ULTA 10-K & 10-Q changes, risk factors and insider trading
Ulta Beauty, Inc. · Nasdaq · Retail-Retail Stores, Nec · CIK 1403568 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Economic, Market, and Other External Risks”
New heading “Epidemics, pandemics, natural disasters, conflicts, or other catastrophes or crises could have a material adverse effect on our business, financial condition, profitability, and cash flows.”
New heading “Climate change could adversely impact our business operations and/or our supply chain.”
New heading “Business, Operational, and Strategic Risks”
New heading “Our comparable sales and quarterly financial performance may fluctuate due to seasonality and other factors outside of our control, which could result in a decline in the price of our common stock.”
New heading “If we are not successful in managing our inventory balances, our sales may decline and our results of operations may be negatively affected.”
New heading “The development and use or misuse of AI or the failure to use AI present risks and challenges that may negatively affect our business.”
New heading “If our marketing, advertising, and promotional programs are unsuccessful, our results of operations and financial condition could be adversely affected.”
New heading “An inability to execute our real estate growth and optimization strategy could affect our financial results.”
New heading “Expanding into international markets exposes us to additional risks.”
New heading “Harm to our reputation could adversely impact our ability to attract and retain guests, associates, vendors, and/or other partners.”
New heading “Our private label brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market, and retail exclusive private label brand merchandise.”
New heading “We may not realize the anticipated benefits of acquisitions, joint ventures, and partnerships, or these benefits may take longer to realize than expected.”
New heading “Cybersecurity or information security breaches and other disruptions could compromise our information, result in the unauthorized disclosure of confidential guest, employee, Company, and/or business partner information, damage our reputation, and expose us to liability, which could negatively impact our business.”
New heading “We, as well as our vendors, are subject to numerous laws and regulations that could require us to modify our current business practices and incur increased costs, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.”
Removed heading “Business, Operational and Strategic Risks”
Removed heading “Our comparable sales and quarterly financial performance may fluctuate for a variety of reasons, which could result in a decline in the price of our common stock.”
Removed heading “If our marketing, advertising and promotional programs are unsuccessful, our results of operations and financial condition could be adversely affected.”
Removed heading “Use of social media may adversely impact our reputation.”
Removed heading “Economic, Market and Other External Risks”
Removed heading “Macroeconomic conditions could have a material adverse impact on our business, financial condition, profitability, and cash flows.”
Removed heading “A reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located could significantly reduce our sales and leave us with excess inventory, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.”
Removed heading “Epidemics, pandemics, natural disasters, or other catastrophes or crises could have a material adverse effect on our business, financial condition, profitability, and cash flows.”
Removed heading “Climate change might adversely impact our business operations and/or our supply chain.”
Removed heading “Cybersecurity or information security breaches and other disruptions could compromise our information, result in the unauthorized disclosure of confidential guest, employee, Company and/or business partners’ information, damage our reputation, and expose us to liability, which could negatively impact our business.”
Removed heading “We, as well as our vendors, are subject to laws and regulations that could require us to modify our current business practices and incur increased costs, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.”
Removed heading “Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent a change in control, even if a sale of the Company would be beneficial to our stockholders, which could cause our stock price to decline and prevent attempts by our stockholders to replace or remove our current management.”
Largest changes
“Negative publicity or perceptions involving us or our brands, products, associates, operations, vendors, spokespersons, or marketing and other partners may negatively impact our reputation and adversely affect our ability to attract and retain guests, associates, vendors, and/or other partners. Failure to detect, prevent, or mitigate issues that might give rise to reputational risk or failure to adequately address negative publicity or perceptions could adversely impact our business, results of operations, and financial condition. …”see in full comparison
“Failure to adapt to a rapidly changing technological environment or failure to adopt emerging technologies, including advances relating to AI and agentic commerce, in a timely manner could negatively affect our business. For example, if we are unable to match or surpass the advances in technologies and capabilities of our competitors for either external (guest)-facing or internal use cases, our competitive position could be adversely affected. …”see in full comparison
“Our results of operations may be materially affected by conditions in the capital markets and the U.S. or global economy generally. We appeal to a wide demographic consumer profile and offer an extensive selection of beauty products sold directly to retail consumers as well as premium salon services. Uncertainty in the economy has adversely impacted, and could continue to adversely impact, consumer purchases of discretionary items across all of our product categories, including prestige beauty products and premium salon services. …”see in full comparison
“Our results of operations may be materially affected by conditions in the capital markets and the economy generally. We appeal to a wide demographic consumer profile and offer an extensive selection of beauty products sold directly to retail consumers and premium salon services. Uncertainty in the economy has, and could continue to, adversely impact consumer purchases of discretionary items across all of our product categories, including prestige beauty products and premium salon services. …”see in full comparison
“Macroeconomic conditions, including inflation and elevated interest rates, as well as labor, transportation, and shipping cost pressures, have had, and may continue to have, a negative impact on our business, financial condition, profitability, and cash flows. Continuing dynamic global trade conditions and elevated tariff levels could contribute to increased input costs, supply chain disruption, pricing volatility, and heightened economic uncertainty, and it could be time-consuming and expensive for us to alter our operations in order to adapt to this environment. …”see in full comparison
“The formulation, manufacturing, packaging, labeling, distribution, sale, and storage of our vendors’ products and our Ulta Beauty branded products are also subject to extensive regulation by various federal agencies in the U.S., including the Food and Drug Administration (FDA), Federal Trade Commission (FTC), Consumer Product Safety Commission (CPSC), Environmental Protection Agency (EPA), and various state and local agencies, such as State Attorneys General and District Attorneys, as well as similar analogous authorities in our international markets. …”see in full comparison
Full comparison: every changed paragraph (112)
The risks described below reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect our business, financial condition, results of operations, or future growth. We could also be affected by additional risks that apply to all companies operating in the United States,States or our other markets, as well as other risks that are not presently known to us or that we currently consider to be immaterial. References to past events are provided only for example and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their probability of occurring in the future. You should carefully consider the following risks and all of the other information contained in this Annual Report on Form 10-K before making an investment in our common stock.
Economic, Market, and Other External Risks
Business, Operational and Strategic Risks
WeMacroeconomic may not be able to sustain our growth plans and successfully implement our long-range strategic, operational and financial plans, whichconditions could have a material adverse effectimpact on our business, financial condition, profitability, and cash flows.
Macroeconomic conditions, including inflation and elevated interest rates, as well as labor, transportation, and shipping cost pressures, have had, and may continue to have, a negative impact on our business, financial condition, profitability, and cash flows. Continuing dynamic global trade conditions and elevated tariff levels could contribute to increased input costs, supply chain disruption, pricing volatility, and heightened economic uncertainty, and it could be time-consuming and expensive for us to alter our operations in order to adapt to this environment. Additionally, we expect the impact of inflationary and macroeconomic pressures to continue in 2026, and we continue to closely monitor conditions, including guest behavior, and the impact of these factors on guest demand. Continuing or worsening inflation and/or cost pressures may have a material adverse impact on our business, financial condition, profitability, and/or cash flows.
As we expand internationally, the magnitude of the effects of geopolitical events, including the ongoing conflicts in Ukraine and the Middle East and cartel violence and related unrest in Mexico, on the Company’s business, financial condition, profitability, and/or cash flow could be greater than when the Company’s operations were solely U.S.-based.
Our results of operations may be materially affected by conditions in the capital markets and the U.S. or global economy generally. We appeal to a wide demographic consumer profile and offer an extensive selection of beauty products sold directly to retail consumers as well as premium salon services. Uncertainty in the economy has adversely impacted, and could continue to adversely impact, consumer purchases of discretionary items across all of our product categories, including prestige beauty products and premium salon services. Factors that could affect consumers’ willingness to make such discretionary purchases include: general business conditions, inflationary pressures, levels of employment, interest rates, tax rates, the availability of consumer credit, consumer confidence in future economic conditions, tariffs or other trade restrictions (including uncertainty as to the scale and short- and long-term effects of currently proposed or future tariffs), risks related to epidemics or pandemics, geopolitical events, and recessionary concerns. In the event of a prolonged period of inflation, an economic downturn, or a recession, consumer spending habits could be adversely affected, and we could experience lower than expected net sales. Reduced consumer spending could cause changes in guest order patterns and in the level of merchandise purchased by our guests, and may signify a reset of consumer spending habits, all of which could adversely affect our business, financial condition, profitability, and cash flows.
In addition, a general deterioration in economic conditions could adversely affect our commercial partners, including our brand partners, as well as the real estate developers and landlords who we rely on to construct and operate commercial centers in which our stores are located. A bankruptcy or financial failure of a significant vendor or a number of significant real estate developers or shopping center landlords could have a material adverse effect on our business, financial condition, profitability, and cash flows. Adverse economic conditions could negatively affect our vendors’ access to the capital and liquidity required to maintain their inventory, production levels, timeliness, and product quality and to operate their businesses, which could adversely affect our supply chain, or could reduce our vendors’ offerings of trade credit, customer incentives, vendor allowances, cooperative marketing expenditures, and product promotions, which could adversely affect our results of operations. Adverse economic conditions could also make it difficult for both us and our vendors to accurately forecast future product demand trends, which could cause us to carry too much or too little merchandise in various product categories.
The markets for beauty and wellness products and salon services are highly competitive with few barriers to entry. With regard to beauty and wellness products, we compete against a diverse group of retailers, both small and large, including mass merchandisers, specialty retailers, online capabilities of national retailers, pure-play e-commerce companies, online marketplaces (including those operated by social media platforms), and drug stores. In some regions or in connection with some products, we also compete against regional and national department stores, catalog retailers, local specialty retail stores, and direct response television, including television home shopping retailers and infomercials. With regard to salon services, we compete primarily against high-end and discount salon chains as well as locally owned salons.
