Ulta Beauty (ULTA) Q3 2023 Earnings
Did ULTA Beat Earnings? Q3 2023 Results
Yes. Ulta Beauty reported Q3 2023 earnings of $5.07 a share on Nov 30, 2023, beating the $4.95 consensus estimate by 2.4%. Revenue was $2.5B against a $2.5B estimate.
Ulta Beauty posted a solid third quarter, with results ahead of Wall Street expectations on both the top and bottom lines even as margin pressure weighed on year-over-year profitability. The beauty retailer reported GAAP diluted EPS of $5.07, beating the $4.95 consensus estimate by 2.42%, while revenue of $2.49 billion edged past the $2.47 billion forecast and rose 6.4% from a year ago, driven by 4.5% comparable sales growth fueled by a 5.9% increase in transactions. The headline beat, however, came alongside notable margin compression, with operating margin contracting to 13.1% from 15.5% a year ago as higher inventory shrink, elevated supply chain costs, and increased SG&A spending weighed on results. Net income declined to $249.48 million from $274.58 million in the prior-year period. On the leadership front, longtime CFO Scott Settersten announced his retirement, with Paula Oyibo set to succeed him. Looking ahead, Ulta raised its fiscal 2023 diluted EPS guidance to $25.20-$25.60 and narrowed its net sales outlook to $11.10 billion-$11.15 billion, signaling continued confidence in the resilience of consumer beauty spending.
- Comparable sales increased 4.5%, driven by 5.9% transaction growth partially offset by 1.4% average ticket decline
- Loyalty program expanded to 42.2 million members
- Strong new store performance and growth in other revenue
- Skincare category grew from 16% to 19% of net sales; Fragrance and bath grew from 12% to 13%
- Brand awareness increased
“The third quarter represented another strong performance by the Ulta Beauty team, as sales, gross profit, and diluted EPS all exceeded our internal expectations. Our traffic trends remained healthy, our brand awareness increased, and we expanded our loyalty program to a record 42.2 million members.”
Ulta Beauty CEO, on the earnings call
What Was Ulta Beauty's Outlook in Q3 2023?
Ulta Beauty updated its fiscal 2023 outlook: net sales of $11.10 billion to $11.15 billion (narrowed from $11.05-$11.15 billion), comparable sales growth of 5.0%-5.5% (raised from 4.5%-5.5%), diluted EPS of $25.20-$25.60 (raised from $25.10-$25.60), share repurchases of approximately $950 million (increased from $900 million), capital expenditures of $400-$425 million (reduced from $400-$475 million), and depreciation of $240-$245 million (reduced from $245-$250 million). Operating margin, net new stores (25-30), remodel/relocation projects (20-30), interest income (~$17 million), and effective tax rate (~23.9%) were unchanged.
ULTA YoY Financials
| Metric | Q3 2023 | Q3 2022 | Year over year |
|---|---|---|---|
| Revenue | $2.5B | $2.3B | +6.4% |
| Gross Profit | $992.1M | $962.8M | +3.0% |
| Operating Income | $327.2M | $365.7M | −10.5% |
| Net Income | $249.5M | $274.6M | −9.1% |
Figures from SEC filings and company reports. Not investment advice.