Stock Analysis on Net

Ulta Beauty Inc. (NASDAQ:ULTA)

This company has been moved to the archive! The financial data has not been updated since August 24, 2023.

Common-Size Income Statement 

Ulta Beauty Inc., common-size consolidated income statement

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12 months ended: Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Net sales 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -60.38 -60.97 -68.32 -63.76 -64.13 -64.37
Gross profit 39.62% 39.03% 31.68% 36.24% 35.87% 35.63%
Selling, general and administrative expenses -23.46 -23.89 -25.73 -23.80 -22.86 -21.87
Impairment, restructuring and other costs 0.00 0.00 -1.86 0.00 0.00 0.00
Pre-opening expenses -0.10 -0.11 -0.24 -0.26 -0.29 -0.41
Operating income 16.05% 15.03% 3.85% 12.18% 12.72% 13.35%
Interest income (expense), net 0.05 -0.02 -0.09 0.07 0.08 0.03
Income before income taxes 16.10% 15.01% 3.76% 12.25% 12.79% 13.37%
Income tax expense -3.93 -3.59 -0.90 -2.71 -2.99 -3.94
Net income 12.17% 11.42% 2.86% 9.54% 9.80% 9.44%

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).


Gross Profit Margin
Gross profit as a percentage of net sales displayed a fluctuating trend over the periods analyzed. It started at 35.63% in early 2018, gradually increasing to 36.24% by early 2020, before sharply declining to 31.68% in early 2021. Subsequently, it rebounded strongly to reach 39.62% by early 2023, marking the highest margin within the timeframe.
Cost of Sales
Cost of sales consistently represented a significant portion of net sales, fluctuating between -68.32% and -60.38%. A notable increase in this cost occurred in early 2021, reaching its peak at -68.32%. However, in the following years, it decreased substantially to -60.38% by early 2023, which corresponds to the recovery seen in the gross profit margin.
Selling, General and Administrative Expenses (SG&A)
SG&A expenses showed an increasing proportion relative to net sales from -21.87% in early 2018, peaking at -25.73% in early 2021. After this peak, SG&A costs improved, declining to -23.46% by early 2023, but still remained higher than the levels observed at the beginning of the period.
Impairment, Restructuring, and Other Costs
These costs were only recorded in early 2021 at -1.86%, which likely contributed to the sharp decline in operating income and net income in that year. There were no such charges reported in other years within the dataset.
Pre-opening Expenses
Pre-opening expenses decreased steadily, starting at -0.41% of net sales in early 2018 and falling to -0.10% by early 2023, indicating enhanced efficiency or a strategy of limiting new store openings or related expenditures.
Operating Income
Operating income exhibited a declining trend from 13.35% in early 2018 to a significant low of 3.85% in early 2021, corresponding with the period of elevated costs and impairment charges. Afterwards, operating income demonstrated a substantial recovery, reaching 16.05% by early 2023, surpassing the initial levels observed in 2018.
Interest Income (Expense), Net
This item remained relatively stable and close to zero throughout the periods, ranging from 0.08% to -0.09%. No material impact on overall profitability trends is evident from interest income or expense fluctuations.
Income Before Income Taxes
The trend in income before income taxes closely mirrored operating income, declining sharply to 3.76% in early 2021 before recovering to 16.10% by early 2023, indicating resilience in earnings power despite challenges.
Income Tax Expense
Income tax expenses as a percentage of net sales varied between -0.90% and -3.94%. The lowest tax expense was recorded in early 2021, consistent with the dip in pre-tax income. The tax rate increased again in the later periods, aligning with improved profitability.
Net Income
Net income as a percentage of net sales reflected significant fluctuation, declining from 9.44% in early 2018 to a low of 2.86% in early 2021. This was followed by a robust recovery, with net income increasing to 12.17% by early 2023, representing the highest net income margin within the given timeline.
Overall Observations
The financial data reveals that the company experienced a challenging period around early 2021, characterized by increased cost pressures and a one-time impairment charge, resulting in reduced profitability. Following this period, the company demonstrated strong financial recovery with improved gross margins, reduced cost of sales, and a decrease in SG&A expenses relative to sales. Both operating and net income margins reached their highest levels by early 2023, indicating enhanced operational efficiency and effective cost management strategies post-challenges.