We believe the principal bases upon which we compete are the breadth of merchandise, our value proposition, the quality of our guests’ shopping experience (including through our omnichannel offerings), and the convenience of our stores as one-stop destinations for beauty products and salon services. Many of our competitors are, and many of our potential competitors may be, larger and have greater financial, marketing, and other resources and therefore may be able to adapt to changes in guest requirements more quickly, devote greater resources to the marketing and sale of their products, generate greater brand recognition, or adopt more aggressive pricing policies than we can. As a result, we may lose market share, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
Epidemics, pandemics, natural disasters, conflicts, or other catastrophes or crises could have a material adverse effect on our business, financial condition, profitability, and cash flows.
Epidemics, pandemics, and other public health crises, natural disasters, such as hurricanes, tornados, wildfires, earthquakes, and mudslides, as well as conflicts, such as wars, acts of violence, and terrorism, have resulted in the temporary closure of our stores and, in the future, could also result in physical damage to our properties, the temporary closing of our stores, the temporary closing of our distribution, fast fulfillment, and market fulfillment centers, the temporary lack of an adequate work force, the temporary or long-term disruption in the supply of products (or a substantial increase in the cost of those products) from domestic or foreign suppliers, the temporary disruption in the delivery of goods both to and from our distribution, fast fulfillment, and market fulfillment centers (or a substantial increase in the cost of those deliveries), the temporary reduction in the availability of products in our stores and/or the temporary reduction in visits to stores by guests. Accordingly, if one or more epidemics, pandemics, natural disasters, and/or acts of violence or terrorism were to occur in the future, it could have a material adverse effect on our business, financial condition, profitability, and cash flows or may require us to incur increased costs.
Climate change could adversely impact our business operations and/or our supply chain.
Scientific consensus shows that carbon dioxide and other greenhouse gases in the atmosphere have caused and will in the future cause changes in weather patterns around the globe. Climatologists predict these changes will result in the increased frequency of extreme weather events and natural disasters, which could disrupt our business operations or those of our suppliers. These weather events could also lead to an increased rate of temporary store closures and reduced guest traffic at our stores. In addition, concern about climate change and greenhouse gases may result in new or additional legal, legislative, and/or regulatory requirements to reduce or mitigate the effects of climate change on the environment. Any such new requirements could increase our operating costs for things like energy or packaging, as well as our product supply chain and distribution costs.
There is also increased focus, including by investors, guests, and other stakeholders, on climate change and other environmental, social, governance, and sustainability matters, including single use plastic, energy, waste, and worker safety. Concern about climate change might cause consumer preferences to change, including moving away from products or ingredients considered to have high climate change impact and towards products that are more sustainably made, and we expect to incur additional costs in connection with our initiatives in this area.
Our reputation could be damaged if we do not (or are perceived not to) act responsibly with respect to these matters and, taken together, these matters could materially and adversely affect our business, financial condition, profitability, and cash flows, as well as our ability to meet the needs of our guests.
Business, Operational, and Strategic Risks
Our comparable sales and quarterly financial performance may fluctuate due to seasonality and other factors outside of our control, which could result in a decline in the price of our common stock.
We have historically experienced and expect to continue to experience seasonal fluctuations in our net sales, operating income, and net income. A significant portion of our net sales and profits is driven by holidays, such as Valentine’s Day and Mother’s Day in the first and second quarters and the November/December holiday season in the fourth quarter. We must carry a significant amount of inventory, particularly before these selling periods. If we miscalculate demand for our products generally or for our product mix during certain holiday seasons, our net sales could decline or we could accumulate excess inventory, which would harm our financial performance. If we are not successful in selling our inventory during these periods, we may be forced to rely on markdowns or promotional sales to dispose of the excess inventory or may not be able to sell the inventory at all, which could have a material adverse effect on our business, financial condition, and results of operations.
Additionally, our comparable sales and quarterly financial performance have historically been affected, and may continue to be affected, by any of the other types of risks and events described in these risk factors. Accordingly, our results for any one fiscal quarter are not necessarily indicative of the results to be expected for any other quarter, and comparable sales for any particular future period may decrease. In that event, the price of our common stock may decline.
If we are not successful in managing our inventory balances, our sales may decline and our results of operations may be negatively affected.
We must maintain sufficient inventory levels of merchandise that our guests desire to successfully operate our business. A shortage of popular merchandise could reduce our net sales. Conversely, we also must seek to avoid accumulating excess inventory to maintain appropriate in-stock levels. If we overstock unpopular merchandise, then we may be forced to take significant inventory markdowns or miss opportunities for the sale of other merchandise, both of which could have a negative impact on our profitability, and, in turn, our sales may decline or we may be required to sell the merchandise we have obtained at lower prices. If we are not successful in managing our inventory balances, our results of operations may be negatively affected.
Our continued and future growth largely depends on our ability to implement our long-range strategic, operational and financial plans and successfully open and operate new stores profitably. There can be no assurance that we will be successful in implementing our growth plans, long-range strategic imperatives and/or operational excellence priorities, including continuous improvement and supply chain optimization, and our failure to do so could have a material adverse effect on our business, financial condition, profitability, and cash flows.
We rely on our good relationships with brand partners to purchase prestige, mass, and salon beauty products on reasonable terms, and to offer certain brands or products that are permanently or temporarily exclusive to us. If these relationships were to be impaired, or if certain brand partners were to change their distribution model or become unable to supply sufficient merchandise to keep pace with our growth plans, we may not be able to obtain a sufficient selection or volume of merchandise on reasonable terms, and we may not be able to respond promptly to changing trends in beauty products, either of which could have a material adverse effect on our competitive position, business, financial condition, profitability, and cash flows.
We have no long-term supply agreements with brand partners, so our success depends on maintaining good relationships with them. Our business depends to a significant extent on the willingness and ability of our brand partners to supply us with a sufficient selection and volume of products to stock our stores. Some of our prestige brand partners may not have the capacity to supply us with sufficient merchandise to keep pace with our growth plans. We also have strategic partnerships with certain core brands, which have allowed us to benefit from the growing popularity of such brands. Any of our brand partners could in the future decide to scale back or end their partnerships with us and strengthen their relationships with our competitors, which could negatively impact the revenue we earn from the sale of such products. If we fail to maintain strong relationships with our existing brand partners, or if we fail to continue acquiring and strengthening relationships with additional brand partners, our ability to obtain a sufficient amount and variety of merchandise on reasonable terms may be limited, which could have a negative impact on our competitive position.
During fiscal 2025 and fiscal 2024, merchandise supplied by our top ten brand partners accounted for approximately 51% and 54% of our net sales, respectively. There continues to be vendor consolidation within the beauty products industry. The loss of or a reduction in the amount of merchandise made available to us by any one of these key vendors, or by any of our other brand partners, could have a material adverse effect on our business, financial condition, profitability, and cash flows.
We also offer products that are permanently exclusive to us and offer a number of brands and products that are exclusive to us for a limited period of time or are offered in advance of our competitors. If our brand partners ceased granting us permanent or temporary exclusive rights our net sales could be negatively impacted, which could have a material adverse effect on our business, financial condition, and profitability.
The development and use or misuse of AI or the failure to use AI present risks and challenges that may negatively affect our business.
Failure to adapt to a rapidly changing technological environment or failure to adopt emerging technologies, including advances relating to AI and agentic commerce, in a timely manner could negatively affect our business. For example, if we are unable to match or surpass the advances in technologies and capabilities of our competitors for either external (guest)-facing or internal use cases, our competitive position could be adversely affected. In addition, if we adopt new technologies such as AI and fail to deploy them effectively or if we, our associates, or third parties acting at our direction use them incorrectly, unethically, or illegally, it could have a negative impact on our business, reputation, and financial results. The development of AI technologies is complex, and there are technical and other challenges associated with achieving the desired level of accuracy, efficiency, and reliability. The algorithms and models utilized in generative AI systems may have limitations, including biases, errors, or the inability to handle certain data types or scenarios. Additionally, there is a risk of system failures, disruptions, or vulnerabilities that could compromise the integrity, security, or privacy of data inputs or generated content. These limitations or failures could result in reputational harm, legal liabilities, or loss of guest, employee, or business partner confidence. Uncertainty regarding the regulation of AI and other burgeoning technologies may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws, the nature of which cannot be determined at this time. An increasing number of jurisdictions around the globe, including several U.S. states, have already proposed or enacted laws governing AI. Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging. These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our business practices, or prevent or limit our use of AI. If we are unable to effectively use AI, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage. Any of these factors could have a material adverse effect on our business, financial condition, profitability, and cash flows.
Our business requires disciplined execution at all levels of our organization. This execution requires an experienced and talented management team. If we were to lose the benefit of the experience, efforts, and abilities of key executive personnel, it could have a material adverse effect on our business, financial condition, profitability, and cash flows. Furthermore, the success of our business depends significantly on our ability to attract, motivate, and retain qualified associates, including store managers and other store associates, distribution center associates, and corporate personnel. Competition for this type of personnel is intense, and we may not be successful in attracting, assimilating, and retaining the associates required to grow and operate our business profitably. In addition, fluctuations in the cost of labor, including as a result of inflationary pressures on wages, may negatively impact our profitability and cash flows.
