Ulta Beauty Q3 FY25 earnings exceed forecasts with 6.3% comparable sales growth
The performance was driven by a 3.8% increase in average ticket size and a 2.4% growth in transaction volume.
USA – Ulta Beauty has reported a strong performance in its third quarter of fiscal 2025, achieving net sales of USD 2.9 billion, marking a 12.9% increase compared to USD 2.5 billion in the same quarter of the prior year.
Gross profit for the quarter reached USD 1.2 billion, or 40.4% of net sales, up from USD 1.0 billion (39.7%) in the prior year, driven by lower inventory shrink and higher merchandise margins, though partially offset by an unfavorable channel mix.
Selling, general, and administrative expenses increased to USD 840.9 million from USD 682.3 million the previous year, due to higher incentive compensation, store payroll, benefits, store expenses, and amortization of cloud-based software investments.
Operating income for the quarter was USD 309.4 million, down from USD 318.5 million in the prior year, while net income stood at USD 230.9 million, with diluted earnings per share remaining flat at USD 5.14.
For the first nine months of fiscal 2025, net sales totaled USD 8.5 billion, comparable sales increased by 5.2%, and diluted earnings per share grew 4.3% to USD 17.65.
The company’s balance sheet showed cash and cash equivalents at USD 204.9 million at the end of Q3, with merchandise inventories up 16% to USD 2.7 billion, reflecting inventory for new brand launches, the Space NK acquisition, and the addition of 63 net new stores.
Short-term debt rose to USD 551.7 million, mainly to support working capital and capital allocation priorities, including share repurchases and capital expenditures.
Ulta Beauty repurchased 426,914 shares for USD 224.7 million in Q3, with 1.7 million shares repurchased for USD 693.0 million in the first nine months.
The company now has USD 2.0 billion remaining under its USD 3.0 billion share repurchase program.
During Q3, Ulta Beauty opened 28 new stores, remodeled 15, and closed one, bringing its total U.S. store count to 1,500, excluding the 84 Space NK stores in the U.K. and Ireland.
Ulta Beauty has revised its fiscal 2025 guidance, projecting net sales between USD 12.0 billion and USD 12.1 billion, comparable sales growth of 2.5% to 3.5%, net new store openings of approximately 63, and diluted earnings per share between USD 23.85 and USD 24.30.
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