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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 399.56 | 394.50 | 403.00 | 0 | 10:01:19 |
Net Sales Increased 7.9% Comparable Sales Increased 3.2% Diluted EPS Increased 3.2% to $2.25 Company Updates Fiscal 2019 Guidance
Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period (“Third Quarter”) and thirty-nine week period (“First Nine Months”) ended November 2, 2019 compared to the same periods ended November 3, 2018.
“Our differentiated model is winning in the marketplace,” said Mary Dillon, Chief Executive Officer. “The Ulta Beauty team delivered another quarter of solid top-line performance, gross margin expansion, and EPS growth, despite the current challenges facing the U.S. cosmetics category. We continue to gain market share across all major beauty categories, and we are extending our leadership position by creating stronger connections with our guests and engaging with them in better and more exciting ways.”
For the Third Quarter of Fiscal 2019
For the First Nine Months of Fiscal 2019
Balance Sheet
Merchandise inventories, net at the end of the third quarter of fiscal 2019 totaled $1,616.9 million compared to $1,484.6 million at the end of the third quarter of fiscal 2018, representing an increase of $132.4 million. The increase in total inventory was driven by 78 net new stores and timing of shipments ahead of the holiday season. Average inventory per store increased 2.1% compared to the third quarter of fiscal 2018.
The Company ended the third quarter of fiscal 2019 with $208.8 million in cash and cash equivalents.
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 third quarter of fiscal 2019, the Company repurchased 529,404 shares of its common stock at a cost of $128.6 million. During the first nine months of fiscal 2019, the Company repurchased 1,639,438 shares of its common stock at a cost of $506.9 million. As of November 2, 2019, $388.8 million remained available under the $875.0 million share repurchase program announced in March 2019.
Store Expansion
During the third quarter of fiscal 2019, the Company opened 31 stores located in Albuquerque, NM; Bethlehem, GA; Cleveland, TN; Columbus, OH; Conroe, TX; Davenport, FL; El Segundo, CA; Georgetown, TX; Germantown, TN; Grand Rapids, MI; Jacksonville, NC; Jeffersonville, IN; Johns Creek, GA; Kearny, NJ; Lake Stevens, WA; Lakewood, WA; Matthews, NC; Millbury, MA; Parsippany, NJ; Pasadena, MD; Perris, CA; Philadelphia, PA; Raleigh, NC; Shirley, NY; Southfield, MI; Topeka, KS; Wareham, MA; West Mifflin, PA; Wheat Ridge, CO; Williamsville, NY; and Yuma, AZ. In addition, the Company closed three stores.
The Company ended the third quarter of fiscal 2019 with 1,241 stores and square footage of 13,061,791, representing a 6.9% increase in square footage compared to the third quarter of fiscal 2018.
Outlook
The Company has updated its fiscal 2019 outlook and now 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 third quarter of fiscal 2019 results is scheduled for today, December 5, 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 December 19, 2019 and can be accessed by dialing (844) 512‑2921 and entering conference ID number 13696497.
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 November 2, 2019, Ulta Beauty operates 1,241 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
November 2,
November 3,
2019
2018
(Unaudited)
(Unaudited)
Net sales
$
1,682,514
100.0%
$
1,560,011
100.0%
Cost of sales
1,059,081
62.9%
987,733
63.3%
Gross profit
623,433
37.1%
572,278
36.7%
Selling, general and administrative expenses
449,198
26.7%
395,453
25.3%
Pre-opening expenses
6,455
0.4%
7,612
0.5%
Operating income
167,780
10.0%
169,213
10.8%
Interest income, net
(900)
0.1%
(1,318)
0.1%
Income before income taxes
168,680
10.1%
170,531
10.9%
Income tax expense
38,933
2.3%
39,365
2.5%
Net income
$
129,747
7.7%
$
131,166
8.4%
Net income per common share:
Basic
$
2.25
$
2.20
Diluted
$
2.25
$
2.18
Weighted average common shares outstanding:
Basic
57,568
59,724
Diluted
57,763
60,062
Exhibit 2
Ulta Beauty, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
39 Weeks Ended
November 2,
November 3,
2019
2018
(Unaudited)
(Unaudited)