Recent or potential future legislative initiatives may seek to increase the federal minimum wage in the United States, as well as the minimum wages in certain individual states or markets. As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage associates, but also the wages paid to our other hourly associates. Further, should we fail to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our customer service to suffer. Any increase in the cost of our labor could have an adverse effect on our operating costs, financial condition, and results of operations. If we are unable to hire and retain store-level associates capable of providing a high level of customer service, skilled distribution center associates, and other qualified personnel, our business could be materially adversely affected.
Although none of our associates are currently covered under collective bargaining agreements, we cannot guarantee that our associates will not elect to be represented by labor unions in the future. If some or all of our workforce were to become unionized and collectively bargained terms were significantly different from our current compensation arrangements or work practice, it could have a material adverse effect on our business, financial condition, and results of operations.
We offer most of our beauty products for sale through our Ulta.com website and through our mobile applications. As a result, we encounter risks and difficulties frequently experienced by internet-based businesses, including risks related to our ability to attract and retain customersguests on a cost-effective basis and our ability to operate, support, expand, and develop our internet operations, website, mobile applications and software, and other related operational systems. Although we believe that our omnichannel participation is a distinct advantage for us due to synergies and the potential for new customers,guests, supporting product offerings through these channels can create issues that have the potential to adversely affect our results of operations. For example, if our e-commerce platform successfully grows, it may do so in part by attracting existing guests, rather than new guests, who choose to purchase products from us online or through our mobile applications rather than from our physical stores, thereby reducing the financial performance of our stores. In addition, offering different products through each channel could cause conflicts and cause some of our current or potential future internet or mobile customersguests to consider competing distributors of beauty products. Offering products through our internet channel or through our mobile applications could also cause some of our current or potential vendors to consider competing internet or mobile offerings of their products either on their own or through competing distributors. Additionally, omnichannel retailing continues to rapidly evolve, and we must keep pace with changing guest expectations and new developments by our competitors. As we continue to grow our e-commerce platform, the impact of attracting existing rather than new guests, conflicts between product offerings online or through our mobile applicationsapplication and through our stores, and opening up our channels to increased competition from pure-play e-commerce companies could have a material adverse effect on our business, financial condition, profitability, and cash flows. In addition, if we are unable to make, improve, or develop relevant guest-facing technology in a timely manner, our ability to compete and our results of operations could be adversely affected.
If our marketing, advertising, and promotional programs are unsuccessful, our results of operations and financial condition could be adversely affected.
Guest traffic and demand for our merchandise are influenced by our advertising, marketing, and promotional activities. We use marketing, advertising, and promotional programs to attract guests through various media, including social media, websites, mobile applications, email, and print. Our future growth and profitability will depend in part upon the effectiveness and efficiency of our advertising and marketing programs. Further, disruption to certain media channels could have a material adverse effect on our results of operations and financial condition.
We currently operate four regional distribution centers, which house the distribution operations for Ulta U.S. retail stores together with the order fulfillment operations of our e-commerce platform, one fast fulfillment center (e-commerce only), and two market fulfillment centers, which focus on our most productive products and support e-commerce and retail stores. To support our expected future growth and to maintain the efficient operation of our business, it is likely that new distribution facilities will be added and existing facilities will be refurbished in the future. Our failure to effectively upgrade and expand our distribution capacity on a timely basis to keep pace with our anticipated growth in stores and the performance of our distribution centers could have a material adverse effect on our business, financial condition, profitability, and cash flows.
We directly source the majority of our Ulta Beauty Collection components and Ulta Beauty branded gifts with purchase and other promotional products through third-party vendors using foreign factories. In addition, many of our vendors use overseas sourcing to varying degrees to manufacture some or all of their products. Any event causing a disruption of manufacturing or imports from such foreign countries, including the imposition of import restrictions, increased customs duties, tariffs, trade barriers (including quotas), trade wars, geopolitical events, political changes, and legal or economic restrictions on overseas suppliers’ ability to produce and deliver products, could result in substantial disruptions in our supply chain (including inventory availability) and materially harm our operations. We have no long-term supply contracts with respect to such foreign-sourced items, many of which are subject to existing or potential duties, tariffs, or quotas that may limit the quantity of certain types of goods that may be imported into the United StatesU.S. from such countries. Our business is also subject to a variety of other risks generally associated with sourcing goods from abroad, such as political instability, wars or other conflicts, disruption of imports by labor disputes, and local business practices. Our sourcing operations may also be hurt by health concerns regarding infectious diseases in countries in which our merchandise is produced, adverse weather conditions or natural disasters that may occur overseas, or acts of war or terrorism, to the extent these acts affect the production, shipment, or receipt of merchandise. Our future operations and performance will be subject to these factors, and these factorswhich could have a material adverse effect on our business, financial condition, profitability, and cash flows or may require us to modify our current business practices and incur increased costs.
An inability to execute our real estate growth and optimization strategy could affect our financial results.
Our financial performance could be affected by our ability to successfully grow and optimize our retail store footprint. There is no assurance that we will be able to locate and lease adequate desirable locations that meet our criteria. Additionally, our ability to negotiate favorable lease terms depends on conditions in the real estate markets, including competition for desirable properties, our relationships with current and prospective property owners or shopping center operators, and other factors that may be outside our control. Our financial performance could be further adversely affected if we are unable to successfully optimize our existing retail store fleet, including by opening new stores and relocating existing stores in desirable locations, renewing or extending leases, restructuring leases to obtain more favorable renewal terms, refreshing and remodeling existing stores, and, if necessary, closing underperforming and poorly located stores. If any aspect of our real estate growth and/or optimization strategy does not achieve the results we expect, in whole or in part, we may fail to meet our performance expectations.
Expanding into international markets exposes us to additional risks.
In 2025, we expanded internationally through our acquisition of Space NK and the establishment of a joint venture in Mexico and a franchise relationship in the Middle East. Although our international activities are not significant to our financial results, our increasing international presence exposes us to additional risks. We have relatively little operating experience in international markets and may be challenged in replicating our business model in other countries. It is costly to establish, develop, and maintain international operations and promote our brand internationally. For these and other reasons, our international operations may not become profitable on a sustained basis. As international physical, e-commerce, and omnichannel retail and other services grow, competition will intensify, including through adoption of evolving business models. Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on, the local customer, as well as their more established local brand names.
In addition, our international operations are subject to a number of unique risks, including those relating to local economic and political conditions; government regulation; restrictive trade policies; restrictions on the sale or distribution of certain products or services; uncertainty regarding liability for products, services, and content, including uncertainty as a result of unfamiliar local laws and legal systems; business licensing or certification requirements; limited fulfillment and technology infrastructure; laws and regulations regarding privacy, data use, data protection, data security, data localization, network security, consumer protection, payments, advertising, and restrictions on pricing or discounts; compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties; laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and geopolitical events, including war and terrorism.
Harm to our reputation could adversely impact our ability to attract and retain guests, associates, vendors, and/or other partners.
Negative publicity or perceptions involving us or our brands, products, associates, operations, vendors, spokespersons, or marketing and other partners may negatively impact our reputation and adversely affect our ability to attract and retain guests, associates, vendors, and/or other partners. Failure to detect, prevent, or mitigate issues that might give rise to reputational risk or failure to adequately address negative publicity or perceptions could adversely impact our business, results of operations, and financial condition. Issues that might pose a reputational risk include failure of our cybersecurity measures to protect against cybersecurity incidents; product liability and product recalls; inaccurate claims regarding the sustainability or content/ingredients of the products sold in our stores, including in connection with our Conscious Beauty program; our social media activity; our handling of issues relating to corporate responsibility matters, including our responses to such matters; failure to comply with applicable laws and regulations or enforce our own policies; public stances on controversial social or political issues; concerns surrounding labor, environmental, workplace safety, and other practices that may vary from U.S. standards in any of our foreign vendors or partners, whether directly or indirectly; and any of the other risks enumerated in these risk factors. As part of our marketing efforts, we rely on social media platforms and other digital marketing to attract and retain guests. A variety of risks are associated with our social media activity and digital marketing, including the improper disclosure of proprietary information, negative comments about or negative incidents regarding us, exposure of personally identifiable information, fraud, or out-of-date information. The inappropriate use of social media and digital marketing vehicles by us, our guests, associates, or others could increase our costs, lead to litigation, or result in negative publicity that could damage our reputation. Many social media platforms immediately publish the content, videos, and/or photographs created or uploaded by their subscribers and participants, often without filters or checks on accuracy of the content posted. Information posted on such platforms at any time may be adverse to our interests and/or inaccurate. The dissemination of negative information related to us or our brands, products, associates, operations, vendors, spokespersons, or partners could harm our business, results of operations, and financial condition, regardless of the information’s accuracy, and the harm may be immediate without affording us an opportunity for redress or correction. It may be difficult to address negative publicity across media channels, regardless of its accuracy or the reputability of its source, and this challenge could be further exacerbated by fictitious media content, such as content produced by generative AI or bad actors. Furthermore, the prevalence of news coverage, the internet, and social media may accelerate and increase the potential scope of any negative publicity we might receive and could increase the negative impact of these issues on our reputation, business, results of operations, and financial condition.
We rely on our good relationships with brand partners to purchase prestige, mass, and salon beauty products on reasonable terms, and to offer certain brands or products that are permanently or temporarily exclusive to us. If these relationships were to be impaired, or if certain brand partners were to change their distribution model or are unable to supply sufficient merchandise to keep pace with our growth plans, we may not be able to obtain a sufficient selection or volume of merchandise on reasonable terms, and we may not be able to respond promptly to changing trends in beauty products, either of which could have a material adverse effect on our competitive position, business, financial condition, profitability, and cash flows.
