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Ulta Beauty, Inc. (ULTA) reported third-quarter fiscal 2025 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Also, revenues grew and earnings remained flat compared with the prior-year figures. Management raised guidance for fiscal 2025.
The company reported fiscal third-quarter earnings per share of $5.14, beating the Zacks Consensus Estimate of $4.56. The bottom line remained flat compared with the year-ago reported figure.
Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote
Net sales of this beauty product retailer increased 12.9% year over year to $2,857.6 million and beat the Zacks Consensus Estimate of $2,723 million. This growth was driven by higher comparable sales, the acquisition of Space NK and new store contributions.
Comparable sales, which include sales from stores open for at least 14 months and e-commerce transactions, rose 6.3%. This growth was driven by a 3.8% rise in average ticket and a 2.4% increase in transactions. We expected comparable sales to increase 2.5%.
Ulta Beauty’s gross profit totaled $1,155.7 million, up 14.9% from $1,005.6 million. Moreover, as a percentage of net sales, gross profit expanded 40.4% from 39.7%. This increase was driven by reduced inventory shrinkage and elevated merchandise margin, partially offset by unfavorable channel mix. We anticipated the gross margin to contract 60 bps.
Selling, general and administrative (SG&A) expenses increased 23.3% to $840.9 million from $682.3 million reported in the prior-year quarter. As a percentage of net sales, SG&A expenses increased to 29.4% from 27%. This rise was due to the increased incentive compensation, store payroll and benefits, store expenses and amortization of cloud-based software investments.
Operating income was $309.4 million compared with $318.5 million in the prior-year quarter. As a percentage of net sales, operating income was 10.8%, down from 12.6% in the year-ago period. We expected an operating margin of 9.1%.
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $204.9 million. Net merchandise inventories were $2,743.6 million at the end of the reported quarter. Stockholders’ equity at the end of the quarter was $2,633 million. Net cash provided by operating activities was $322.2 million for the 39 weeks ended Nov. 1, 2025.
The company repurchased 426,914 shares for $224.7 million in the quarter. In the first nine months of fiscal 2025, repurchases totaled 1.7 million shares at a cost of $693 million. As of Nov. 1, 2025, Ulta Beauty had shares worth $2 billion left under its $3 billion buyback program announced in October 2024. Management still expects to buy back shares worth nearly $900 million in fiscal 2025. For the said period, capital expenditures are expected to be in the range of $425-$500 million.
In the reported quarter, the company opened 28 stores, remodeled 15 stores and closed one store. It ended the fiscal third quarter with 1,500 stores, totaling 15.6 million square feet across the United States, excluding the 84 stores in the United Kingdom and Ireland operated by Space NK. For fiscal 2025, ULTA expects almost 63 net new stores, along with 43-48 store remodeling and relocation projects.
Ulta Beauty now expects fiscal 2025 net sales to be around $12.3 billion, up from its prior outlook of $12-$12.1 billion. The company reported net sales of $11.3 billion in fiscal 2024. Comparable sales are now expected to be 4.4% to 4.7% year over year. Earlier, it anticipated comparable sales to be 2.5% to 3.5%.
Management now expects an operating margin between 12.3% to 12.4% in fiscal 2025, up from its prior outlook of 11.9% and 12%. Earnings per share are now envisioned to be in the range of $25.20 to $25.50, up from the earlier band of $23.85-$24.30. Ulta Beauty’s earnings were $25.34 per share in fiscal 2024.
The stock has risen 2.7% in the past three months against the industry’s decline of 3.2%.
Five Below, Inc. (FIVE) operates as a specialty value retailer in the United States. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Five Below’s current fiscal-year sales and earnings implies an increase of 16.2% and 1.2%, respectively, from the prior-year levels. Five Below delivered a trailing four-quarter earnings surprise of 62.1%, on average.
The Gap, Inc. (GAP) operates as an apparel retail company. It currently has a Zacks Rank #2. GAP delivered an average earnings surprise of 19.1% in the last four quarters.
The Zacks Consensus Estimate for GAP's current financial-year sales indicates growth of 1.8% from the year-ago figure.
Boot Barn (BOOT) operates specialty retail stores in the United States and internationally, carrying a Zacks Rank #2 at present. BOOT delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for Boot Barn’s current fiscal-year EPS and sales indicates growth of 20.5% and 16.2%, respectively, from the year-ago period’s reported figures.
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This article originally published on Zacks Investment Research (zacks.com).
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