Total Sales Increased 22.9%
Comparable Store Sales Increased 6.7%
EPS Increased 20.4% to $0.65
BOLINGBROOK, Ill.--(BUSINESS WIRE)--Jun. 11, 2013--
Ulta Beauty (NASDAQ:ULTA) today announced financial results for the
thirteen week period ended May 4, 2013 (“First Quarter”), which compares
to the same period ended April 28, 2012.
For the First Quarter:
-
Net sales increased 22.9% to $582.7 million from $474.1 million in the
first quarter of fiscal 2012;
-
Comparable store sales (sales for stores open at least 14 months)
increased 6.7% including the impact of e-commerce sales, compared to
an increase of 10.1% in the first quarter of fiscal 2012;
-
Gross profit decreased 100 basis points to 35.0% from 36.0% in the
first quarter of fiscal 2012;
-
Selling, general and administrative (SG&A) expense as a percentage of
net sales decreased 60 basis points to 22.8% compared to 23.4% in the
first quarter of fiscal 2012;
-
Preopening expenses increased to $3.2 million, compared to $2.5
million in the first quarter of fiscal 2012. Real estate activity in
the first quarter included 28 new stores compared to 18 new stores and
one relocation in the first quarter of fiscal 2012;
-
Operating income increased 17.8% to $67.7 million, or 11.6% of net
sales, compared to $57.4 million, or 12.1% of net sales, in the first
quarter of fiscal 2012;
-
The tax rate was 38.2% compared to 39.3% in the first quarter of
fiscal 2012;
-
Net income increased 20.0% to $41.8 million compared to $34.9 million
in the first quarter of fiscal 2012; and
-
Income per diluted share increased 20.4% to $0.65 compared to $0.54 in
the first quarter of fiscal 2012.
Dennis Eck, Interim Chief Executive Officer, stated, “We are pleased to
announce a strong start to fiscal 2013, with better than expected sales
and margin performance. We are on track to add 125 stores this year, and
continue to drive outstanding new store productivity. We opened Clinique
boutiques in eight more stores, ending the quarter with 51 stores
offering Clinique products, with further expansion planned for the rest
of the year. We are delighted to announce the addition of 25 Lancôme
boutiques planned for the fall of 2013, and expect to end the year with
a significant percentage of our stores featuring one of these iconic
brand boutiques. We continue to grow our loyalty programs and enhance
our ability to communicate with our customers with our CRM platform, and
plan to convert all our loyalty program members to one program, ULTAmate
Rewards, in early 2014. Ulta.com delivered 70% sales growth during the
quarter and we are looking forward to launching our redesigned
e-commerce platform this fall. The team is executing our growth
strategies very well, and our outlook for continued market share gains
is excellent.”
Balance Sheet and Cash Flow
Merchandise inventories at the end of the first quarter totaled $442.1
million, compared to $332.1 million at the end of the first quarter of
fiscal 2012, representing an increase of $110.0 million. Average
inventory per store increased 7.9% compared to prior year. The increase
in total inventory was primarily due to the 109 net new stores opened
since April 28, 2012, and also includes incremental inventory related to
the recently added prestige brand boutiques.
The Company did not utilize its credit facility during the first quarter
ended May 4, 2013.
Stock repurchase program
On March 18, 2013, the Company announced that the Board of Directors had
authorized a stock repurchase program for an aggregate amount of $150
million. During the first quarter, the Company purchased 500,500 shares
of common stock for $37.3 million at an average price of $74.58.
Store Expansion
During the first quarter, the Company opened 28 stores located in Ann
Arbor, MI; Branson, MO; Carmel, IN; Carson City, NV; Charlotte, NC;
Clifton, NJ; Clovis, CA; Columbia, SC; Decatur, AL; East Peoria, IL; Eau
Claire, WI; Everett, WA; Gambrills, MD; Hanford, CA; Heath, OH; Holly
Springs, NC; Jacksonville, FL; Madison, WI; Nashua, NH; Richmond, TX;
Salisbury, MD; Santa Fe, NM; Sioux Falls, SD; Southern Pines, NC;
Springfield, MO; Tallahassee, FL; Williamsburg, VA and Woodbridge, VA.