We have no long-term supply agreements with brand partners, and therefore, our success depends on maintaining good relationships with our brand partners. Our business depends to a significant extent on the willingness and ability of our brand partners to supply us with a sufficient selection and volume of products to stock our stores. Some of our prestige brand partners may not have the capacity to supply us with sufficient merchandise to keep pace with our growth plans. We also have strategic partnerships with certain core brands, which have allowed us to benefit from the growing popularity of such brands. Any of our brand partners could in the future decide to scale back or end its partnership with us and strengthen its relationship with our competitors, which could negatively impact the revenue we earn from the sale of such products. If we fail to maintain strong relationships with our existing brand partners, or if we fail to continue acquiring and strengthening relationships with additional brand partners of beauty products, our ability to obtain a sufficient amount and variety of merchandise on reasonable terms may be limited, which could have a negative impact on our competitive position.
During fiscal 2024 and fiscal 2023, merchandise supplied to Ulta Beauty by our top ten brand partners accounted for approximately 54% and 55% of our net sales, respectively. There continues to be vendor consolidation within the beauty products industry. The loss of or a reduction in the amount of merchandise made available to us by any one of these key vendors, or by any of our other brand partners, could have a material adverse effect on our business, financial condition, profitability, and cash flows.
We also offer products that are permanently exclusive to us and offer a number of brands and products that are exclusive to us for a limited period of time or are offered in advance of our competitors. If our brand partners ceased granting us permanent or temporary exclusive rights our net sales could be negatively impacted, which could have a material adverse effect on our business, financial condition and profitability.
Our business depends on our ability to effectively manage our inventory. Risk of inventory loss (also called shrink) is inherent in the retail business. We have historically experienced inventory shrink due to damage, theft (including from organized retail crime), and other causes. While some level of inventory shrink is unavoidable, in recentpast years we have experienced levels of inventory shrink greater than our historical levels, which have adversely affected, and could continue to adversely affect, our results of operations and financial condition. To protect against inventory shrink, we have taken, and may continue to take, certain operational and strategic actions that could adversely affect our reputation, guest experience, and results of operations.
Our private label brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market, and retail exclusive private label brand merchandise.
In addition to merchandise provided by vendors, we offer private label brand merchandise, which subjects us to certain risks, including:
Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations, and financial condition.
We may not realize the anticipated benefits of acquisitions, joint ventures, and partnerships, or these benefits may take longer to realize than expected.
From time to time, we may make strategic acquisitions and participate in joint ventures and partnerships. Acquisitions, joint ventures, and partnerships we have entered into, or may enter into in the future, may involve significant challenges and risks, including that the acquisitions, joint ventures, or partnerships do not advance our business strategy or fail to produce satisfactory returns on investment. Other risks could include difficulties in integrating acquisitions with our operations, applying internal control processes to these acquisitions (including those related to cybersecurity), managing strategic investments, and/or combining business cultures; regulatory or compliance exposure until appropriate processes and controls are implemented; integration costs and significant attention from management and personnel; failing to realize the anticipated benefits of acquisitions, joint ventures, or partnerships, or the realization of benefits being significantly delayed, including because the businesses acquired may not be complementary or compatible with our business strategy or may not enhance our market position, footprint, or capability set; and due diligence evaluations of potential transactions not identifying all of the business, legal, compliance, and financial risks to accurately estimate the impact of a particular acquisition, joint venture, or partnership, including potential exposure to regulatory sanctions resulting from an acquisition target’s or business partner’s previous activities.
Our comparable sales and quarterly financial performance may fluctuate for a variety of reasons, which could result in a decline in the price of our common stock.
Our comparable sales and quarterly results of operations have fluctuated in the past, and we expect them to continue to fluctuate in the future. A variety of factors affect our comparable sales and quarterly financial performance, including:
Accordingly, our results for any one fiscal quarter are not necessarily indicative of the results to be expected for any other quarter, and comparable sales for any particular future period may decrease. In that event, the price of our common stock may decline.
We currently operate four regional distribution centers, which house the distribution operations for Ulta Beauty retail stores together with the order fulfillment operations of our e-commerce platform, one fast fulfillment center (e-commerce only), and two market fulfillment centers, which focus on our most productive products and support e-commerce and retail stores. To support our expected future growth and to maintain the efficient operation of our business, it is likely additional distribution facilities will be added in the future. Our failure to effectively upgrade and expand our distribution capacity on a timely basis to keep pace with our anticipated growth in stores and the performance of our distribution centers could have a material adverse effect on our business, financial condition, profitability, and cash flows.
If our marketing, advertising and promotional programs are unsuccessful, our results of operations and financial condition could be adversely affected.
Customer traffic and demand for our merchandise are influenced by our advertising, marketing, and promotional activities. We use marketing, advertising, and promotional programs to attract customers through various media, including social media, websites, mobile applications, email, and print. Our future growth and profitability will depend in part upon the effectiveness and efficiency of our advertising and marketing programs. Further, disruption to certain media channels could have a material adverse effect on our results of operations and financial condition.
Management's Discussion & Analysis (MD&A)
New heading “Fiscal year 2025 versus fiscal year 2024”
New heading “Interest income, net”
New heading “Impairment of goodwill and other intangible assets”
New heading “Business combinations”
Removed heading “Fiscal year 2023 versus fiscal year 2022”
Largest changes
“Impairment of goodwill and other intangible assets”see in full comparison
“We review goodwill and other intangible assets for impairment annually or more frequently if events or circumstances indicate these assets might be impaired. An impairment loss would be recorded if the carrying amount of goodwill or other intangible assets exceeds their respective fair value. We do not believe there is a reasonable likelihood there will be a material change in the future estimates or assumptions we use to calculate our impairment charges. No impairment charges were recognized in fiscal 2025, 2024, or 2023.”see in full comparison
“If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could record impairment charges. In addition, we have estimated the economic lives of certain acquired tangible and intangible assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives change, depreciation or amortization expenses could increase or decrease, or the acquired asset could be impaired.”see in full comparison
Full comparison: every changed paragraph (74)
We were founded in 1990 as a beauty retailer at a time when prestige, mass, and salon products were sold through distinct channels – department stores for prestige products; drug stores and mass merchandisers for mass products; and salons and authorized retail outlets for professional hair care products. We developed a unique specialty retail concept that offers a broad range of brands and price points, select beauty services, and a convenient and welcoming shopping environment. We define our target consumer as a beauty enthusiast, a consumer who is passionate about the beauty category, uses beauty for self-expression, experimentation, and self-investment, and has high expectations for the shopping experience. WeBased on our consumer insights research, we estimate there are approximately 140 million beauty enthusiasts in the U.S. We believe our strategy provides us with the competitive advantages that have contributed to our financial performance.
Today, our U.S. operations (“Ulta U.S.”) make us the largest specialty beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care, bath and body products, hair care, salon styling tools, wellness products, and salon services. In addition to our U.S. operations, we are expanding our presence internationally through our subsidiary, Space NK, a luxury beauty retailer operating in the U.K. and Ireland, our joint venture in Mexico, and our franchise in the Middle East.
Today, we are the largest specialty beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products, wellness products, and salon services. Key aspectspoints of ourstrategic businessdifferentiation include: a differentiated assortment of approximatelyestablished 29,000and beautyemerging productsbrands across a variety of categories and price points as well as a variety of beauty services, including salon services, in more than 1,400 stores predominantly located in convenient, high-traffic locations; engagingour digitalconvenient experiencesomnichannel deliveredfootprint, offering products through our website,stores, Ulta.com,delivering immersive and personalized experiences through our mobiledigital applicationsplatforms, and providing the Ulta Beauty experience internationally through our partnerships; our best-in-class loyalty program that enables members to earn points for every dollar spent on products and beauty services and provides us with deep,a proprietarydeep customerunderstanding insightsof our customers and their preferences; and our ability to cultivate human connection with warm and welcoming guest experiences across all of our channels.
The continued growth of our business and any future increases in net sales, net income, and cash flows is dependent on our ability to execute our strategic priorities across fourthree foundational focus areasareas, as outlined in our Ulta Beauty Unleashed strategy: 1) Assortment:Drive curatingCore theBusiness bestGrowth ofthrough alloperational things beautyexcellence and wellnessan forelevated allgo-to-market beauty enthusiastsapproach; 2) Experience:Scale fosteringNew, authentic,Accretive empoweringBusinesses humanby connectionscapitalizing thaton inspire,key delightgrowth opportunities to ensure relevancy in a rapidly changing world; and engage guests at every touchpoint; 3) Loyalty:Align buildingOur lifelongFoundation loyaltyfor Future Success by optimizing our ways of working, streamlining our cost structure, and brandcultivating lovean throughengaging, memberassociate-centered growthculture. andUlta personalization;U.S. and 4) Access: engaging our guests wherever they want to shop by expanding our reach through seamless and immersive omnichannel experiences. We operateoperates in anthe attractivelarge and growing U.S. beauty products and salon services industry, and we believe our strong operating model, competitive advantages, and financial foundation, paired with our investments to drive our growth, position us to capture additional market share in the industry.
Comparable sales is a key metric that is monitored closely within the retail industry. Our comparable sales have fluctuated in the past, and we expect them to continue to fluctuate in the future. A variety of factors affect our comparable sales, including general U.S. economic conditions, changes in merchandise strategy or mix, and timing and effectiveness of our marketing activities, among others.
