Ulta Beauty, Inc.

Good afternoon and welcome to Ulta Beauty's conference call to discuss results for the Ulta Beauty's first quarter 2024 earnings results. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. We ask that you please limit yourself to one question and then re-enter the queue for any additional questions. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ms. Kylie Rollins, Vice President of Investor Relations. Ms. Rollins, please proceed.

Thank you, Sherry. Good afternoon, everyone, and thank you for joining us for a discussion of Ulta Beauty's results for the first quarter of fiscal 2024. Hosting our call today are Dave Kimball, Chief Executive Officer, and Paula Oyubo, Chief Financial Officer. Keisha Steelman, President and Chief Operating Officer, will join us for the Q&A session. Before we begin, I'd like to remind you of the company's safe harbor language. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those projected in such statements, due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC. We caution you not to place undue reliance on these forward-looking statements, which speak only as of today, May 30, 2024. We have no obligation to update or revise our forward-looking statements, except as required by law, and you should not expect us to do so. Now I'll turn the call over to Dave. Dave?

Thank you, Kylie, and good afternoon, everyone. We appreciate your interest in Ulta Beauty. For the first quarter, net sales increased 3.5% to $2.7 billion, and comp sales grew 1.6%. Operating profit was 14.7% of sales, and diluted EPS was $6.47 per share. We expected comp growth this quarter would be in the low single-digit range as we lapped strong performance last year. I am proud of how our teams adjusted our go-to-market activity to adapt to a rapidly evolving marketplace, thoughtfully managed expenses across the enterprise, and importantly, continued to execute our transformational agenda with excellence. As we look forward to the rest of the year, we believe it is prudent to anticipate a continuation of the dynamic environment we experienced in the first quarter and therefore have adjusted our expectations for the remainder of the year. Paula will give more detail on these revisions later in her prepared comments. Before we talk about the quarter, I want to emphasize a few important points. First, we are confident in our model and our ability to gain share and drive significant, sustainable value over the long term. The actions we have taken and investments we have made over the past few years have fortified our operating foundation and we are a stronger, more profitable company today than we were just a few years ago. And we have an outstanding team that knows how to execute and deliver profitably, and they are doing so every day with focus, passion, and determination. However, we are not satisfied with our market share trends, and we are taking actions to reinforce our leadership position and accelerate growth. For more than 30 years, Ulta Beauty has disrupted the beauty industry by bringing mass brands, prestige brands, luxury brands, and services together in an accessible, fun shopping environment. This differentiated strategy combined with welcoming and inclusive guest experiences has enabled us to shape consumer expectations and drive profitable growth. Today we operate in nearly 1,400 stores and manage a multi-billion dollar digital business, providing guests with unique opportunities to play, discover, and try beauty. With warm and authentic experiences, our passionate associates are creating strong emotional connections with our guests and helping them discover beauty on their own terms. We've created a world-class loyalty program that engages with more than 43 million active members and provides us with valuable customer and transaction data. And we've expanded our differentiated assortment and built strong strategic partnership with large and emerging brands around the world.