In addition, the Company closed two stores. The Company ended the first
quarter with 576 stores and square footage of 6,121,399, which
represents a 24% increase in square footage compared to the first
quarter of fiscal 2012.
Outlook
For the second quarter of fiscal 2013, the Company currently expects net
sales in the range of $579 million to $589 million, compared to actual
net sales of $481.7 million in the second quarter of fiscal 2012.
Comparable store sales for the second quarter of 2013 are expected to
increase 4% to 6%. The Company reported a comparable store sales
increase of 9.3% in the second quarter of 2012.
Income per diluted share for the second quarter of fiscal 2013 is
estimated to be in the range of $0.64 to $0.67. This compares to income
per diluted share for the second quarter of fiscal 2012 of $0.54.
The Company is confirming its previously announced fiscal 2013 guidance.
The Company plans to:
-
achieve comparable store sales growth of approximately 4% to 6%,
including the impact of the e-commerce business;
-
expand square footage by 22% with the opening of 125 net new stores;
-
remodel 7 locations;
-
deliver earnings per share growth, on a 52 week adjusted basis, at the
low end of the Company’s long term target of 25% - 30%, including the
impact of approximately $0.13 of income per diluted share in
incremental investments associated with the planned new store program,
supply chain, warehouse systems, and e-commerce site investments, the
expansion of prestige brand boutiques, and investments in store labor
to support rapid growth in the prestige cosmetics and skincare
categories;
-
incur capital expenditures of approximately $225 million in fiscal
2013, compared to $189 million in fiscal 2012; and
-
continue to generate free cash flow.
Conference Call Information
A conference call to discuss first quarter results is scheduled for
today, June 11, 2013, at 5:00 p.m. Eastern Time. Investors and analysts
interested in participating in the call are invited to dial (877)
705-6003. The conference call will also be web-cast live at http://ir.ulta.com
and remain available for 90 days. A replay of this call will be
available until 11:59 p.m. (ET) on June 25, 2013 and can be accessed by
dialing (877) 870-5176 and entering conference ID number 415409.
About Ulta Beauty
Ulta Beauty is the largest beauty retailer that provides one-stop
shopping for prestige, mass and salon products and salon services in the
United States. Ulta Beauty provides affordable indulgence to its
customers by combining unmatched product breadth, value and convenience
with the distinctive environment and experience of a specialty retailer.
Ulta Beauty offers a unique combination of over 20,000 prestige and mass
beauty products across the categories of cosmetics, fragrance, haircare,
skincare, bath and body products and salon styling tools, as well as
salon haircare products. Ulta Beauty also offers a full-service salon in
all of its stores. As of May 4, 2013, Ulta operates 576 retail stores
across 46 states and also distributes its products through the Company’s
website: www.ulta.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, which reflect our current views with
respect to, among other things, future events and financial performance.
You can identify these forward-looking statements by the use of
forward-looking words such as “outlook,” “believes,” “expects,” “plans,”
“estimates,” or other comparable words. Any forward-looking statements
contained in this press release are based upon our historical
performance and on current plans, estimates and expectations. The
inclusion of this forward-looking information should not be regarded as
a representation by us or any other person that the future plans,
estimates or expectations contemplated by us will be achieved. Such
forward-looking statements are subject to various risks and
uncertainties, which include, without limitation: the impact of weakness
in the economy; changes in the overall level of consumer spending;
changes in the wholesale cost of our products; the possibility that we
may be unable to compete effectively in our highly competitive markets;
the possibility that our continued opening of new stores could strain
our resources and have a material adverse effect on our business and
financial performance; the possibility that new store openings and
existing locations may be impacted by developer or co-tenant issues; the
possibility that the capacity of our distribution and order fulfillment
infrastructure may not be adequate to support our recent growth and
expected future growth plans; the possibility of material disruptions to
our information systems; weather conditions that could negatively impact
sales; our ability to attract and retain key executive personnel; our
ability to successfully execute and implement our common stock
repurchase program; and other risk factors detailed in our public
filings with the Securities and Exchange Commission (SEC), including
risk factors contained in our Annual Report on Form 10-K for the fiscal
year ended February 2, 2013. Our filings with the SEC are
available at www.sec.gov.