Over the long term, our growth strategy is to drive profitable growth and market share leadership in beauty and wellness through growing our comparable sales, expanding omnichannel capabilities, and opening new stores. Long-term operating profit is expected to increase as a result of our efforts to drive revenue growth, leverage fixed costs, improve merchandise margin, increase operating efficiencies, and grow other revenue, partially offset by incremental investments in new stores and technology to enhance the guest experience, people, assortment, advertising, and depreciation.
The overall U.S. beauty market expanded in 20232024 and 2024,2025, supported by on-goingongoing consumer engagement with and resilience in the beauty category. We remain confident that our differentiated and diverse business model, our commitment to strategic investments, and our highly engaged associates will continue to drive market share gains in the U.S. beauty category over the long term.
Persistent inflationary and macroeconomic pressures have impacted consumer spending habits broadly, which we believe may have contributed to lower sales trends throughout fiscal 2024.broadly. The continuation of inflationary and macroeconomic pressures could further impact our ability to grow sales and maintain historical profitability levels. In addition, inflation could cause the interest rates on any future debt to remain at an elevated level or increase.
We recognize merchandise revenue at the point of sale in our retail stores. E-commerce sales are recognized upon shipment or guest pickup of the merchandise based on meeting the transfer of control criteria. Retail store and e-commerce sales are recorded net of estimated returns. Shipping and handling are treated as costs to fulfill the contract and not a separate performance obligation. Accordingly, we recognize revenue for our single performance obligation related to online sales at the time control of the merchandise passes to the customer,guest, which is at the time of shipment or guest pickup. We provide refunds for merchandise returns within 30 days from the original purchase date. State sales taxes are presented on a net basis as we consider our selfourselves a pass-through conduit for collecting and remitting state sales tax. Salon service revenue is recognized at the time the service is provided to the guest. Gift card sales revenue is deferred until the guest redeems the gift card. Company coupons and other incentives are recorded as a reduction of net sales. Other revenue includes the private label and co-branded credit card programs, royalties derived from the partnership with Target Corporation, and deferred revenue related to the loyalty program and gift card breakage.breakage, and royalties.
Comparable sales reflect sales for stores and e-commerce platforms beginning on the first day of the 14th month of operation. Therefore, a store is included in our comparable store base on the first day of the period after one year of operations plus the initial one-month grand opening period. Non-comparable store sales include sales from new stores that have not yet completed their 13th month of operation and stores that were closed for part or all of the period in either year. Remodeled stores are included in comparable sales unless the store was closed for a portion of the current or prior period. Comparable sales include retail sales, salon services, and e-commerce. In fiscal years with 53 weeks, the 53rd week of comparable sales is included in the calculation. In the year following a 53-week year, the prior year period is shifted by one week to compare similar calendar weeks. There may be variations in the way in which some of our competitors and other retailers calculate comparable or same store sales.
Interest income represents interest from cash equivalents, which includeincludes highly liquid investments such as money market funds and certificates of deposit with an original maturity of three months or less from the date of purchase. Interest expense includes interest costs and facility fees associated with our credit facility, which is structured as an asset-based lending instrument.facilities. Our credit facility interest isrates are based on a variable interest rate structure which can result in increased cost in periods of rising or elevated interest rates.
Income tax expense reflects the federal and foreign statutory tax raterates and the weighted average state statutory tax rate for the states in which we operate stores.
Equity net loss of affiliate represents our proportionate share of net loss from equity method investees.
Our fiscal years are the 52- or 53-week periods ending on the Saturday closest to January 31.31 each year. The Company’s fiscal years ended January 31, 2026 (fiscal 2025), February 1, 2025 (fiscal 2024), and February 3, 2024 (fiscal 2023), were 52-, 52-, and January 28, 2023 (fiscal 2022) were 52, 53, and 52 week53-week years, respectively.
As of February 1, 2025, we operated 1,445 stores across 50 states. The following tables present the components of our consolidated results of operations for the periods indicated:
Fiscal year 2025 versus fiscal year 2024
Net sales increased $1.1 billion, or 9.7%, to $12.4 billion in fiscal 2025 compared to $11.3 billion in fiscal 2024. The net sales increase was primarily due to increased comparable sales, the acquisition of Space NK, and sales from new stores. The total comparable sales increase of 5.4% in fiscal 2025 was driven by a 3.3% increase in average ticket and a 2.0% increase in transactions. The total comparable sales increase in fiscal 2024 was 0.7%.
Gross profit increased $458.0 million, or 10.4%, to $4.8 billion in fiscal 2025 compared to $4.4 billion in fiscal 2024. Gross profit as a percentage of net sales increased to 39.1% in fiscal 2025 compared to 38.8% in fiscal 2024. The increase in gross profit margin was primarily due to lower inventory shrink and higher merchandise margin, partially offset by adverse channel mix, deleverage of other revenue, and deleverage of store fixed expenses.
SG&A expenses increased $487.8 million, or 17.4%, to $3.3 billion in fiscal 2025 compared to $2.8 billion in fiscal 2024. As a percentage of net sales, SG&A expenses increased to 26.6% in fiscal 2025 compared to 24.9% in fiscal 2024. The deleverage of SG&A expenses was primarily due to higher incentive compensation, higher store payroll and benefits, higher corporate overhead primarily due to strategic investments, and higher store expenses.
Pre-opening expenses increased $2.1 million, or 15.6%, to $15.8 million in fiscal 2025 compared to $13.7 million in fiscal 2024.
Net interest expense was $1.8 million in fiscal 2025 compared to $15.1 million of net interest income in fiscal 2024. The increase in interest expense was primarily due to increased borrowings on our credit facilities in fiscal 2025. As of January 31, 2026, we had $62.3 million outstanding under our credit facilities. We did not have any outstanding borrowings on the credit facilities as of February 1, 2025.
Income tax expense of $373.9 million in fiscal 2025 represented an effective tax rate of 24.5%, compared to fiscal 2024 income tax expense of $378.9 million and an effective tax rate of 24.0%.
Equity net loss of affiliate was $3.9 million in fiscal 2025 related to our joint venture in Mexico.
Net income decreased $47.6 million to $1.15 billion in fiscal 2025 compared to $1.20 billion in fiscal 2024. The decrease in net income was primarily due to a $487.8 million increase in SG&A expenses, a $16.9 million increase in net interest expense, a $3.9 million increase in equity net loss of affiliate, and a $2.1 million increase in pre-opening expenses, partially offset by a $458.0 million increase in gross profit and a $5.1 million decrease in income taxes.
Gross profit increased $6.2 million, or 0.1%, to $4.39 billion in fiscal 2024, compared to $4.38 billion in fiscal 2023. Gross profit as a percentage of net sales decreased 30 basis points to 38.8% in fiscal 2024 compared to 39.1% in fiscal 2023. The decrease in gross profit margin was primarily due to: lower merchandise margin, deleverage of store fixed costs, and higher supply chain costs, partially offset by lower inventory shrink and favorable channel mix.
SG&A expenses increased $114.0 million, or 4.2%, to $2.8 billion in fiscal 2024 compared to $2.7 billion in fiscal 2023. As a percentage of net sales, SG&A expenses increased 90 basis points to 24.9% in fiscal 2024 compared to 24.0% in fiscal 2023. The deleverage of SG&A expenses was primarily due to: deleverage of store payroll and benefits, corporate overhead due to strategic investments, and store expenses, partially offset by lower incentive compensation.
Interest income, net
Net interest income was $15.1 million in fiscal 2024 compared to $17.6 million in fiscal 2023, due to lower average cash balances. We did not have any outstanding borrowings on our credit facilityfacilities as of February 1, 2025 and February 3, 2024.
Income tax expense of $378.9 million in fiscal 2024 representsrepresented an effective tax rate of 24.0%, compared to fiscal 2023 income tax expense of $404.6 million and an effective tax rate of 23.9%.
Fiscal year 2023 versus fiscal year 2022
Net sales increased $998.7 million, or 9.8%, to $11.2 billion in fiscal 2023 compared to $10.2 billion in fiscal 2022. The net sales increase was primarily due to increased comparable sales, strong new store performance, an increase of $68.3 million in other revenue and the benefit of an extra week of sales in fiscal 2023. Net sales for the 53rd week of fiscal 2023 were approximately $181.9 million. The total comparable sales increase of 5.7% in fiscal 2023, compared to an increase of 15.6% in fiscal 2022, was driven by a 7.4% increase in transactions and a 1.5% decrease in average ticket.
Gross profit increased $336.6 million, or 8.3%, to $4.4 billion in fiscal 2023, compared to $4.0 billion in fiscal 2022. Gross profit as a percentage of net sales decreased 50 basis points to 39.1% in fiscal 2023 compared to 39.6% in fiscal 2022. The decrease in gross profit margin was primarily due to:
SG&A expenses increased $299.3 million, or 12.5%, to $2.7 billion in fiscal 2023 compared to $2.4 billion in fiscal 2022. As a percentage of net sales, SG&A expenses increased 50 basis points to 24.0% in fiscal 2023 compared to 23.5% in fiscal 2022. The deleverage of SG&A expenses was primarily due to:
Pre-opening expenses decreased $2.1 million, or 19.7%, to $8.5 million in fiscal 2023 compared to $10.6 million in fiscal 2022.
Net interest income was $17.6 million in fiscal 2023 compared to $4.9 million in fiscal 2022, due to higher average interest rates on cash balances. We did not have any outstanding borrowings on our credit facility as of February 3, 2024 and January 28, 2023.
