Ulta Beauty, Inc. (NASDAQ: ULTA) is the largest specialty beauty retailer in the United States, offering a comprehensive range of cosmetics, skincare, haircare products, and salon services. As of the end of fiscal 2024, the company operates 1,445 retail stores across 50 states.

In the company’s fourth quarter ended February 1, 2025, Ulta Beauty showed signs of a stable performance despite a slight decline in overall sales. Net sales decreased by 1.9% to $3.5 billion compared to $3.6 billion in the same quarter of the previous year, impacted in part by one less week of sales. Comparable sales increased by 1.5%, attributable to a 3% rise in the average ticket, while transactions dropped by 1.4%.

For the full fiscal year 2024, net sales rose by 0.8% to $11.3 billion from $11.2 billion, with comparable sales increasing by 0.7%. The gross profit margin for the fourth quarter was 38.2%, up from 37.7% year-over-year, driven by reduced inventory shrink and improved merchandise margin. Conversely, gross profit decreased from $1.34 billion to $1.33 billion.

Selling, general and administrative (SG&A) expenses reached $815.6 million in Q4, slightly down from $820.4 million. As a percentage of net sales, SG&A expenses climbed to 23.4%, due to the deleveraging of store payroll and benefits. Operating income for the quarter was $516 million, accounting for 14.8% of net sales, slightly improved from 14.5% a year earlier.

Delving deeper into profitability metrics, diluted earnings per share for Q4 was $8.46, reflecting a rise of 4.7% from $8.08 in the prior year. Over the full year, diluted EPS decreased to $25.34 from $26.03, influenced by both the extra week of sales in 2023 and changes in operational costs.

Looking ahead, Ulta Beauty anticipates net sales for fiscal 2025 to be between $11.5 billion and $11.6 billion, with comparable sales growth projected between flat and up by 1%. The company expects an operating profit decline in the low double-digit range, anticipating pressures from inflationary headwinds and ongoing strategic investments under its “Ulta Beauty Unleashed” plan.

In terms of cost structure, Ulta projects an operating margin between 11.7% and 11.8% of net sales. SG&A expenses are expected to rise by approximately 10%, largely due to strategic investments and increased payroll costs. The company also plans to spend $425 million to $500 million in capital expenditures for new stores, remodels, and technology upgrades.

Ulta ended the fourth quarter with $703 million in cash and cash equivalents and inventory totaling $2 billion, a 13% increase from last year, mainly to support new store openings and brand launches. Share repurchases totaled $1 billion during fiscal 2024, returning significant capital to shareholders.

As of now, Ulta Beauty continues to navigate a competitive market landscape where it lost market share for the first time in 2024, necessitating a focus on improving customer experiences and enhancing product offerings to sustain its positioning within the beauty industry.