AI Takeaway
ULTA Beauty delivered 9.7% revenue growth to $12.4B in FY2025, but rising SG&A expenses (+17.4%) compressed operating margin by ~150bps to 12.4%, resulting in a 4.0% decline in net income to $1.15B.
Revenue
$12.39B
++9.71% YoY
EPS (Basic)
$25.72
++1.10% YoY
Gross Margin
39.1%
++0.26% YoY
Operating Income
$1.53B
-2.04% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
ULTA achieved revenue of $12.39B in FY2025, up 9.7% year-over-year from $11.30B, reflecting continued consumer demand for beauty products and expansion of its store footprint and loyalty program.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Gross margin improved modestly to 39.1% from 38.8% in the prior year, as gross profit grew 10.4% to $4.85B, outpacing revenue growth and suggesting some improvement in product mix or pricing power.
Source: Source: 10-K Income Statement & Key Ratios (XBRL Financial Data)
SG&A expenses surged 17.4% to $3.30B, significantly outpacing revenue growth of 9.7%, which caused operating income to decline 2.0% to $1.53B and compressed operating margin from 13.9% to 12.4%.
Source: Source: 10-K Income Statement (XBRL Financial Data)
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Upgrade to unlockSG&A expenses grew 17.4% in FY2025, far outpacing revenue growth of 9.7%, indicating potential structural cost pressures in labor, marketing, or store operations. If this trend continues, operating margins could face further compression beyond the ~150bps decline already observed in FY2025.
Source: Source: 10-K Income Statement (XBRL Financial Data)
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Upgrade to unlock| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $12.39B | $11.3B | +9.71% |
Cost of Revenue | $7.55B | $6.91B | +9.25% |
Gross Profit | $4.85B | $4.39B | +10.44% |
Operating Income | $1.53B | $1.56B | -2.04% |
Net Income | $1.15B | $1.2B | -3.96% |
EPS (Basic) | $25.72 | $25.44 | +1.10% |
EPS (Diluted) | $25.64 | $25.34 | +1.18% |
SG&A Expense | $3.3B | $2.81B | +17.37% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $7B | $6B | +16.62% |
Current Assets | $3.14B | $3.03B | +3.81% |
Total Liabilities | $4.2B | $3.51B | +19.43% |
Current Liabilities | $2.22B | $1.78B | +25.00% |
Stockholders' Equity | $2.8B | $2.49B | +12.66% |
Cash & Equivalents | $424.24M | $703.2M | -39.67% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.5B | $1.34B | +12.26% |
Investing Cash Flow | $-931.35M | $-383.09M | -143.11% |
Financing Cash Flow | $-850.67M | $-1.02B | +16.51% |
Share Buybacks | $901.39M | $1B | -10.16% |
D&A | $300.77M | $267.04M | +12.63% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 39.1% | 38.8% | +0.26% |
Operating Margin | 12.4% | 13.9% | -1.48% |
Net Margin | 9.3% | — | — |
ROE | 41.1% | — | — |
ROA | 16.5% | — | — |
Current Ratio | $1.414 | — | — |
Debt to Equity | $1.497 | — | — |
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ULTA Beauty reported FY2025 revenue of $12.39B, up 9.7% year-over-year, but net income declined 4.0% to $1.15B due to a 17.4% surge in SG&A expenses. Operating margin compressed from 13.9% to 12.4%, highlighting the tension between top-line growth and rising costs.
Yes, ULTA's basic EPS grew 1.1% to $25.72 in FY2025, despite a 4.0% decline in net income. The EPS improvement was supported by approximately $901M in share buybacks, which reduced the outstanding share count.
ULTA's operating margin fell from 13.9% to 12.4% in FY2025 primarily because SG&A expenses surged 17.4% to $3.30B, nearly double the pace of revenue growth of 9.7%. This suggests rising costs in areas such as labor, marketing, or store operations that outpaced the company's revenue expansion.
ULTA's financial health is generally solid, with a current ratio of 1.41 and strong operating cash flow of $1.50B, but cash reserves fell 39.7% to $424M and total liabilities grew 19.4% to $4.20B. The debt-to-equity ratio of approximately 1.50 and rising capital expenditures are areas investors should monitor closely.
ULTA repurchased approximately $901M worth of shares in FY2025, slightly below the $1.00B spent in the prior year. These buybacks helped support EPS growth even as net income declined, and were funded in part by the company's strong operating cash flow of $1.50B.