Income tax expense of $404.6 million in fiscal 2023 represents an effective tax rate of 23.9%, compared to fiscal 2022 income tax expense of $401.1 million and an effective tax rate of 24.4%. The lower income tax rate is primarily due to a decrease in state income taxes compared to fiscal 2022 and a tax benefit from the income tax accounting for stock-based compensation.
Net income increased $48.6 million to $1.3 billion in fiscal 2023 compared to $1.2 billion in fiscal 2022. The increase in net income was primarily due to a $336.6 million increase in gross profit, partially offset by a $299.3 million increase in SG&A expenses and a $3.5 million increase in income taxes.
Our primary sources of liquidity are cash and cash equivalents, cash flows from operations, and borrowings under our credit facility.facilities. The most significant components of our working capital are merchandise inventories, cash and cash equivalents, and receivables, reduced by accounts payable, deferred revenue, and accrued liabilities. As of FebruaryJanuary 1,31, 20252026 and February 3,1, 2024,2025, we had cash and cash equivalents of $703.2$424.2 million and $766.6$703.2 million, respectively.
The following table summarizes contractual cash requirements as of FebruaryJanuary 1,31, 20252026:
Purchase obligations reflect legally binding agreements entered into by the Company to purchase goods or services. The amount of purchase obligations relates to commitments for products and services and other goods and service contracts entered into as of FebruaryJanuary 1,31, 2025.2026. Excluded from purchase obligations are normal purchases and contracts entered into in the ordinary course of business.
The increase in net cash provided by operating activities in fiscal 2025 compared to fiscal 2024 is mainly due to a lower increase in merchandise inventories in fiscal 2025 and timing of accrued liabilities and deferred revenue.
Merchandise inventories, net were $2.2 billion at January 31, 2026, compared to $2.0 billion at February 1, 2025, representing an increase of $212.9 million or 10.8%. The increase in total inventory is primarily due to new brand launches, the acquisition of Space NK, and the addition of new Ulta Beauty stores in the U.S.
Merchandise inventories, net were $2.0 billion at February 1, 2025, compared to $1.7 billion at February 3, 2024, representing an increase of $226.1 million or 13.0%. The increase in total inventory is primarily due to the following:
The decrease in net income was primarily due to an increase in SG&A expenses and pre-opening expenses, partially offset by a decrease in income taxes and an increase in gross profit.
The decrease in net cash provided by operating activities in fiscal 2023 compared to fiscal 2022 is mainly due to the timing of accrued liabilities, accounts payable, receivable collections, prepaid income taxes, and prepaid expenses and other current assets and a larger increase in merchandise inventories in fiscal 2023, partially offset by the increase in net income and non-cash lease expense.
We have historically used cash primarily for new, remodeled, relocated, and refreshed stores, supply chain investments, short-term investments, and investments in information technology systems. Investment activities for capital expenditures were $434.8 million during fiscal 2025, compared to $374.5 million during fiscal 2024,2024. comparedPurchases toof $435.3short-term investments were $70.0 million during fiscal 2023.2025 and consisted of certificates of deposit with maturities of three to twelve months from the date of purchase.
The increase in net cash used in investing activities in fiscal 2025 relative to fiscal 2024 was primarily due to the acquisition of Space NK in the second quarter of fiscal 2025.
The increase in net cash used in investing activities in fiscal 2023 relative to fiscal 2022 was primarily due to more capital expenditures for new, remodeled, and relocated stores and information technology systems compared to fiscal 2022.
The following table presents a summary of our consolidated store activities during the last three years:
During fiscal 2024,2025, the average investment required to open a new Ulta Beauty store in the U.S. was approximately $2.1$2.4 million, which includesincluded capital investment net of landlord contributions, pre-opening expenses, and initial inventory net of payables.
Capital expenditures were $434.8 million, $374.5 million, and $435.3 million in fiscal 2025, fiscal 2024, and fiscal 2023, respectively.
Capital expenditures during the last three years by major category are as follows:
Our future investments will depend primarily on the number of new, remodeled, and relocated stores, information technology systems investments, and supply chain investments that we undertake and the timing of these expenditures. Based on past performance and current expectations, we believe our sources of liquidity will be sufficient to fund future capital expenditures. We expect fiscal 2025 capital expenditures will not be upgreater tothan $500$450 million in fiscal 2026 and will primarily be used primarily to fund our new, remodeled, and relocated stores and strategic priorities, including investments in information technology systems and supply chain optimization.
Financing activities include share repurchases, borrowingborrowings and repaymentrepayments ofunder our revolving credit facility,facilities, and capital stock transactions. Purchases of treasury shares represent the fair value of common shares repurchased from plan participants in connection with shares withheld to satisfy minimum statutory tax obligations upon the vesting of restricted stock.
The decrease in net cash used in financing activities in fiscal 2025 relative to fiscal 2024 was primarily due to a decrease in share repurchases.
As of January 31, 2026, we had $62.3 million outstanding under our credit facilities. We did not have any outstanding borrowings on the credit facilities as of February 1, 2025 or February 3, 2024.
The increase in net cash used in financing activities in fiscal 2023 relative to fiscal 2022 was primarily due to an increase in share repurchases and less stock options exercised.
We had no borrowings outstanding under the credit facility at the end of fiscal 2024, 2023, and 2022. The zero outstanding borrowings position is due to a combination of factors including sales demand, overall performance of management initiatives including expense control, and inventory and other working capital reductions. We may require borrowings under the facility from time to time in future periods for unexpected business disruptions, to support our new store program, seasonal inventory needs, or share repurchases.
In March 2022, the Board of Directors authorized a share repurchase program (the 2022 Share Repurchase Program) pursuant to which the Company could repurchase up to $2.0 billion of the Company’s common stock. The 2022 Share Repurchase Program revoked the previously authorized but unused amounts from thean earlier share repurchase program. The 2022 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.
In March 2024, the Board of Directors authorized a share repurchase program (the March 2024 Share Repurchase Program) pursuant to which the Company could repurchase up to $2.0 billion of the Company’s common stock. The March 2024 Share Repurchase Program authorization revoked the previously authorized but unused amounts fromunder the 2022 Share Repurchase Program. The March 2024 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended January 31, 2026, which could materially affect our business, financial condition, financial results, or future performance. There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended January 31, 2026.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Comparison of 26 weeks ended August 1, 2026 to 26 weeks ended August 2, 2025”
Largest changes
“Comparison of 26 weeks ended August 1, 2026 to 26 weeks ended August 2, 2025”see in full comparison
“As of August 1, 2026 and August 2, 2025, the Company had $287.0 million and $237.7 million, respectively, of borrowings outstanding under this credit facility. The weighted average interest rate was 6.05% and 6.89% for the 26 weeks ended August 1, 2026 and August 2, 2025, respectively. As of January 31, 2026, there were no borrowings outstanding under this credit facility.”see in full comparison
“Net sales increased $562.7 million, or 10.0%, to $6.2 billion for the 26 weeks ended August 1, 2026, compared to $5.6 billion for the 26 weeks ended August 2, 2025. The net sales increase was primarily due to increased comparable sales, the acquisition of Space NK, and sales from new stores. The comparable sales increase of 4.6% for the 26 weeks ended August 1, 2026 was driven by a 3.8% increase in average ticket and a 0.8% increase in transactions. The total comparable sales increase for the 26 weeks ended August 2, 2025 was 4.7%.”see in full comparison
“Income tax expense of $198.7 million for the 26 weeks ended August 1, 2026 represents an effective tax rate of 24.2%, compared to $184.4 million of income tax expense representing an effective tax rate of 24.5% for the 26 weeks ended August 2, 2025. The lower income tax rate is primarily due to the purchase of transferable federal tax credits. These federal tax credits were purchased at a negotiated discount, resulting in an income tax benefit recorded during the 26 weeks ended August 1, 2026.”see in full comparison
“Gross profit increased $248.7 million, or 11.3%, to $2.5 billion for the 26 weeks ended August 1, 2026, compared to $2.2 billion for the 26 weeks ended August 2, 2025. Gross profit as a percentage of net sales increased to 39.6% for the 26 weeks ended August 1, 2026, compared to 39.1% for the 26 weeks ended August 2, 2025. The increase in gross profit margin was primarily due to lower inventory shrink and higher merchandise margin, partially offset by unfavorable channel and business mix.”see in full comparison
“SG&A expenses increased $165.1 million, or 11.4%, to $1.6 billion for the 26 weeks ended August 1, 2026, compared to $1.5 billion for the 26 weeks ended August 2, 2025. SG&A expenses as a percentage of net sales increased to 26.1% for the 26 weeks ended August 1, 2026, compared to 25.8% for the 26 weeks ended August 2, 2025, primarily due to higher corporate overhead due to strategic enterprise investments and higher store expenses, partially offset by lower incentive compensation.”see in full comparison
Full comparison: every changed paragraph (41)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this Quarterly Report. This discussion contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to, among other things, future events and financial performance. These forward-looking statements are included throughout this Quarterly Report on Form 10-Q, and relate to matters such as our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity, share repurchases, and capital resources and other financial and operating information. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “plans,” “estimates,” “targets,” “strategies,” or other comparable words.
We were founded in 1990 as a beauty retailer at a time when prestige, mass, and salon products were sold through distinct channels – department stores for prestige products; drug stores and mass merchandisers for mass products; and salons and authorized retail outlets for professional hair carehaircare products. We developed a unique specialty retail concept that offers a broad range of brands and price points, select beauty services, and a convenient and welcoming shopping environment. We define our target consumer as a beauty enthusiast, a consumer who is passionate about the beauty category, uses beauty for self-expression, experimentation, and self-investment, and has high expectations for their shopping experience. Based on our consumer insights research, we estimate there are approximately 140 million beauty enthusiasts in the U.S. We believe our strategy provides us with competitive advantages that have contributed to our financial performance.
