Ulta Beauty Reports Q3 Fiscal 2024 Results with 1.7% Sales Increase

Ulta Beauty, Inc. reported its financial results for the third quarter of fiscal 2024, revealing a net sales increase of $41.2 million, or 1.7%, to $2.53 billion compared to $2.49 billion in the same period last year. The company's gross profit rose to $1.01 billion, reflecting a 1.4% increase, although the gross profit margin slightly decreased to 39.7% from 39.9%. Net income for the quarter was $242.2 million, down from $249.5 million in the prior year, primarily due to a $20.9 million rise in selling, general and administrative (SG&A) expenses.

For the first 39 weeks of fiscal 2024, Ulta's net sales reached $7.81 billion, a 2.0% increase from $7.65 billion in the same period of the previous year. The comparable sales growth was modest at 0.3%, driven by an increase in average ticket size. Gross profit for the year-to-date period was $3.05 billion, with a gross profit margin of 39.1%, down from 39.7% in the prior year. The company reported a net income of $807.8 million, a decrease from $896.6 million, attributed to higher SG&A and pre-opening expenses.

Operationally, Ulta Beauty expanded its footprint, operating 1,437 stores across 50 states as of November 2, 2024, an increase from 1,374 stores a year earlier. The company opened 57 new stores during the first 39 weeks of the fiscal year, compared to 20 new stores in the same period last year. The increase in store count contributed to the overall sales growth, although the company also faced challenges with rising operational costs and inflationary pressures impacting consumer spending.

The filing highlighted strategic initiatives, including ongoing investments in technology and supply chain improvements, aimed at enhancing customer experience and operational efficiency. The company also noted a significant increase in SG&A expenses, which rose to $2.0 billion for the first 39 weeks, reflecting investments in corporate overhead and store payroll. Despite these challenges, Ulta remains focused on its long-term growth strategy, which includes expanding its omnichannel capabilities and enhancing its loyalty program.

Looking ahead, Ulta Beauty anticipates continued pressure from macroeconomic conditions, including inflation and changing consumer spending habits. The company is committed to executing its strategic priorities while navigating these challenges, with a focus on maintaining market share and profitability. The outlook remains cautious, as the company prepares for the critical holiday season, which historically accounts for a significant portion of its annual sales.