Ulta Beauty Inc
Q4 2022 Earnings
Did ULTA Beat Earnings? Q4 2022 Results
Ulta Beauty closed out fiscal 2021 with a standout fourth quarter, posting diluted EPS of $5.41 against a consensus estimate of $4.58, an 18.12% beat, while revenue climbed 24.1% year-over-year to $2.73 billion, edging past the $2.69 billion analysts had expected. The headline driver was a 21.4% comparable sales increase, itself fueled by a 10.4% rise in transactions and a 9.9% lift in average ticket, reflecting broad-based strength in consumer beauty spending as pandemic headwinds continued to fade. Gross margin expanded to 37.6% from 35.1% a year ago, as fixed-cost leverage and improved merchandise margins flowed through to operating income, pushing operating margin to 13.8% from 10.2%. The company's expanding partnership with Target, with plans to add more than 250 shop-in-shop locations in 2022, offers an additional growth channel as Ulta looks ahead to fiscal 2022 guidance of $9.05 billion to $9.15 billion in net sales, comparable sales growth of 3% to 4%, and diluted EPS of $18.20 to $18.70.
- 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 compared to year-ago quarter
- Gross margin improvement from leverage of fixed costs, favorable channel mix shifts, and improved merchandise margins
- Fragrance and bath category grew to 18% of Q4 sales from 16% year-over-year
- Services grew to 3% of Q4 sales from 2% year-over-year
“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
Forward Guidance & Outlook
For fiscal 2022, Ulta Beauty expects net sales of $9.05 billion to $9.15 billion with comparable sales growth of 3% to 4%. The company plans to open approximately 50 net new stores and complete 35 remodel and relocation projects. Operating margin is expected to be 13.7% to 14.0%, with diluted earnings per share of $18.20 to $18.70. Capital expenditures are projected at $375 million to $425 million, and share repurchases are expected at approximately $900 million. Depreciation and amortization expense is estimated at $250 million to $255 million. The outlook assumes a consistent federal tax rate of approximately 24.5% and no material increases in the federal minimum wage. Management acknowledged headwinds from lapping exceptional fiscal 2021 performance, ongoing wage and supply chain cost pressures, and investments in new capabilities to support future growth.
ULTA YoY Financials
Figures from SEC filings and company reports. Not investment advice.