Ulta Beauty (ULTA) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 2024 increased 1.7% year-over-year to $2.53 billion, with comparable sales up 0.6% and diluted EPS rising 1.4% to $5.14 per share, while net income declined 2.9% to $242.2 million due to higher SG&A and pre-opening expenses.

• For the first 39 weeks of 2024, net sales rose 2.0% to $7.8 billion, with a 0.3% comparable sales increase, but net income fell 9.9% to $807.8 million, reflecting increased operating costs and investments.

• Ulta operated 1,437 stores as of November 2, 2024, expanding its footprint by 63 net new stores year-over-year.

• Loyalty program membership grew 5% year-over-year to 44.4 million active members, with improved retention and reactivation of lapsed members.

• Strategic initiatives included new brand launches, exclusive collaborations, and enhanced digital and omnichannel experiences.

Financial highlights

• Gross margin for Q3 2024 was 39.7%, down 20 basis points year-over-year, mainly due to deleverage of fixed costs and lower other revenue.

• SG&A expenses increased 3.2% to $682.3 million (27% of sales), with pre-opening expenses rising to $4.9 million.

• Operating profit fell 2.7% to $318.5 million, with operating margin at 12.6% versus 13.1% last year.

• Inventory increased 1.9% to $2.4 billion, mainly due to new store openings.

• Cash and cash equivalents were $177.8 million at quarter-end, with short-term debt at $199.7 million.

Outlook and guidance

• Fiscal 2024 net sales expected between $11.1 billion and $11.2 billion, with comparable sales growth between -1% and flat.

• Operating margin forecasted at 12.9% to 13.1% of net sales; diluted EPS expected between $23.20 and $23.75.

• Q4 comp sales anticipated to decline in the low single-digit range, with operating margin between 11.6% and 12.4%.

• Full-year capital expenditures revised to $400–$425 million.

• Share repurchases to remain at approximately $1 billion.