Ulta Beauty, Inc. Earnings Per Share Disclosure
16. Net income per common share
The following is a reconciliation of net income and the number of shares of common stock used in the computation of net income per basic and diluted common share:
Fiscal year ended | |||||||||
February 3, | January 28, | January 29, | |||||||
(In thousands, except per share data) | 2024 |
| 2023 |
| 2022 | ||||
Numerator: | |||||||||
Net income | $ | 1,291,005 |
| $ | 1,242,408 |
| $ | 985,837 | |
Denominator: | |||||||||
Weighted-average common shares – Basic | 49,304 | 51,403 | 54,482 | ||||||
Dilutive effect of stock options and non-vested stock | 292 | 335 | 359 | ||||||
Weighted-average common shares – Diluted | 49,596 | 51,738 | 54,841 | ||||||
Net income per common share: | |||||||||
Basic | $ | 26.18 | $ | 24.17 | $ | 18.09 | |||
Diluted | $ | 26.03 | $ | 24.01 | $ | 17.98 | |||
The denominator for diluted net income per common share for fiscal years 2023, 2022 and 2021 excludes 138, 84, and 205 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects. Outstanding performance-based restricted stock units are included in the computation of dilutive shares only to the extent that the underlying performance conditions are satisfied prior to the end of the reporting period or would be considered satisfied if the end of the reporting period were the end of the related contingency period and the results would be dilutive under the treasury stock method.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.