2 unchanged sentences
We have established disclosure controls and procedures to ensure that material information relating to the Company is made known to the officers who certify our financial reports and to the members of our senior management and Board of Directors.
−Removed: Based on management’s evaluation as of February 1, 2020, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
+Added: Based on management’s evaluation as of January 30, 2021, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
−Removed: Internal control over financial reporting is a process designed by, or under the supervision of, the principal executive officer and principal financial officer and effected by the Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
−Removed: Under the supervision and with the participation of our principal executive officer and our principal financial officer, management evaluated the effectiveness of our internal control over financial reporting as of February 1, 2020, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO).
−Removed: Based on this evaluation, our principal executive officer and principal financial officer concluded that our internal controls over financial reporting were effective as of February 1, 2020.
−Removed: Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included in this Annual Report on Form 10-K, has audited the effectiveness of our internal control over financial reporting as of February 1, 2020 and has issued the attestation report included in Item 15 of this Annual Report on Form 10-K.
+Added: Internal control over financial reporting is a process designed by, or under the supervision of, the principal executive officer and principal financial officer and effected by the Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S generally accepted accounting principles.
+Added: Under the supervision and with the participation of our principal executive officer and our principal financial officer, management evaluated the effectiveness of our internal control over financial reporting as of January 30, 2021, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO).
+Added: Based on this evaluation, our principal executive officer and principal financial officer concluded that our internal controls over financial reporting were effective as of January 30, 2021.
+Added: Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included in this Annual Report on Form 10-K, has audited the effectiveness of our internal control over financial reporting as of January 30, 2021 and has issued the attestation report included in Item 15 of this Annual Report on Form 10-K.
Changes in internal control over financial reporting
−Removed: There were no changes to our internal controls over financial reporting during the 13 weeks ended February 1, 2020 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
+Added: There were no changes to our internal controls over financial reporting during the 13 weeks ended January 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Other Information
Directors, Executive Officers, and Corporate Governance
−Removed: The information required by this item with respect to our executive officers is set forth after Part I, Item 4 of this Annual Report on Form 10- K under the caption “Executive Officers of the Registrant.” The additional information required by this item is included under the captions “Corporate Governance – Code of Business Conduct,” “Corporate Governance – Nomination Process – Qualifications,” “Corporate Governance – Proposal One – Election of Directors,” “Corporate Governance – Information About Our Director Nominees,” “Corporate Governance – Information About Our Directors Continuing in Office” and “Corporate Governance – Audit Committee” in our definitive Proxy Statement for our 2020 Annual Meeting of Stockholders (the Proxy Statement) and is hereby incorporated herein by reference.
+Added: The information required by this item with respect to our executive officers is set forth in Part I, Item 4A of this Annual Report on Form 10- K under the caption “Executive Officers.” The additional information required by this item is included under the captions “Corporate Governance – Code of Business Conduct,” “Corporate Governance – Nomination Process – Qualifications,” “Corporate Governance – Proposal One – Election of Directors,” “Corporate Governance – Information About Our Director Nominees,” “Corporate Governance – Information About Our Directors Continuing in Office” and “Corporate Governance – Audit Committee” in our definitive Proxy Statement for our 2021 Annual Meeting of Stockholders (the Proxy Statement) and is hereby incorporated herein by reference.
We have a Code of Business Conduct that applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer, Controller, and other persons performing similar functions.
7 unchanged sentences
in the Proxy Statement and is hereby incorporated by reference.
−Removed: The information required by this item with respect to compensation plans under which our equity securities are authorized for issuance as of February 1, 2020 is set forth in Item 5 of this Annual Report on Form 10-K under the caption “Securities authorized for issuance under equity compensation plans.”
+Added: The information required by this item with respect to compensation plans under which our equity securities are authorized for issuance as of January 30, 2021 is set forth in Item 5 of this Annual Report on Form 10-K under the caption “Securities authorized for issuance under equity compensation plans.”
Certain Relationships and Related Transactions, and Director Independence
6 unchanged sentences
Consolidated Balance Sheets
−Removed: Consolidated Statements of Income
+Added: Consolidated Statements of Operations
+Added: Consolidated Statements of Comprehensive Income
Consolidated Statements of Cash Flows
6 unchanged sentences
We have audited the accompanying consolidated balance sheets of Ulta Beauty, Inc.
