Ulta Beauty reported its financial performance for the fourth quarter and fiscal year of 2023.
Fourth quarter of fiscal 2023, net sales rose by 10.2% to $3.6 billion from $3.2 billion, driven mainly by higher comparable sales, and robust performance from new stores. Gross profit grew by 10.6% to $1.3 billion from $1.2 billion. As a percentage of net sales, gross profit margin increased slightly to 37.7% from 37.6%, mainly driven by robust growth in other revenue, reduced shipping costs, and efficiencies in supply chain expenses. However, these gains were partly balanced by a decrease in merchandise margin. Net income rose by 15.7% to $394.4 million from $340.8 million.
For the full fiscal 2023, Net sales rose by 9.8% to $11.2 billion from $10.2 billion, mainly attributed to increased comparable sales and strong performance from new stores. Comparable sales grew by 5.7%, compared to a 15.6% increase previously, driven by a 7.4% rise in transactions and a 1.5% decrease in average ticket size.
Gross profit increased by 8.3% to $4.4 billion from $4.0 billion. However, as a percentage of net sales, gross profit margin declined to 39.1% from 39.6%. This was primarily due to lower merchandise margin and higher inventory shrinkage, partially offset by robust growth in other revenue and the leveraging of store fixed costs.
In fiscal 2023, Ulta Beauty opened 33 new stores, moved seven stores to new locations, renovated 18 stores, and shut down three stores. By the conclusion of the fourth quarter of fiscal 2023, the company managed a total of 1,385 stores spanning 14.5 million square feet.
CEO Kimbell said, “International expansion represents an incremental, long-term opportunity for Ulta Beauty to extend our reach and leverage our differentiated value proposition. We have evaluated various operating models partners, and geographies, and we are excited to announce the formation of a joint venture with Axo, a highly experienced operator of global brands, to launch and operate Ulta Beauty in Mexico in 2025.”
Ulta Beauty expects net sales for fiscal 2024 to range between $11.7 billion and $11.8 billion, with diluted earnings per share projected to be between $26.20 and $27. The company intends to open approximately 60 to 65 net new stores during the year.
