Ulta Beauty (ULTA) Q4 2021 Earnings
Includes a $0.05 benefit due to income tax accounting for stock-based compensation
Did ULTA Beat Earnings? Q4 2021 Results
Yes. Ulta Beauty reported Q4 2021 earnings of $5.41 a share on Mar 10, 2022, beating the $4.58 consensus estimate by 18.1%. Revenue was $2.7B against a $2.7B estimate.
Ulta Beauty capped fiscal 2021 with a stronger-than-expected fourth quarter, reporting GAAP diluted EPS of $5.41 against a consensus estimate of $4.58, an 18.12% beat, while revenue of $2.73 billion edged past the $2.69 billion estimate and grew 24.1% year over year. The reported EPS figure is on a GAAP basis and includes a $0.05 benefit from income tax accounting for stock-based compensation. The quarter's outperformance was anchored by a 21.4% comparable sales surge, driven by a 10.4% lift in transactions and a 9.9% rise in average ticket, as recovering consumer demand and fewer COVID-19 restrictions brought shoppers back to stores and lifted gross margin to 37.6% from 35.1% a year ago. The company's expanding partnership with Target, where it plans to add more than 250 shop-in-shop locations in 2022, adds a distribution tailwind as Ulta heads into the new fiscal year. For fiscal 2022, management guided for net sales of $9.05 billion to $9.15 billion and GAAP diluted EPS of $18.20 to $18.70, reflecting continued confidence in the beauty category despite acknowledged wage and supply chain cost pressures.
- Comparable sales increased 21.4% driven by 10.4% increase in transactions and 9.9% increase in average ticket
- Stronger consumer confidence and fewer COVID-19 restrictions
- Gross margin improvement from leverage of fixed costs, favorable channel mix shifts, and improvement in merchandise margins
- Two-year comparable sales stack of 15.4% versus Q4 fiscal 2019
- Full-year comparable sales increased 37.9% driven by 30.0% increase in transactions and 6.0% increase in average ticket
“Our fiscal year ended with better-than-expected performance, reflecting excellent, enterprise-wide execution against our fourth quarter plans as well as stronger consumer demand and the strength of Ulta Beauty's differentiated model.”
Ulta Beauty CEO, on the earnings call
What Was Ulta Beauty's Outlook in Q4 2021?
For fiscal 2022, Ulta Beauty expects net sales of $9.05 billion to $9.15 billion, comparable sales growth of 3% to 4%, operating margin of 13.7% to 14.0%, and diluted EPS of $18.20 to $18.70. The company plans to open 50 net new stores and complete 35 remodel and relocation projects. Share repurchases are expected at approximately $900 million, with capital expenditures of $375 million to $425 million, depreciation and amortization of $250 million to $255 million, and an effective tax rate of approximately 24.5%. The outlook assumes a consistent federal tax rate and no material increases in the federal minimum wage.
ULTA YoY Financials
| Metric | Q4 2021 | Q4 2020 | Year over year |
|---|---|---|---|
| Revenue | $2.7B | $2.2B | +24.1% |
| Gross Profit | $1.0B | $771.0M | +33.2% |
| Operating Income | $375.6M | $255.1M | +47.3% |
| Net Income | $289.4M | $171.5M | +68.7% |
Figures from SEC filings and company reports. Not investment advice.