−Removed: (the Company) as of February 1, 2020, and February 2, 2019, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended February 1, 2020, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at February 1, 2020 and February 2, 2019, and the consolidated results of its operations and its cash flows for each of the three years in the period ended February 1, 2020, in conformity with U.S.
+Added: (the Company) as of January 30, 2021, and February 1, 2020, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended January 30, 2021, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 30, 2021 and February 1, 2020, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 30, 2021, in conformity with U.S.
generally accepted accounting principles.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of February 1, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 27, 2020 expressed an unqualified opinion thereon.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 30, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 26, 2021 expressed an unqualified opinion thereon.
Adoption of New Accounting Standards
1 unchanged sentence
2016-02, Leases (Topic 842) using the modified retrospective approach.
−Removed: See below for discussion of our related critical audit matter.
Basis for Opinion
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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Adoption of ASU 2016-02, Leases (Topic 842)
+Added: Impairment of Long-Lived Tangible and Right of Use Assets
Description of the matter
−Removed: As discussed above and in Notes 2 and 8 to the consolidated financial statements, on February 3, 2019, the Company adopted Accounting Standard Codification ASU 2016-02, Leases (Topic 842), using the modified retrospective approach by recognizing and measuring leases without revising comparative period information or disclosures.
−Removed: The adoption of Topic 842 resulted in the recognition of operating lease assets and liabilities of $1,460,866 thousands and $1,839,970 thousands, respectively, as of February 3, 2019.
−Removed: Auditing the Company’s adoption of Topic 842 was complex because of the estimation involved in calculating the incremental borrowing rate and its impact on the large volume of leases.
−Removed: The Company’s estimate of the incremental borrowing rate was challenging, as the Company does not have publicly traded debt.
−Removed: Therefore, to estimate their incremental borrowing rate, the Company engaged a third-party specialist to develop a synthetic credit rating based on certain profitability metrics, margins, asset turnover ratios, liquidity ratios and solvency ratios compared to other rated issuers in the retail industry.
−Removed: The determination of the incremental borrowing rate was judgmental and had a significant impact on the amounts recognized in the financial statements.
+Added: As described in Notes 2 and 6 to the consolidated financial statements, the Company evaluates if there are indicators of impairment for long-lived tangible and right of use assets in accordance with ASC 360, Property, Plant, and Equipment.
+Added: The Company’s first step is to determine whether indicators of impairment exist in its long-lived assets (property and equipment and leasehold improvements and operating lease right-of-use assets) at the individual retail store level, which is the lowest level at which cash flows can be identified.
+Added: If indicators of impairment are identified for any retail stores, the Company evaluates if the projected undiscounted cash flows derived from continued retail operations by those stores are less than their carrying amounts.
+Added: When this is the case, the Company compares the calculated fair value of the respective retail store to its carrying value.
+Added: If fair value is less than the carrying value, an impairment loss is recorded.
+Added: For the year ended January 30, 2021, the Company recorded impairment charges of $41,948 thousand and $19,569 thousand related to operating retail stores and closed stores, respectively, as the Company experienced lower than projected revenues for certain stores due to the COVID-19 pandemic.
+Added: Significant assumptions used in the Company’s projected undiscounted cash flow analyses included estimates of future revenue growth rates and operating expenses.
+Added: Additionally, significant assumptions utilized in the fair value analyses included the aforementioned assumptions, as well as market-based assumptions such as a discount rate and market rents .
+Added: This led to a high degree of auditor judgment and subjectivity in performing procedures and in assessing the assumptions utilized to project the undiscounted cash flows generated by retail stores with indicators of impairment, for purposes of determining if such cash flows were less than the carrying amount as well as in evaluating the assumptions utilized to estimate the fair value of those retail stores to calculate the impairment all of which can be affected by expectations about future market or economic conditions including outcomes resulting from the COVID-19 pandemic.
How we addressed the matter in our audit
−Removed: We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Topic 842 adoption process.
−Removed: This included testing controls over determining the completeness of the lease population as well as management's estimate of the incremental borrowing rate.
−Removed: To audit the Company’s adoption of Topic 842, we performed audit procedures that included, among others, performing an evaluation of the completeness of the population of contracts that meet the definition of a lease under Topic 842, testing the accuracy of lease terms within the lease IT system by agreeing the information to the underlying lease contract, and testing the accuracy of the Company’s system calculations of initial lease assets and lease liabilities.
