ULTA 8-K: Smart Summary

Ulta Beauty, Inc. reported second quarter fiscal 2025 results for the thirteen-week period ended August 2, 2025, with net sales increasing 9.3% to $2.8B and comparable sales growing 6.7%. Results include the operations of Space NK following its July 10, 2025 acquisition. The Company also raised its full-year fiscal 2025 outlook for net sales, comparable sales, operating margin, and diluted EPS.

• Net sales increased 9.3% to $2.8B in Q2 fiscal 2025 vs. $2.6B in Q2 fiscal 2024; first six months net sales increased 6.8% to $5.6B vs. $5.3B
• Comparable sales increased 6.7% in Q2 (vs. a decrease of 1.2% in the prior year quarter), driven by a 3.7% increase in transactions and a 2.9% increase in average ticket; first six months comparable sales increased 4.7% vs. 0.2%
• Gross profit increased 11.6% to $1.1B in Q2; gross margin expanded to 39.2% from 38.3% YoY, primarily due to lower inventory shrink and higher merchandise margin, partially offset by deleverage of supply chain costs
• Operating income was $344.9M (12.4% of net sales) in Q2 vs. $329.2M (12.9% of net sales) in Q2 fiscal 2024; first six months operating income was $746.6M (13.2% of net sales) vs. $730.1M (13.8%)
• SG&A expenses increased 15.0% to $741.7M in Q2 (26.6% of net sales) vs. $644.8M (25.3% of net sales) in the prior year quarter, primarily due to higher incentive compensation, store payroll and benefits, and corporate overhead
• Net income increased 3.3% to $260.9M in Q2 vs. $252.6M; first six months net income was $565.9M vs. $565.7M
• Diluted EPS increased 9.1% to $5.78 in Q2 (including a $0.03 benefit from income tax accounting for stock-based compensation) vs. $5.30; first six months diluted EPS increased 6.0% to $12.49 vs. $11.78
• Effective tax rate was 24.5% in Q2 vs. 24.3% in Q2 fiscal 2024
• Net cash provided by operating activities was $316.5M for the first six months of fiscal 2025 vs. $358.9M in the prior year period

• Cosmetics: 38% of Q2 net sales (vs. 39% prior year); 39% of first six months net sales (vs. 40% prior year)
• Skincare and wellness: 25% of Q2 net sales (vs. 24% prior year); 25% of first six months net sales (vs. 24% prior year)
• Haircare: 19% of Q2 net sales (vs. 20% prior year); 19% of first six months net sales (vs. 19% prior year)
• Fragrance: 12% of Q2 net sales (vs. 11% prior year); 11% of first six months net sales (vs. 11% prior year)
• Services: 4% of Q2 net sales (vs. 4% prior year); 4% of first six months net sales (vs. 4% prior year)
• Other: 2% of Q2 net sales (vs. 2% prior year); 2% of first six months net sales (vs. 2% prior year)
• Note: Category percentages exclude the impact of Space NK net sales for the 13 and 26 weeks ended August 2, 2025

• Cash and cash equivalents at end of Q2 fiscal 2025 totaled $242.7M (vs. $413.9M at end of Q2 fiscal 2024 and $703.2M at February 1, 2025)
• Short-term debt at end of Q2 fiscal 2025 was $289.1M, drawn on revolving credit facility primarily to support the acquisition of Space NK; no borrowings outstanding at end of Q2 fiscal 2024
• Merchandise inventories, net increased 20.5% to $2.4B vs. $2B at end of Q2 fiscal 2024, primarily due to inventory supporting new brand launches, 62 net new Ulta Beauty stores, and 83 net new stores from Space NK
• During Q2 fiscal 2025, the Company repurchased 244,559 shares at a cost of $109.5M; during the first six months of fiscal 2025, repurchased 1.2 million shares at a cost of $468.3M
• As of August 2, 2025, $2.2B remained available under the $3B share repurchase program announced in October 2024
• Acquisitions, net of cash acquired: $386.8M in the first six months of fiscal 2025 (Space NK acquisition completed July 10, 2025)

• "The Ulta Beauty team delivered strong results in the second quarter, including 6.7% comparable sales growth. Outstanding top line performance, fueled by growth across all major categories, drove market share growth and better-than-expected profitability." — Kecia Steelman, President and Chief Executive Officer
• "As we look to the future, we remain committed to executing our Ulta Beauty Unleashed strategy and strengthening our operating model. Our outlook for the remainder of the year reflects both the strength of our year-to-date performance and our caution around how consumer demand may evolve in the second half of the year. While near-term uncertainty persists, we're staying focused on what we can control and on executing with excellence to deliver our uniquely Ulta Beauty experience." — Kecia Steelman, President and Chief Executive Officer

• Net sales updated to $12B to $12.1B (vs. prior outlook of $11.5B to $11.7B)
• Comparable sales updated to 2.5% to 3.5% (vs. prior outlook of 0% to 1.5%)
• Net new stores updated to approximately 63 (vs. prior outlook of approximately 60)
• Remodel and relocation projects updated to 43-48 (vs. prior outlook of 40-45)
• Operating margin updated to 11.9% to 12.0% (vs. prior outlook of 11.7% to 11.8%)
• Diluted EPS updated to $23.85 to $24.30 (vs. prior outlook of $22.65 to $23.20)
• Share repurchases: approximately $900M (no change)
• Interest, net: updated to approximately $4M of interest expense (vs. prior outlook of approximately $6M of interest income)
• Effective tax rate: approximately 24.5% (no change)
• Capital expenditures: $425M to $500M (no change)
• Depreciation and amortization expense: updated to approximately $300M (vs. prior outlook of $290M to $300M)