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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 | |
---|---|---|---|---|---|---|---|---|---|---|
1.96 | 0.49% | 399.285 | 399.20 | 399.42 | 404.51 | 398.24 | 402.50 | 240,654 | 18:20:21 |
Net Sales Increased 12.0%
Comparable Sales Increased 6.2%
Diluted EPS Increased 12.2% to $2.76
Company Updates Fiscal 2019 Guidance
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 August 3, 2019 compared to the same periods ended August 4, 2018.
“The Ulta Beauty team delivered another quarter of solid top-line performance, gross margin expansion, and double-digit earnings growth,” said Mary Dillon, Chief Executive Officer. “Looking forward, we have updated our fiscal 2019 outlook to reflect the headwinds we are currently seeing in the US cosmetics market. We remain confident that our guest-centric, differentiated business model will drive continued market share gains and strong returns for our shareholders over the long term.”
For the Second Quarter of Fiscal 2019
For the First Six Months of Fiscal 2019
Balance Sheet
Merchandise inventories, net at the end of the second quarter of fiscal 2019 totaled $1,316.0 million compared to $1,219.7 million at the end of the second quarter of fiscal 2018, representing an increase of $96.3 million. The increase in total inventory was driven by 89 net new stores. Average inventory per store was flat compared to the second quarter of fiscal 2018.
The Company ended the second quarter of fiscal 2019 with $327.4 million in cash and cash equivalents and short-term investments.
Recent Accounting Pronouncement – Leases
On February 3, 2019, the Company adopted Accounting Standards Codification (ASC) 842 using the modified retrospective approach. The new standard requires leases to be recorded on the balance sheet as lease liabilities with corresponding right-of-use assets. Upon adoption, the Company recognized and measured leases without revising comparative period information or disclosures. The adoption of ASC 842 resulted in the recording of operating lease assets and liabilities of $1.46 billion and $1.84 billion, respectively, as of February 3, 2019. As part of the adoption, the Company recorded an adjustment to retained earnings of $2.4 million.
Share Repurchase Program
During the second quarter of fiscal 2019, the Company repurchased 791,603 shares of its common stock at a cost of $270.9 million. During the first six months of fiscal 2019, the Company repurchased 1,110,034 shares of its common stock at a cost of $378.3 million. As of August 3, 2019, $517.3 million remained available under the $875.0 million share repurchase program announced in March 2019.
Store Expansion
During the second quarter of fiscal 2019, the Company opened 20 stores located in Bridgehampton, NY; Buena Park, CA; Collierville, TN; Colorado Springs, CO; Dallas, TX; Granbury, TX; Hamden, CT; Hilliard, OH; Lewiston, ID; Moses Lake, WA; Porter Ranch, CA; Reno, NV; Rio Grande, NJ; San Antonio, TX; San Ramon, CA; Sugar Land, TX; Terrell, TX; Trinity, FL; Troy, MI; and Wylie, TX. In addition, the Company closed three stores.
The Company ended the second quarter of fiscal 2019 with 1,213 stores and square footage of 12,753,598, representing a 7.9% increase in square footage compared to the second quarter of fiscal 2018.
Outlook
The Company has updated its fiscal 2019 outlook to reflect anticipated industry-wide sales headwinds in cosmetics and currently expects to:
As previously discussed, to more closely align with industry practices the Company no longer provides a quarterly outlook. The Company will continue to provide an annual outlook, which it will update on a quarterly basis, as appropriate.
Conference Call Information
A conference call to discuss second quarter of fiscal 2019 results is scheduled for today, August 29, 2019, at 5:00 p.m. Eastern Time / 4:00 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 12, 2019 and can be accessed by dialing (844) 512‑2921 and entering conference ID number 13693346.
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 has grown to become the top national retailer offering the complete beauty experience.
Ulta Beauty brings possibilities to life through the power of beauty each and every day in our stores and online with more than 25,000 products from approximately 500 well-established and emerging beauty brands across all categories and price points, including Ulta Beauty’s own private label. Ulta Beauty also offers a full-service salon in every store featuring hair, skin, brow, and make-up services.
