Beautiful Results
Q3 Results Ulta Beauty
Ulta Beauty, the first stock we bought for our Portfolio, just published its results.
The stock is up 12% after hours.
Let’s dig into the results and tell you what you need to know.
Ulta Beauty
Ulta Beauty is a Quality Cannibal Stock.
It’s the largest specialty beauty retailer in the United States known for its wide range of beauty products and services. Ulta Beauty offers more than 25,000 products from more than 600 beauty brands. The company has a low capital intensity and a healthy balance sheet.
Here’s a onepager explaining the basics to you:
Q3 Results
In the third quarter of 2023, Ulta Beauty reported Net Sales of $2.5 Billion Compared to $2.3 Billion last year. Its comparable sales increased by 4.5% and Net Income equaled $249.5 Million or $5.07 Per Diluted Share.
Ulta Beauty’s loyalty program expanded to a record 42.2 million members. For comparison: Starbucks has roughly 31 million loyalty members.
Here’s a summary of the company’s results over the first 9 months of 2023:
Net sales increased 9.6% to $7.7 billion compared to $7.0 billion, primarily due to increased comparable sales
Comparable sales increased 7.3% compared to an increase of 15.6%, driven by an 8.7% increase in transactions and a 1.4% decrease in average ticket.
Diluted earnings per share was $17.99 compared to $17.35 last year
It’s also lovely to see that the company continues to heavily buy back shares.
During the third quarter of fiscal 2023, Ulta Beauty repurchased 686,689 shares of its common stock at a cost of $281.5 million.
During the first nine months of fiscal 2023, the Company repurchased 1.8 million shares of its common stock at a cost of $840.5 million.
This means that the company bought back 3.6% of its outstanding shares in just 9 months. We expect this trend to continue.
Last but not least, Ulta Beauty announced its CFO Succession Plan. CFO Scott Settersten (age: 59) will retire as Chief Financial Officer, Treasurer and Assistant Secretary after working nearly 20 years for the company. On the 1st of April 2024, Paula Oyibo, senior vice president of finance, will succeed Settersten as CFO.
The company also increased its outlook slightly:
Now let’s dive into the earnings call and update our investment case of Ulta Beauty.