*Net Sales of $1.2 billion compared to $1.7 billion in the year-ago quarter
*Comparable Sales decreased (26.7%)
*Sales from e-commerce operations increased more than 200%
*Net income of $8.1 million or $0.14 per dilutive share
*Adjusted net income of $41.5 million or $0.73 adjusted per dilutive share
Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period (“Second Quarter”) and twenty-six-week period (“First Six Months”) ended August 1, 2020 compared to the same periods ended August 3, 2019. During the second quarter of fiscal 2020, the Company recorded store impairment and closure related costs that reduced reported net income by $33.5 million or $0.59 per diluted share. A reconciliation of non-GAAP financial measures to the respective GAAP measures is included in this release.
“We have navigated the disruption and uncertainty of COVID-19 with our associates and guests at the heart of every decision. After closing our stores in the first quarter, we reopened our fleet in the second quarter with Shop Safe Standards and new operating procedures in place to protect the health and safety of all. I remain thankful and proud of our teams for their response and leadership throughout this challenging time and for their grace, agility and commitment to serving our guests,” said Mary Dillon, chief executive officer. “While the pandemic continues to impact our business, we are encouraged by improving trends. Comparable sales trends improved significantly throughout the quarter, from decreasing 37% in early May, as we began reopening stores, to decreasing 10% in July, when most of our stores were re-opened. Notably, sales trends have continued to improve, with comparable sales down in the mid-single digit range for the first three weeks of August.”
“We believe the near-term operating environment will continue to be dynamic and challenging, but I remain optimistic and excited about the long-term opportunity for Ulta Beauty. We know beauty enthusiasts remain passionate and engaged with the category, and we have great talent, a strong culture, a differentiated operating model, and the right strategy to drive growth,” continued Dillon. “As we transition into the new normal, I am confident the Ulta Beauty team will continue to innovate, move with agility and efficiency, and grow as the largest and most admired beauty retailer in the U.S.”
For the Second Quarter of Fiscal 2020
*Net sales decreased 26.3% to $1.2 billion compared to $1.7 billion in the second quarter of fiscal 2019 due to the impact of COVID-19.
*Comparable sales (sales for stores open at least 14 months, including stores temporarily closed due to COVID-19, and e-commerce sales) decreased 26.7% compared to an increase of 6.2% in the second quarter of fiscal 2019. In the second quarter, transactions declined 36.2% and average ticket increased 14.9%.
*Gross profit decreased to $329.0 million compared to $605.9 million in the second quarter of fiscal 2019. As a percentage of net sales, gross profit decreased to 26.8% compared to 36.4% in the second quarter of fiscal 2019, primarily due to deleverage of fixed costs due to lower sales, channel mix shifts, deleverage of salon expenses due to lower sales, and an increase in inventory reserves. These pressures were partially offset by lower promotional activity.
*Operating income decreased to $12.8 million, or 1.1% of net sales, compared to $208.0 million, or 12.5% of net sales, in the second quarter of fiscal 2019. Adjusted operating income was $54.9 million, or 4.5% of net sales.
*Net income was $8.1 million compared to $161.3 million in the second quarter of fiscal 2019. Adjusted net income was $41.5 million compared to adjusted net income of $159.0 million in the second quarter of fiscal 2019.
For the First Six Months of Fiscal 2020
*Net sales decreased 29.6% to $2.4 billion compared to $3.4 billion in first six months of fiscal 2019 due to the impact of COVID-19.
*Comparable sales decreased 31.1% compared to an increase of 6.6% in the first six months of fiscal 2019. During the first six months of fiscal 2020, transactions declined 37.4% and average ticket increased 10.1%.
*Gross profit decreased to $632.6 million compared to $1.3 billion in the first six months of fiscal 2019. As a percentage of net sales, gross profit decreased to 26.3% compared to 36.7% in the first six months of fiscal 2019, primarily due to deleverage of fixed costs due to lower sales, channel mix shifts, deleverage of salon expenses due to lower sales, and an increase in inventory reserves. These pressures were partially offset by lower promotional activity.
*Operating loss was $88.7 million, or -3.7% of net sales, compared to operating income of $445.6 million, or 13.1% of net sales, in the first six months of fiscal 2019. Adjusted operating loss was $27.0 million, or -1.1% of net sales.
*Net loss was $70.5 million compared to net income of $353.5 million in the first six months of fiscal 2019. Adjusted net loss was $23.5 million compared to adjusted net income of $340.9 million in the first six months of fiscal 2019.
The Company ended the second quarter of fiscal 2020 with $1.2 billion in cash and cash equivalents. During the first quarter of fiscal 2020, as a precautionary measure during the economic uncertainty due to COVID-19 and to enhance financial flexibility, the Company drew down $800 million under its $1.0 billion credit facility.
Merchandise inventories, net at the end of the second quarter of fiscal 2020 totaled $1.4 billion compared to $1.3 billion at the end of the second quarter of fiscal 2019. The increase in total inventory was primarily driven by 51 net new stores opened since August 3, 2019. Average inventory per store decreased slightly compared to the second quarter of fiscal 2019.
details at: http://ir.ultabeauty.com/news-releases/news-release-details/2020/Ulta-Beauty-Announces-Second-Quarter-Fiscal-2020-Results/default.aspx