Ulta Beauty, Inc. (ULTA): history, ownership, mission, how it works & makes money

A Brief History of Ulta Beauty, Inc.

Company Overview

Ulta Beauty, Inc. (NASDAQ: ULTA) is a leading beauty retailer in the United States, offering a wide range of cosmetics, skincare, fragrance, and haircare products, along with salon services. As of August 3, 2024, the company operated 1,411 stores across the U.S., marking an increase from 1,362 stores in the previous year.

Financial Performance

For the 26 weeks ended August 3, 2024, Ulta Beauty reported net sales of $5.28 billion, a 2.2% increase compared to $5.16 billion for the same period in 2023. The net income for the same period was $565.7 million, down from $647.2 million in 2023, reflecting a decrease in profit margins due to rising operational costs.

Operational Highlights

Ulta Beauty opened 29 new stores during the 26 weeks ended August 3, 2024, compared to 8 new stores in the prior year. The company also closed 3 stores, relocated 2, and remodeled 9 stores, demonstrating its commitment to expanding its footprint while optimizing existing locations.

Cash Flow and Liquidity

For the 26 weeks ended August 3, 2024, Ulta Beauty recorded net cash provided by operating activities of $358.9 million, a decrease from $428.8 million in the same period of 2023. The company had cash and cash equivalents of $414.0 million at the end of the reporting period, down from $766.6 million at the beginning of the fiscal year.

Market Position

Ulta Beauty continues to maintain a strong market position within the beauty retail sector, emphasizing both product diversity and customer experience. The company’s strategic initiatives, including the expansion of its store base and enhancement of its e-commerce platform, are central to its growth strategy.

Recent Developments

In March 2024, Ulta Beauty's Board of Directors authorized a new share repurchase program, allowing the company to repurchase up to $2 billion of its common stock, reflecting confidence in its ongoing profitability and cash flow generation capabilities.

A Who Owns Ulta Beauty, Inc. (ULTA)

Major Shareholders as of 2024

Ulta Beauty, Inc. (ULTA) has a diverse ownership structure, comprising institutional investors, mutual funds, and individual shareholders. As of 2024, the following table summarizes the major shareholders of Ulta Beauty:

Executive Ownership

Key executives and board members also hold significant stakes in Ulta Beauty. The following table outlines the ownership of executive officers as of 2024:

Recent Changes in Ownership

In recent months, Ulta Beauty has seen fluctuations in its institutional ownership. Notably, the company has undertaken share repurchase programs that have reduced the number of shares outstanding, thus affecting ownership percentages:

• In March 2024, Ulta Beauty announced a new share repurchase program, allowing for the repurchase of up to $2 billion of its common stock.
• As of August 3, 2024, approximately 549,852 shares were repurchased under this program, contributing to a decrease in publicly held shares.

Stock Performance and Market Capitalization

As of August 3, 2024, Ulta Beauty's stock price was approximately $481, giving it a market capitalization of around $23.1 billion. This reflects a growth trajectory in the beauty retail sector, supported by strong sales performance and strategic investments in store expansion and e-commerce.

Conclusion

Ulta Beauty, Inc. continues to maintain a robust ownership structure, characterized by significant institutional investment and executive involvement. The company's strategic initiatives in share repurchase and capital management play a crucial role in shaping its market presence and shareholder value.

Ulta Beauty, Inc. (ULTA) Mission Statement

Mission Statement Overview

Ulta Beauty, Inc. is dedicated to delivering a unique and engaging experience for beauty enthusiasts through a combination of product variety and exceptional customer service. The company's mission emphasizes inclusivity and accessibility, aiming to empower all guests to express themselves through beauty.

Core Values

• Customer Centricity: Focus on delivering outstanding customer service and personalized experiences.
• Diversity and Inclusion: Commitment to a diverse workforce and inclusive product offerings.
• Innovation: Continuous improvement in product offerings and customer experience.
• Integrity: Upholding ethical standards in all business practices.

Financial Performance

As of August 3, 2024, Ulta Beauty reported a net income of $565.7 million for the 26 weeks ended, a decrease from $647.2 million for the same period in 2023. Net sales increased to $5.3 billion, representing a 2.2% growth compared to the prior year. The gross profit margin was 38.8%, down from 39.7% in the previous year, indicating challenges in maintaining profitability amid rising costs.

Market and Competitive Position

Ulta Beauty has established itself as a leading retailer in the beauty sector, competing with both specialty and department stores. The company operates 1,411 stores across the United States as of August 3, 2024. The brand's strategy focuses on expanding its presence in key markets while enhancing its e-commerce capabilities to cater to a growing online customer base.

