assets
(741)
854
Income taxes
(61,074)
(26,235)
Accounts payable
59,360
(18,486)
Accrued liabilities
17,858
(32,901)
Deferred revenue
(8,921)
(20,990)
Operating lease liabilities
(146,892)
(137,383)
Other assets and liabilities
344
16,477
Net cash provided by operating activities
401,413
15,989
Investing activities
Short-term investments, net
—
110,000
Capital expenditures
(57,305)
(77,090)
Acquisitions, net of cash acquired
—
(1,220)
Purchases of equity investments
—
(5,386)
Net cash provided by (used in) investing activities
(57,305)
26,304
Financing activities
Proceeds from long-term debt
—
800,000
Repurchase of common shares
(635,793)
(72,981)
Stock options exercised
22,808
577
Purchase of treasury shares
(6,974)
(3,065)
Debt issuance costs
—
(1,861)
Net cash provided by (used in) financing activities
(619,959)
722,670
Effect of exchange rate changes on cash and cash equivalents
(56)
30
Net increase (decrease) in cash and cash equivalents
(275,907)
764,993
Cash and cash equivalents at beginning of period
1,046,051
392,325
Cash and cash equivalents at end of period
$
770,144
$
1,157,318
Exhibit 5
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 2021
quarter
quarter
quarter
end of the quarter
1st Quarter
1,264
28
2
1,290
2nd Quarter
1,290
7
1
1,296
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 2021
the quarter
quarter
during the quarter
quarter
1st Quarter
13,291,838
327,476
22,906
13,596,408
2nd Quarter
13,596,408
62,511
10,760
13,648,159
Exhibit 6
Ulta Beauty, Inc.
Sales by Category
The following tables set forth the approximate percentage of net sales by primary category:
13 weeks ended
July 31,
August 1,
2021
2020
Cosmetics (1)
43%
45%
Skincare (1)
17%
18%
Haircare products and styling tools (1)
21%
21%
Fragrance and bath
12%
9%
Services
4%
3%
Accessories and other (1)
3%
4%
100%
100%
26 weeks ended
July 31,
August 1,
2021
2020
Cosmetics (1)
44%
47%
Skincare (1)
18%
18%
Haircare products and styling tools (1)
20%
19%
Fragrance and bath
11%
8%
Services
4%
4%
Accessories and other (1)
3%
4%
100%
100%
(1) Certain sales departments were reclassified between categories in the prior year to conform to current year presentation.
Exhibit 7
Ulta Beauty, Inc.
Reconciliation of GAAP basis to Adjusted operating income (loss), Adjusted net income (loss)
and Adjusted diluted earnings (loss) per share
(In thousands, except per share data)
(Unaudited)
13 weeks ended
26 weeks ended
August 1,
August 1,
2020
2020
Operating income (loss)
$
12,755
$
(88,729)
Add: Store asset impairment
20,886
40,428
Add: Store closures
19,872
19,872
Add: Store closures - inventory write-off
1,400
1,400
Adjusted operating income (loss)
$
54,913
$
(27,029)
Net income (loss)
$
8,052
$
(70,457)
Add: Store asset impairment
20,886
40,428
Less: Income tax benefit of store asset impairment1
(4,303)
(9,662)
Add: Store closures
19,872
19,872
Less: Income tax benefit of store closures1
(4,094)
(4,749)
Add: Store closures - inventory write-off
1,400
1,400
Less: Income tax benefit of store closures - inventory write-off1
(288)
(335)
Adjusted net income (loss)
$
41,525
$
(23,503)
Diluted earnings (loss) per share
$
0.14
$
(1.25)
Add: Store asset impairment
0.37
0.72
Less: Income tax benefit of store asset impairment1
(0.08)
(0.17)
Add: Store closures
0.35
0.35
Less: Income tax benefit of store closures1
(0.07)
(0.09)
Add: Store closures - inventory write-off
0.03
0.03
Less: Income tax benefit of store closures - inventory write-off1
(0.01)
(0.01)
Adjusted diluted earnings (loss) per share
$
0.73
$
(0.42)
1 The income tax benefit for non-GAAP adjustments was calculated using the Company's blended tax rate before discrete items.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210825005731/en/
Investor Contacts: Kiley Rawlins, CFA Vice President, Investor Relations krawlins@ulta.com (331) 757-2206
Media Contact: Eileen Ziesemer Vice President, Public Relations eziesemer@ulta.com (708) 305-4479
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