Today, our U.S. operations (“Ulta U.S.”) make us the largest specialty beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care,skincare, bath and body products, hair care,haircare, salon styling tools, wellness products, and salon services. In addition to our U.S. operations, we are expanding our presence internationally through our subsidiary, Space NK, a luxury beauty retailer operating in the U.K. and Ireland, our joint venture in Mexico, and our franchise in the Middle East.
The continued growth of our business and any future increases in net sales, net income, and cash flows isare dependent on our ability to execute our strategic priorities across three foundational focus areas, as outlined in our Ulta Beauty Unleashed strategy: 1) Drive Core Business Growth through operational excellence and an elevated go-to-market approach; 2) Scale New, Accretive Businesses by capitalizing on key growth opportunities to ensure relevancy in a rapidly changing world; and 3) Align Our Foundation for Future Success by optimizing our ways of working, streamlining our cost structure, and cultivating an engaging, associate-centered culture. Ulta U.S. operates in the large and growing U.S. beauty products and salon services industry, and we believe our strong operating model, competitive advantages, and financial foundation, paired with our investments to drive our growth, position us to capture additional market share in the industry.
The overall U.S. beauty market expanded in 2025 and the first quarterhalf of 2026, supported by ongoing consumer engagement with and resilience in the beauty category. We remain confident that our differentiated and diverse business model, our commitment to strategic investments, and our highly engaged associates will continue to drive market share gains in the U.S. beauty category over the long term.
We recognize merchandise revenue at the point of sale in our retail stores. E-commerce sales are recognized upon shipment or guest pickup of the merchandise based on meeting the transfer of control criteria. Retail store and e-commerce sales are recorded net of estimated returns. Shipping and handling are treated as costs to fulfill the contract and not a separate performance obligation. Accordingly, we recognize revenue for our single performance obligation related to online sales at the time control of the merchandise passes to the guest,customer, which is at the time of shipment or guest pickup. We provide refunds for merchandise returns within 30 days from the original purchase date. State sales taxes are presented on a net basis as we consider ourselves a pass-through conduit for collecting and remitting state sales tax. Salon service revenue is recognized at the time the service is provided to the guest. Gift card sales revenue is deferred until the guest redeems the gift card. Company coupons and other incentives are recorded as a reduction of net sales. Other revenue includes the private label and co-branded credit card programs, deferred revenue related to the loyalty program and gift card breakage, and royalties.
Interest income represents interest from cash equivalents, which includesinclude highly liquid investments such as money market funds and certificates of deposit with an original maturity of three months or less from the date of purchase. Interest expense includes interest costs and facility fees associated with our credit facilities.facilities, which are structured as asset-based lending instruments. Our credit facility interest rates are based on a variable interest rate structure,structure which can result in increased costcosts in periods of rising or elevated interest rates.
Income tax expense reflects the federal and foreign statutory tax ratesrate and the weighted average state statutory tax rate for the states in which we operate stores.
Our quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31 each year. The Company’s firstsecond quartersquarter in fiscal 2026 and 2025 ended on MayAugust 2,1, 2026 and MayAugust 3,2, 2025, respectively. Our quarterly results of operations have varied in the past and are likely to do so again in the future. As such, we believe that period-to-period comparisons of our results of operations should not be relied upon as an indication of our future performance.
Comparison of 13 weeks ended MayAugust 2,1, 2026 to 13 weeks ended MayAugust 3,2, 2025
Net sales increased $315.5$247.2 million, or 11.1%,8.9%, to $3.2$3.0 billion for the 13 weeks ended MayAugust 2,1, 2026, compared to $2.8 billion for the 13 weeks ended MayAugust 3,2, 2025. The net sales increase was primarily due to increased comparable sales, the acquisition of Space NK, and sales from new stores. The total comparable sales increase of 5.3%3.8% for the 13 weeks ended MayAugust 2,1, 2026 was primarily driven by a 3.7%3.9% increase in average ticket and a 1.6% increase in transactions.ticket. The total comparable sales increase for the 13 weeks ended MayAugust 3,2, 2025 was 2.9%.6.7%.
Gross profit increased $153.4$95.3 million, or 13.8%,8.7%, to $1.3$1.2 billion for the 13 weeks ended MayAugust 2,1, 2026, compared to $1.1 billion for the 13 weeks ended MayAugust 3,2, 2025. Gross profit as a percentage of net sales increased to 40.1% for the 13 weeks ended May 2, 2026 compareddecreased to 39.1% for the 13 weeks ended MayAugust 3,1, 2026, compared to 39.2% for the 13 weeks ended August 2, 2025. The increasedecrease in gross profit margin was primarily due to lowerthe inventoryimpact shrinkof andthe higherSpace merchandiseNK margin.business mix.
Selling, general and administrative (SG&A) expenses increased $104.1$61.0 million, or 14.6%,8.2%, to $814.7$802.8 million for the 13 weeks ended MayAugust 2,1, 2026, compared to $710.6$741.7 million for the 13 weeks ended MayAugust 3,2, 2025, primarily due to the acquisition of Space NK.2025. SG&A expenses as a percentage of net sales increaseddecreased to 25.8%26.4% for the 13 weeks ended MayAugust 2,1, 20262026, compared to 24.9%26.6% for the 13 weeks ended MayAugust 3,2, 2025, primarily due to deleveragelower incentive compensation and leverage of corporate overhead due to strategic enterprise investments and store expenses,investments, partially offset by leverage ofhigher advertising expenses.
Pre-opening expenses were $4.7$4.5 million for the 13 weeks ended MayAugust 2,1, 20262026, compared to $1.8$5.1 million for the 13 weeks ended MayAugust 3,2, 2025.
Interest income,expense, net was $0.7$3.7 million for the 13 weeks ended MayAugust 2,1, 20262026, compared to $3.5interest income, net of $1.4 million for the 13 weeks ended MayAugust 3,2, 2025. As of MayAugust 1, 2026 and August 2, 2026,2025, we had $144.9$339.6 million and $289.1 million, respectively, outstanding under our credit facilities. We did not have any outstanding borrowings on the credit facilities as of May 3, 2025.
Income tax expense of $106.9$91.9 million for the 13 weeks ended MayAugust 2,1, 2026 represents an effective tax rate of 23.9%,24.6%, compared to $99.6$84.8 million of income tax expense representing an effective tax rate of 24.6%24.5% for the 13 weeks ended MayAugust 3,2, 2025. The lower income tax rate is primarily due to the purchase of transferable federal tax credits. These federal tax credits were purchased at a negotiated discount, resulting in an income tax benefit recorded during the quarter.
Equity net loss of affiliate was $1.6$2.1 million for the 13 weeks ended MayAugust 2,1, 2026 compared to $0.6 million for the 13 weeks ended MayAugust 3,2, 2025, and was related to our joint venture in Mexico.Mexico in both periods.
Net income wasincreased $340.58.1% to $282.0 million for the 13 weeks ended MayAugust 2,1, 2026, compared to $305.1$260.9 million for the 13 weeks ended MayAugust 3,2, 2025. The increase in net income is primarily relateddue to the $153.4$95.3 million increase in gross profit, partially offset by the $104.1$61.0 million increase in SG&A expenses, the $7.2$7.1 million increase in income tax expense,taxes, and the $2.9$5.1 million decreaseincrease in interest income,expense, net.
Comparison of 26 weeks ended August 1, 2026 to 26 weeks ended August 2, 2025
Net sales increased $562.7 million, or 10.0%, to $6.2 billion for the 26 weeks ended August 1, 2026, compared to $5.6 billion for the 26 weeks ended August 2, 2025. The net sales increase was primarily due to increased comparable sales, the acquisition of Space NK, and sales from new stores. The comparable sales increase of 4.6% for the 26 weeks ended August 1, 2026 was driven by a 3.8% increase in average ticket and a 0.8% increase in transactions. The total comparable sales increase for the 26 weeks ended August 2, 2025 was 4.7%.
Gross profit increased $248.7 million, or 11.3%, to $2.5 billion for the 26 weeks ended August 1, 2026, compared to $2.2 billion for the 26 weeks ended August 2, 2025. Gross profit as a percentage of net sales increased to 39.6% for the 26 weeks ended August 1, 2026, compared to 39.1% for the 26 weeks ended August 2, 2025. The increase in gross profit margin was primarily due to lower inventory shrink and higher merchandise margin, partially offset by unfavorable channel and business mix.
SG&A expenses increased $165.1 million, or 11.4%, to $1.6 billion for the 26 weeks ended August 1, 2026, compared to $1.5 billion for the 26 weeks ended August 2, 2025. SG&A expenses as a percentage of net sales increased to 26.1% for the 26 weeks ended August 1, 2026, compared to 25.8% for the 26 weeks ended August 2, 2025, primarily due to higher corporate overhead due to strategic enterprise investments and higher store expenses, partially offset by lower incentive compensation.
Pre-opening expenses were $9.2 million for the 26 weeks ended August 1, 2026, compared to $6.9 million for the 26 weeks ended August 2, 2025.
Interest expense, net was $3.0 million for the 26 weeks ended August 1, 2026, compared to interest income, net of $5.0 million for the 26 weeks ended August 2, 2025. As of August 1, 2026 and August 2, 2025, we had $339.6 million and $289.1 million, respectively, outstanding under our credit facilities.