Recent Initiatives

In 2024, Ulta Beauty undertook several initiatives aimed at enhancing customer experience, including the opening of new stores and the introduction of exclusive product lines. The company has also emphasized digital transformation to improve online shopping experiences.

Outlook

Ulta Beauty continues to focus on strategic investments and marketing efforts to drive customer engagement and sales growth. The company aims to navigate challenges in the retail environment, including inflation and changing consumer behaviors, while remaining committed to its mission of making beauty accessible to all.

How Ulta Beauty, Inc. (ULTA) Works

Company Overview

Ulta Beauty, Inc. operates as a specialty retailer in the United States, focusing on cosmetics, fragrance, haircare, skincare products, and related accessories and services. As of August 3, 2024, the company operates 1,411 stores across 50 states.

Financial Performance

For the 26 weeks ended August 3, 2024, Ulta reported:

• Net Sales: $5.3 billion, a 2.2% increase from $5.2 billion in the same period of 2023.
• Gross Profit: $2.0 billion, maintaining a gross profit margin of 38.8% compared to 39.7% in 2023.
• Selling, General and Administrative (SG&A) Expenses: $1.3 billion, an increase of 8.1% from $1.2 billion in 2023.
• Net Income: $565.7 million, down from $647.2 million in the previous year.

Operational Metrics

For the 13 weeks ended August 3, 2024, Ulta reported:

• Net Sales: $2.6 billion, a 0.9% increase from $2.5 billion in the same period of 2023.
• Comparable Sales: Decreased by 1.2%.
• Operating Income: $329.2 million, down from $391.6 million in the previous year.
• Net Income: $252.6 million, down from $300.1 million in the previous year.

Cash Flow Summary

For the 26 weeks ended August 3, 2024, Ulta reported:

• Net Cash Provided by Operating Activities: $358.9 million.
• Net Cash Used in Investing Activities: $(191.4) million.
• Net Cash Used in Financing Activities: $(520.1) million.

Store Expansion and Inventory

As of August 3, 2024, Ulta had:

• Total Number of Stores: 1,411.
• Merchandise Inventories: $2.0 billion, an increase of 10.1% from $1.8 billion in July 2023.

Stock Performance

As of August 3, 2024, Ulta's stock performance metrics included:

• Basic Net Income per Share: $5.32.
• Diluted Net Income per Share: $5.30.
• Weighted Average Shares Outstanding: 47.5 million (basic) and 47.7 million (diluted).

Revenue Segmentation

Ulta's revenue is segmented by product category as follows:

How Ulta Beauty, Inc. (ULTA) Makes Money

Revenue Streams

Ulta Beauty generates its revenue primarily through several key segments:

• Retail Sales
• Salon Services
• Other Revenue Sources

Retail Sales

For the 26 weeks ended August 3, 2024, Ulta Beauty reported net sales of $5.28 billion, an increase of 2.2% from the previous year. Retail sales consist of cosmetics, skincare, haircare, and fragrance products.

Salon Services

Ulta Beauty operates full-service salons in nearly all its locations. Salon services account for approximately 4% of total sales. For the 26 weeks ended August 3, 2024, salon service revenue remained stable, contributing to the overall revenue growth.

Other Revenue Sources

Ulta's other revenue includes income from loyalty programs, credit card partnerships, and royalties from collaborations. Notably, the partnership with Target Corporation has been a significant contributor to this revenue stream.

Cost Structure

Ulta Beauty's cost of sales for the 26 weeks ended August 3, 2024, was $3.23 billion, leading to a gross profit of $2.05 billion. The gross profit margin decreased to 38.8% from 39.7% the previous year, primarily due to higher merchandise costs and fixed cost deleverage.

Selling, General and Administrative Expenses (SG&A)

SG&A expenses for the 26 weeks ended August 3, 2024, totaled $1.31 billion, representing 24.8% of net sales, up from 23.5% the year prior. This increase was driven by higher payroll and marketing expenses.

Net Income and Earnings Per Share

Net income for the 26 weeks ended August 3, 2024, was $565.7 million, a decrease from $647.2 million in the prior year. This resulted in a diluted earnings per share of $11.78, compared to $12.90 the previous year.

Store Expansion and Capital Expenditures

Ulta Beauty continues to expand its footprint, operating 1,411 stores as of August 3, 2024. Capital expenditures for the first half of 2024 were $186.3 million, focused on new store openings and renovations.

Cash Flow and Liquidity

Net cash provided by operating activities for the 26 weeks ended August 3, 2024, was $358.9 million, down from $428.8 million the previous year. The company held cash and cash equivalents of $414.0 million as of the same date.

Share Repurchase Programs

Ulta Beauty has an ongoing share repurchase program, with $1.6 billion remaining under its 2024 Share Repurchase Program as of August 3, 2024.