BOLINGBROOK, Ill. - Ulta Beauty, Inc. (NASDAQ: NASDAQ:ULTA) reported a significant beat on its first-quarter earnings per share (EPS), but shares edged 1.45% lower as the company's full-year outlook disappointed investors.
For the quarter ended May 4, 2024, the beauty retailer posted an EPS of $6.47, surpassing the analyst consensus of $2.70 by a notable $3.77. However, the company did not report any revenue for the quarter, missing the consensus estimate of $2.73 billion.
In a dynamic operating environment, Ulta Beauty achieved a 3.5% increase in net sales to $2.7 billion compared to $2.6 billion in the same quarter last year, with comparable sales up by 1.6%. CEO Dave Kimbell expressed pride in the team's ability to grow sales and manage expenses amid market volatility.
"We have a clear plan to accelerate our momentum and continue delivering a best-in-class assortment and engaging experiences for our guests," said Kimbell.
Ulta Beauty now expects full-year EPS to be in the range of $25.20 to $26.00, which is below the analyst consensus of $26.33. Additionally, the company forecasts revenue to reach between $11.5 billion and $11.6 billion, trailing the consensus of $11.7 billion.
The updated guidance reflects the company's anticipation of the first quarter's challenging dynamics persisting throughout the year. Gross profit as a percentage of net sales decreased to 39.2% from 40.0% the previous year, mainly due to lower merchandise margins and higher inventory shrink. Selling, general and administrative expenses also rose to 24.4% of net sales, up from 23.2% in the prior year, largely because of increased corporate overhead for strategic investments and higher store payroll and benefits.
Ulta Beauty's balance sheet remains solid, with cash and cash equivalents totaling $524.6 million at the end of the first quarter. The company also continued its share repurchase program, buying back 588,004 shares at a cost of $285.1 million.
As the largest U.S. beauty retailer, Ulta Beauty operates 1,395 stores and continues to expand its footprint, opening 12 new stores and closing two during the quarter.
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