The Company does not undertake to publicly update or revise its
forward-looking statements, whether as a result of new information,
future events or otherwise.
|
Exhibit 1
|
|
Ulta Salon, Cosmetics & Fragrance, Inc.
|
Consolidated Statements of Income
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
|
May 4,
|
|
April 28,
|
|
|
2013
|
|
2012
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Net sales
|
|
$
|
582,712
|
|
|
100.0
|
%
|
|
$
|
474,098
|
|
100.0
|
%
|
Cost of sales
|
|
|
378,763
|
|
|
65.0
|
%
|
|
|
303,186
|
|
64.0
|
%
|
Gross profit
|
|
|
203,949
|
|
|
35.0
|
%
|
|
|
170,912
|
|
36.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
|
133,048
|
|
|
22.8
|
%
|
|
|
110,943
|
|
23.4
|
%
|
Pre-opening expenses
|
|
|
3,206
|
|
|
0.6
|
%
|
|
|
2,523
|
|
0.5
|
%
|
Operating income
|
|
|
67,695
|
|
|
11.6
|
%
|
|
|
57,446
|
|
12.1
|
%
|
Interest (income) expense
|
|
|
(24
|
)
|
|
0.0
|
%
|
|
|
21
|
|
0.0
|
%
|
Income before income taxes
|
|
|
67,719
|
|
|
11.6
|
%
|
|
|
57,425
|
|
12.1
|
%
|
Income tax expense
|
|
|
25,893
|
|
|
4.4
|
%
|
|
|
22,557
|
|
4.8
|
%
|
Net income
|
|
$
|
41,826
|
|
|
7.2
|
%
|
|
$
|
34,868
|
|
7.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.66
|
|
|
|
|
$
|
0.56
|
|
|
Diluted
|
|
$
|
0.65
|
|
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
63,842
|
|
|
|
|
|
62,496
|
|
|
Diluted
|
|
|
64,495
|
|
|
|
|
|
64,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
–
|
|
|
|
|
$
|
1.00
|
|
|
|
Exhibit 2
|
|
Ulta Salon, Cosmetics & Fragrance, Inc.
|
Condensed Consolidated Balance Sheets
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
May 4,
|
|
February 2,
|
|
April 28,
|
|
|
2013
|
|
2013
|
|
2012
|
|
|
(Unaudited)
|
|
|
|
|
(Unaudited)
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
293,214
|
|
$
|
320,475
|
|
$
|
266,345
|
Receivables, net
|
|
|
29,925
|
|
|
41,515
|
|
|
22,328
|
Merchandise inventories, net
|
|
|
442,085
|
|
|
361,125
|
|
|
332,065
|
Prepaid expenses and other current assets
|
|
|
48,106
|
|
|
50,452
|
|
|
40,102
|
Deferred income taxes
|
|
|
15,285
|
|
|
15,757
|
|
|
12,257
|
Total current assets
|
|
|
828,615
|
|
|
789,324
|
|
|
673,097
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
499,395
|
|
|
483,059
|
|
|
384,904
|
Deferred compensation plan assets
|
|
|
3,567
|
|
|
2,866
|
|
|
–
|
Total assets
|
|
$
|
1,331,577
|
|
$
|
1,275,249
|
|
$
|
1,058,001
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
148,488
|
|
$
|
118,886
|
|
$
|
111,889
|
Accrued liabilities
|
|
|
78,847
|
|
|
92,127
|
|
|
77,375
|
Dividends payable
|
|
|
–
|
|
|
–
|
|
|
62,420
|
Accrued income taxes
|
|
|
20,732
|
|
|
10,054
|
|
|
5,764
|
Total current liabilities
|
|
|
248,067
|
|
|
221,067
|
|
|
257,448
|
|
|
|
|
|
|
|
|
|
|
Deferred rent
|
|
|
220,003
|
|
|
208,003
|
|
|
171,973
|
Deferred income taxes
|
|
|
55,988
|
|
|
56,361
|
|
|
43,675
|
Other long-term liabilities
|
|
|
3,795
|
|
|
2,876
|
|
|
–
|
Total liabilities
|
|
|
527,853
|
|
|
488,307
|
|
|
473,096
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
803,724
|
|
|
786,942
|
|
|
584,905
|
Total liabilities and stockholders’ equity
|
|
$
|
1,331,577
|
|
$
|
1,275,249
|
|
$
|
1,058,001
|
|
Exhibit 3
|
|
Ulta Salon, Cosmetics & Fragrance, Inc.