Income tax expense of $198.7 million for the 26 weeks ended August 1, 2026 represents an effective tax rate of 24.2%, compared to $184.4 million of income tax expense representing an effective tax rate of 24.5% for the 26 weeks ended August 2, 2025. The lower income tax rate is primarily due to the purchase of transferable federal tax credits. These federal tax credits were purchased at a negotiated discount, resulting in an income tax benefit recorded during the 26 weeks ended August 1, 2026.
Equity net loss of affiliate was $3.7 million for the 26 weeks ended August 1, 2026 compared to $1.2 million for the 26 weeks ended August 2, 2025, and was related to our joint venture in Mexico in both periods.
Net income increased 10.0% to $622.5 million for the 26 weeks ended August 1, 2026, compared to $565.9 million for the 26 weeks ended August 2, 2025. The increase in net income is primarily due to the $248.7 million increase in gross profit, partially offset by the $165.1 million increase in SG&A expenses, the $14.3 million increase in income taxes, the $8.0 million increase in interest expense, net, and the $2.4 million increase in equity net loss of affiliate.
Our primary sources of liquidity are cash and cash equivalents, cash flows from operations, and borrowings under our credit facilities. The most significant components of our working capital are merchandise inventories, cash and cash equivalents, and receivables, reduced by accounts payable, deferred revenue, and accrued liabilities. As of MayAugust 2,1, 2026, January 31, 2026, and MayAugust 3,2, 2025, we had cash and cash equivalents and short-term investments of $166.3$213.5 million, $424.2$494.2 million, and $454.6$242.7 million, respectively.
The increase in net cash provided by operating activities in the first quarter26 weeks of fiscal 2026 compared to the first quarter26 weeks of fiscal 2025 was mainly due to the increase in net income and the timing of accounts payable, accounts receivable, and prepaid expenses and other current assets, partially offset byincome, a largersmaller increase in merchandise inventories in the first quarter26 weeks of fiscal 2026.2026, and the timing of accounts receivable, prepaid expenses, accounts payable, and accrued liabilities.
Merchandise inventories, net were $2.4 billion at MayAugust 2,1, 2026, remaining flat as compared to $2.1$2.4 billion at MayAugust 3,2, 2025, representing an increase of $264.9 million or 12.5%. The increase in total inventory is primarily due improved inventory management, partially offset by inventory to support new brand launches, the acquisition of Space NK,launches and the addition of new Ulta Beauty stores in the U.S.stores.
We have historically used cash primarily for new, remodeled, relocated, and refreshed stores, supply chain investments, short-term investments, and investments in information technology systems. Investing activities for capital expenditures were $58.3$139.5 million during the 1326 weeks ended MayAugust 2,1, 20262026, compared to $79.0$156.0 million during the 1326 weeks ended MayAugust 3,2, 2025.
The decrease in net cash used in investing activities in the first quarter26 weeks of fiscal 2026 compared to the first quarter26 weeks of fiscal 2025 was primarily due to lowerthe capitalacquisition expendituresof forSpace supplyNK chainin andthe merchandisingsecond fixturesquarter andof proceedsfiscal from short-term investments.2025.
Our future investments will depend primarily on the number of new, remodeled, and relocated stores, information technology systems investments,systems, and supply chain investments that we undertake and the timing of these expenditures. Based on past performance and current expectations, we believe our sources of liquidity will be sufficient to fund future capital expenditures.
Financing activities include share repurchases, borrowing and repayment of our revolvingshort-term credit facilities,debt, and capital stock transactions. Purchases of treasury shares represent the fair value of common shares repurchased from plan participants in connection with shares withheld to satisfy minimum statutory tax obligations upon the vesting of restricted stock.
The increase in net cash used in financing activities in the first quarter26 weeks of fiscal 2026 compared to the first quarter26 weeks of fiscal 2025 was primarily due to an increase in share repurchases.repurchases, partially offset by borrowings from short-term debt.
As of MayAugust 2,1, 2026 and2026, January 31, 2026, and August 2, 2025, we had $144.9$339.6 millionmillion, $62.3 million, and $62.3$289.1 million, respectively, outstanding under our credit facilities. WeShort-term diddebt not have any outstanding borrowings onat the credit facilities asend of Maythe 3,second 2025.quarter of fiscal 2026 was primarily to support working capital needs and ongoing capital allocation priorities, including share repurchases.
In October 2024, the Board of Directors authorized a share repurchase program (the “October 2024 Share Repurchase Program”) pursuant to which the Company may repurchase up to $3.0 billion of the Company’s common stock. The October 2024 Share Repurchase Program authorization revoked the previously authorized but unused amounts fromunder the share repurchase program that was authorized in March 2024. The October 2024 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time.
On August 27, 2025, we entered into Amendment No. 4 to the Second Amended and Restated Loan Agreement (as so amended, the “Loan Agreement”) with Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, and a Lender thereunder; Wells Fargo Bank, National Association and JPMorgan Chase Bank, N.A., as Lead Arrangers and Bookrunners; JPMorgan Chase Bank, N.A., as Syndication Agent and a Lender; and the other lenders party thereto. The Loan Agreement matures on March 13, 2029, provides maximum revolving loans equal to the lesser of $1.0 billion or a percentage of eligible owned inventory and eligible owned receivables (which borrowing base may, at the election of the Company and satisfaction of certain conditions, include a percentage of qualified cash), and contains a $50.0 million subfacility for letters of credit. The Loan Agreement contains a requirement to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 whenever availability under the Loan Agreement falls below a specified threshold. Substantially all of the Company’s assets are pledged as collateral for outstanding borrowings under the Loan Agreement. Outstanding borrowings bear interest, at the Company’s election, at either a base rate plus a margin of 0.5% to 1.0% or the Term Secured Overnight Financing Rate plus a margin of 1.5% to 2.0%, and a credit spread adjustment of 0.10%, with such margins based on the Company’s borrowing availability.availability, Theand the unused line fee is 0.25% to 0.375% per annum. As of May 2, 2026, there was $102.0 million outstanding under the Loan Agreement. As of January 31, 2026 and May 3, 2025, there were no borrowings outstanding under the Loan Agreement.
As of August 1, 2026 and August 2, 2025, the Company had $287.0 million and $237.7 million, respectively, of borrowings outstanding under this credit facility. The weighted average interest rate was 6.05% and 6.89% for the 26 weeks ended August 1, 2026 and August 2, 2025, respectively. As of January 31, 2026, there were no borrowings outstanding under this credit facility.
Ulta Beauty’s wholly owned subsidiary, Space NK, maintains a multi-currency revolving credit facility (the “Facility Agreement”) with National Westminster Bank plc, providing up to £40.0 million for working capital requirements. The Facility Agreement, maturing on April 17, 2028, allows Space NK to increase the revolving facility by an additional £10.0 million with lender consent. The facility is secured by the assets of Space NK and contains a requirement to maintain an interest coverage ratio of not less than 4.0 to 1.0 and a leverage ratio not to exceed 2.0 to 1.0 for any relevant period. Borrowings bear interest at either the compound or term Sterling Overnight Index Average plus a margin of 1.75%, and an unused line fee of 0.60% per annum. As of MayAugust 2,1, 2026 and JanuaryAugust 31,2, 2026,2025, there was $42.9$52.6 million and $62.3$51.4 million, respectively, outstanding under thethis Facilitycredit Agreement.facility.
As of MayAugust 2,1, 2026, we were in compliance with all terms and covenants of the Loan Agreement and Facility Agreement.
ULTA insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 3 filings (3 insiders, 3 trade dates, 2,983 shares, about $1.6M). Net open-market shares: -2,983 (purchases minus sales); net value about -$1.6M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-17 | Steelman Kecia |
Open-market sale | 2,000 | $545.88 | $1.1M |
| 2026-09-11 | Nagler Lorna |
Open-market sale | 600 | $537.31 | $322.4K |
| 2026-09-01 | Garcia Kelly E |
Grant/award | 2,933 | — | — |
| 2026-09-01 | Olson Brieane Lee |
Grant/award | 271 | — | — |
| 2026-06-15 | Mrkonic George R Jr |
Open-market sale | 383 | $475.84 | $182.2K |
| 2026-06-10 | Smith Mike C. |
Grant/award | 404 | — | — |
| 2026-06-10 | Nagler Lorna |
Grant/award | 404 | — | — |
| 2026-06-10 | Mrkonic George R Jr |
Grant/award | 404 | — | — |
| 2026-06-10 | Landry Stephenie Lee |
Grant/award | 404 | — | — |
| 2026-06-10 | Halligan Catherine Ann |
Grant/award | 404 | — | — |
| 2026-06-10 | Garcia Kelly E |
Grant/award | 404 | — | — |
| 2026-06-10 | Brok Martin |
Grant/award | 404 | — | — |
Well-known investors holding ULTA (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 362,413 | $163.4M | 0.06% | Reduced 28% |
| Renaissance Technologies | 2026-06-30 | 177,780 | $80.2M | 0.11% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 145,146 | $65.5M | 0.04% | Added 47% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 130,214 | $58.7M | 0.14% | Added 22% |
| PRIMECAP Management | 2026-06-30 | 61,000 | $27.5M | 0.02% | No change |
| Millennium Management (Israel Englander) | 2026-06-30 | 5,163 | $2.3M | 0.0% | Reduced 86% |
| Two Sigma Investments | 2026-06-30 | 4,780 | $2.2M | 0.0% | Added 67% |
| Bridgewater Associates | 2026-06-30 | 3,471 | $1.8M | — | Sold out |
| D. E. Shaw & Co. | 2026-06-30 | 3,906 | $1.8M | 0.0% | Reduced 97% |