Net sales
$
5,092,150
100.0%
$
4,591,899
100.0%
Cost of sales
3,217,971
63.2%
2,923,447
63.7%
Gross profit
1,874,179
36.8%
1,668,452
36.3%
Selling, general and administrative expenses
1,245,174
24.5%
1,078,219
23.5%
Pre-opening expenses
15,667
0.3%
17,363
0.4%
Operating income
613,338
12.0%
572,870
12.5%
Interest income, net
(4,617)
0.1%
(3,786)
0.1%
Income before income taxes
617,955
12.1%
576,656
12.6%
Income tax expense
134,729
2.6%
132,771
2.9%
Net income
$
483,226
9.5%
$
443,885
9.7%
Net income per common share:
Basic
$
8.31
$
7.38
Diluted
$
8.27
$
7.35
Weighted average common shares outstanding:
Basic
58,123
60,135
Diluted
58,396
60,432
Exhibit 3
Ulta Beauty, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
November 2,
February 2,
November 3,
2019
2019
2018
(Unaudited)
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
208,843
$
409,251
$
296,944
Receivables, net
112,888
136,168
102,353
Merchandise inventories, net
1,616,920
1,214,329
1,484,565
Prepaid expenses and other current assets
118,343
138,116
119,817
Prepaid income taxes
40,474
16,997
22,294
Total current assets
2,097,468
1,914,861
2,025,973
Property and equipment, net
1,233,412
1,226,029
1,257,775
Operating lease assets
1,529,524
—
—
Goodwill
10,870
10,870
9,084
Other intangible assets, net
3,622
4,317
6,985
Deferred compensation plan assets
26,269
20,511
21,397
Other long-term assets
27,683
14,584
11,477
Total assets
$
4,928,848
$
3,191,172
$
3,332,691
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
594,993
$
404,016
$
574,480
Accrued liabilities
249,112
220,666
255,156
Deferred revenue
190,188
199,054
154,447
Current operating lease liabilities
222,627
—
—
Total current liabilities
1,256,920
823,736
984,083
Non-current operating lease liabilities
1,706,806
—
—
Deferred rent
—
434,980
432,052
Deferred income taxes
83,856
83,864
50,045
Other long-term liabilities
34,110
28,374
30,775
Total liabilities
3,081,692
1,370,954
1,496,955
Commitments and contingencies
Total stockholders’ equity
1,847,156
1,820,218
1,835,736
Total liabilities and stockholders’ equity
$
4,928,848
$
3,191,172
$
3,332,691
Exhibit 4
Ulta Beauty, Inc.
Consolidated Statements of Cash Flows
(In thousands)
39 Weeks Ended
November 2,
November 3,
2019
2018
(Unaudited)
(Unaudited)
Operating activities
Net income
$
483,226
$
443,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
219,207
207,652
Non-cash lease expense
219,220
—
Deferred income taxes
(8)
(408)
Stock-based compensation expense
19,108
20,308
Loss on disposal of property and equipment
4,821
1,339
Change in operating assets and liabilities:
Receivables
5,812
(2,594)
Merchandise inventories
(402,591)
(388,141)
Prepaid expenses and other current assets
(5,487)
(19,603)
Income taxes
(23,477)
(34,906)
Accounts payable
190,977
248,719
Accrued liabilities
23,109
42,151
Deferred revenue
(8,866)
1,963
Operating lease liabilities
(198,181)
—
Deferred rent
—
24,136
Other assets and liabilities
30,636
(2,287)
Net cash provided by operating activities
557,506
542,214
Investing activities
Purchases of short-term investments
(245,000)
(386,193)
Proceeds from short-term investments
245,000
506,193
Purchases of property and equipment
(241,136)
(256,415)
Acquisitions, net of cash acquired
—
(13,606)
Purchases of equity investments
(43,757)
—
Net cash used in investing activities
(284,893)
(150,021)
Financing activities
Repurchase of common shares
(506,868)
(379,423)
Stock options exercised
43,211
12,668
Purchase of treasury shares
(9,364)
(5,939)
Net cash used in financing activities
(473,021)
(372,694)
Net increase (decrease) in cash and cash equivalents
(200,408)
19,499
Cash and cash equivalents at beginning of period
409,251
277,445
Cash and cash equivalents at end of period
$
208,843
$
296,944
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
3rd Quarter
1,213
31
3
1,241
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
3rd Quarter
12,753,598
339,469
31,276
13,061,791
View source version on businesswire.com: https://www.businesswire.com/news/home/20191205005817/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: Olivia Mata Senior Manager, Public Relations (630) 410-5408
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