|
Consolidated Statements of Cash Flows
|
(In thousands)
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
May 4,
|
|
April 28,
|
|
|
2013
|
|
2012
|
|
|
(Unaudited)
|
|
|
|
Operating activities
|
|
|
|
|
|
|
Net income
|
|
$
|
41,826
|
|
|
$
|
34,868
|
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
24,779
|
|
|
|
20,985
|
|
Deferred income taxes
|
|
|
99
|
|
|
|
(513
|
)
|
Non-cash stock compensation charges
|
|
|
3,048
|
|
|
|
2,893
|
|
Excess tax benefits from stock-based compensation
|
|
|
(3,901
|
)
|
|
|
(16,550
|
)
|
Loss on disposal of property and equipment
|
|
|
1,577
|
|
|
|
255
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
Receivables
|
|
|
11,590
|
|
|
|
3,825
|
|
Merchandise inventories
|
|
|
(80,960
|
)
|
|
|
(87,418
|
)
|
Prepaid expenses and other current assets
|
|
|
2,346
|
|
|
|
3,328
|
|
Income taxes
|
|
|
14,579
|
|
|
|
18,312
|
|
Accounts payable
|
|
|
29,602
|
|
|
|
25,447
|
|
Accrued liabilities
|
|
|
(13,968
|
)
|
|
|
(1,396
|
)
|
Deferred rent
|
|
|
12,000
|
|
|
|
8,510
|
|
Other assets and liabilities
|
|
|
218
|
|
|
|
–
|
|
Net cash provided by operating activities
|
|
|
42,835
|
|
|
|
12,546
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(42,004
|
)
|
|
|
(24,799
|
)
|
Net cash used in investing activities
|
|
|
(42,004
|
)
|
|
|
(24,799
|
)
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
Repurchase of common shares
|
|
|
(37,332
|
)
|
|
|
–
|
|
Excess tax benefits from stock-based compensation
|
|
|
3,901
|
|
|
|
16,550
|
|
Stock options exercised
|
|
|
5,411
|
|
|
|
8,310
|
|
Purchase of treasury shares
|
|
|
(72
|
)
|
|
|
–
|
|
Net cash (used in) provided by financing activities
|
|
|
(28,092
|
)
|
|
|
24,860
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(27,261
|
)
|
|
|
12,607
|
|
Cash and cash equivalents at beginning of period
|
|
|
320,475
|
|
|
|
253,738
|
|
Cash and cash equivalents at end of period
|
|
$
|
293,214
|
|
|
$
|
266,345
|
|
|
Exhibit 4
|
|
2013 Store Expansion
|
|
|
|
|
|
|
|
|
|
|
|
Total stores open
|
|
Number of stores
|
|
Number of stores
|
|
|
|
|
at beginning of
|
|
opened during the
|
|
closed during the
|
|
Total stores open at
|
Fiscal 2013
|
|
the quarter
|
|
quarter
|
|
quarter
|
|
end of the quarter
|
1st Quarter
|
|
550
|
|
28
|
|
2
|
|
576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross square feet
|
|
|
|
|
|
|
Total gross square
|
|
for stores opened
|
|
Gross square feet
|
|
Total gross square
|
|
|
feet at beginning
|
|
or expanded during
|
|
for stores closed
|
|
feet at end of the
|
Fiscal 2013
|
|
of the quarter
|
|
the quarter
|
|
during the quarter
|
|
quarter
|
1st Quarter
|
|
5,847,393
|
|
298,083
|
|
24,077
|
|
6,121,399
|
|

Source: Ulta Beauty
Company Contacts:
Ulta Beauty
Scott Settersten
Chief
Financial Officer
(630) 410-4807
or
Laurel Lefebvre
Vice
President, Investor Relations
(630) 410-5230
or
Media
Contact:
DKC
Juliet Horn
(212) 981-5221