Ulta Beauty is recognized for its commitment to personalized service, fun and inviting stores and our industry-leading Ultamate Rewards loyalty program. As of August 3, 2019, Ulta Beauty operates 1,213 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.
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 our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements 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 our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates, targets, strategies or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation: changes in the overall level of consumer spending and volatility in the economy; the possibility that we may be unable to compete effectively in our highly competitive markets; the possibility that the capacity of our distribution and order fulfillment infrastructure and the performance of our newly opened and to be opened distribution centers may not be adequate to support our recent growth and expected future growth plans; our ability to sustain our growth plans and successfully implement our long-range strategic and financial plan; the ability to execute our Efficiencies for Growth cost optimization program; the possibility that cybersecurity breaches and other disruptions could compromise our information or result in the unauthorized disclosure of confidential information; the possibility of material disruptions to our information systems; our ability to gauge beauty trends and react to changing consumer preferences in a timely manner; changes in the wholesale cost of our products; the possibility that new store openings and existing locations may be impacted by developer or co-tenant issues; our ability to attract and retain key executive personnel; natural disasters that could negatively impact sales; our ability to successfully execute our common stock repurchase program or implement future common stock repurchase programs; and other risk factors detailed in our public filings with the Securities and Exchange Commission (the “SEC”), including risk factors contained in our Annual Report on Form 10‑K for the fiscal year ended February 2, 2019, as such may be amended or supplemented in our subsequently filed Quarterly Reports on Form 10‑Q. Our 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 Income
(In thousands, except per share data)
13 Weeks Ended
August 3,
August 4,
2019
2018
(Unaudited)
(Unaudited)
Net sales
$
1,666,607
100.0
%
$
1,488,221
100.0
%
Cost of sales
1,060,708
63.6
%
952,760
64.0
%
Gross profit
605,899
36.4
%
535,461
36.0
%
Selling, general and administrative expenses
392,843
23.6
%
337,142
22.7
%
Pre-opening expenses
5,038
0.3
%
4,504
0.3
%
Operating income
208,018
12.5
%
193,815
13.0
%
Interest income, net
(1,671
)
0.1
%
(1,143
)
0.1
%
Income before income taxes
209,689
12.6
%
194,958
13.1
%
Income tax expense
48,431
2.9
%
46,635
3.1
%
Net income
$
161,258
9.7
%
$
148,323
10.0
%
Net income per common share:
Basic
$
2.77
$
2.47
Diluted
$
2.76
$
2.46
Weighted average common shares outstanding:
Basic
58,171
60,070
Diluted
58,446
60,375
Exhibit 2
Ulta Beauty, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
26 Weeks Ended
August 3,
August 4,
2019
2018
(Unaudited)
(Unaudited)
Net sales
$
3,409,636
100.0
%
$
3,031,888
100.0
%
Cost of sales
2,158,890
63.3
%
1,935,714
63.8
%
Gross profit
1,250,746
36.7
%
1,096,174
36.2
%
Selling, general and administrative expenses
795,976
23.3
%
682,766
22.5
%
Pre-opening expenses
9,212
0.3
%
9,751
0.3
%
Operating income
445,558
13.1
%
403,657
13.3
%
Interest income, net
(3,717
)
0.1
%
(2,468
)
0.1
%
Income before income taxes
449,275
13.2
%
406,125
13.4
%
Income tax expense
95,796
2.8
%
93,406
3.1
%
Net income
$
353,479
10.4
%
$
312,719
10.3
%
Net income per common share:
Basic
$
6.05
$
5.18
Diluted
$
6.02
$
5.16
Weighted average common shares outstanding:
Basic
58,401
60,340
Diluted
58,718
60,630
Exhibit 3
Ulta Beauty, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
August 3,
February 2,
August 4,
2019
2019
2018
(Unaudited)
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
177,398
$
409,251
$
237,107
Short-term investments
150,000
—
149,000
Receivables, net
107,263
136,168
103,666
Merchandise inventories, net
1,315,999
1,214,329
1,219,685
Prepaid expenses and other current assets
131,171
138,116
103,618
Prepaid income taxes
38,769
16,997
17,082
Total current assets
1,920,600
1,914,861
1,830,158
Property and equipment, net
1,219,948
1,226,029
1,212,978
Operating lease assets
1,499,556
—
—
Goodwill
10,870
10,870
—
Other intangible assets, net
3,854
4,317
—
Deferred compensation plan assets
24,665
20,511
19,585
Other long-term assets
30,882
14,584
10,628
Total assets
$
4,710,375
$
3,191,172
$
3,073,349
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
450,117
$
404,016
$
409,849
Accrued liabilities
224,202
220,666
202,999
Deferred revenue
182,354
199,054
145,907
Current operating lease liabilities
208,261
—
—
Total current liabilities
1,064,934
823,736
758,755
Non-current operating lease liabilities
1,683,743
—
—
Deferred rent
—
434,980
422,455
Deferred income taxes
86,598
83,864
49,700
Other long-term liabilities
35,649
28,374
29,961
Total liabilities
2,870,924
1,370,954
1,260,871
Commitments and contingencies
Total stockholders’ equity
1,839,451
1,820,218
1,812,478
Total liabilities and stockholders’ equity
$
4,710,375
$
3,191,172
$
3,073,349
Exhibit 4
Ulta Beauty, Inc.
Consolidated Statements of Cash Flows
(In thousands)
26 Weeks Ended
August 3,
August 4,
2019
2018
(Unaudited)
(Unaudited)
Operating activities
Net income
$
353,479
$
312,719
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
144,951
137,815
Non-cash lease expense
152,134
—
Deferred income taxes
2,734
612
Stock-based compensation expense
12,766
13,172
Loss on disposal of property and equipment
3,215
499
Change in operating assets and liabilities:
Receivables
11,437
(3,947
)
Merchandise inventories
(101,670
)
(123,261
)
Prepaid expenses and other current assets
(18,315
)
(4,952
)
Income taxes
(21,772
)
(29,694
)
Accounts payable
46,101
84,091
Accrued liabilities
(2,629
)
(6,572
)
Deferred revenue
(16,700
)
(6,577
)
Operating lease liabilities
(138,557
)
—
Deferred rent
—
14,539
Other assets and liabilities
20,162
(441
)
Net cash provided by operating activities
447,336
388,003
Investing activities
Purchases of short-term investments
(245,000
)
(558,163
)
Proceeds from short-term investments
95,000
529,163
Purchases of property and equipment
(151,213
)
(141,691
)
Purchases of equity investments
(33,339
)
—
Net cash used in investing activities
(334,552
)
(170,691
)
Financing activities
Repurchase of common shares
(378,300
)
(260,452
)
Stock options exercised
42,935
8,448
Purchase of treasury shares
(9,272
)
(5,646
)
Net cash used in financing activities
(344,637
)
(257,650
)
Net decrease in cash and cash equivalents
(231,853
)
(40,338
)
Cash and cash equivalents at beginning of period
409,251
277,445
Cash and cash equivalents at end of period
$
177,398
$
237,107
Exhibit 5
2019 Store Expansion
Total stores open
Number of stores
Number of stores
Total stores
at beginning of the
opened during the
closed during the
open at
Fiscal 2019
quarter
quarter
quarter
end of the quarter
1st Quarter
1,174
22
0
1,196
2nd Quarter
1,196
20
3
1,213
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 2019
the quarter
quarter
during the quarter
quarter
1st Quarter
12,337,145
236,596
0
12,573,741
2nd Quarter
12,573,741
209,469
29,612
12,753,598
View source version on businesswire.com: https://www.businesswire.com/news/home/20190829005711/en/
Investor Contacts: Kiley Rawlins, CFA Vice President, Investor Relations krawlins@ulta.com (331) 757-2206
Patrick Flaherty Senior Manager, Investor Relations pflaherty@ulta.com (331) 253-3521
Media Contact: Karen May Director, Public Relations (630) 410-5457
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