−Removed: We also involved our valuation specialists to assist us in evaluating the methodologies used by management to calculate the incremental borrowing rate for each lease and related significant assumptions, such as credit quality and collateral adjustments, and to calculate a range of incremental borrowing rates based on independently observed data.
−Removed: We evaluated the reasonableness of the incremental borrowing rate for each lease used by the Company by comparing it to the range of rates we calculated.
−Removed: We performed a sensitivity analysis of significant assumptions to evaluate the change in the operating lease asset and liability.
−Removed: In addition, for a sample of leases, we evaluated whether the incremental borrowing rate used in the calculation of the lease liability was appropriately applied at the effective date based on the total lease term measured at lease inception under ASC 840, as elected by the Company under the transition provisions in Topic 842.
+Added: We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s processes over the identification of indicators of impairment, the assessment of the projected undiscounted cash flows to be generated by retail stores with indicators of impairment, the determination of the fair value of the retail stores and the measurement of any resulting impairment.
+Added: These controls include, among others, management’s evaluation of indicators of impairment, management’s review of the assumptions utilized to develop the projected undiscounted cash flows and the related fair value estimates, and management’s testing of the completeness and accuracy of the underlying data utilized to project future operating results for the retail stores.
+Added: Our testing of the Company’s impairment analyses included, among other procedures, testing the completeness of retail stores evaluated for impairments, management’s process for developing the undiscounted cash flows, evaluating the models used and evaluating significant assumptions discussed above used to project the undiscounted cash flows and the incremental assumptions discussed above used to estimate fair value.
+Added: For example, we compared the significant assumptions used by management to historical results and current industry and economic trends.
+Added: We performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the individual retail stores that would result from changes in the
+Added: underlying assumptions.
+Added: We involved our valuation specialists to assist in our evaluation of the fair value estimate specific to evaluating the discount rate and market rents.
Loyalty Program
5 unchanged sentences
The expected redemption percentage is based on historical redemption patterns in conjunction with current information and trends.
−Removed: The Company evaluates the estimated redemption rate based on observed customer behaviors and trends.
Auditing the Company’s estimate of loyalty deferred revenue was complex because the calculation involves subjective management assumptions for the standalone selling price and expected redemption rate.
6 unchanged sentences
To audit the redemption rate, we tested redemption activity and compared the results of that testing to the redemption rate used by management in its estimate.
−Removed: We also considered recent trends in redemption activity as well as loyalty customer behavior and spending by membership level and the impact on the redemption rate.
+Added: We also considered recent trends in redemption activity and the impact on the redemption rate.
In addition, we performed sensitivity analyses of significant assumptions to evaluate the change in the deferral amounts.
6 unchanged sentences
Opinion on Internal Control over Financial Reporting
−Removed: We have audited Ulta Beauty, Inc.’s internal control over financial reporting as of February 1, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
+Added: We have audited Ulta Beauty, Inc.’s internal control over financial reporting as of January 30, 2021, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
In our opinion, Ulta Beauty, Inc.
−Removed: (the Company) maintained, in all material respects, effective internal control over financial reporting as of February 1, 2020, based on COSO criteria.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of February 1, 2020 and February 2, 2019, the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended February 1, 2020, and the related notes and financial statement schedule listed in the Index at Item 15 and our report dated March 27, 2020 expressed an unqualified opinion thereon.
+Added: (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 30, 2021, based on COSO criteria.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 30, 2021 and February 1, 2020, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended January 30, 2021, and the related notes and financial statement schedule listed in the Index at Item 15 and our report dated March 26, 2021 expressed an unqualified opinion thereon.
Basis for Opinion
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Current operating lease liabilities
+Added: Accrued income taxes
Total current liabilities
Non-current operating lease liabilities
−Removed: Deferred rent
Deferred income taxes
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56,260 and 56,609 shares outstanding;
−Removed: at February 1, 2020 and February 2, 2019, respectively
+Added: at January 30, 2021 and February 1, 2020, respectively
Treasury stock-common, at cost
1 unchanged sentence
Retained earnings
+Added: Accumulated other comprehensive income
Total stockholders’ equity
2 unchanged sentences
Ulta Beauty, Inc.
−Removed: Consolidated Statements of Income
+Added: Consolidated Statements of Operations
Fiscal year ended
2 unchanged sentences
Selling, general and administrative expenses
+Added: Impairment, restructuring and other costs
Pre-opening expenses
Operating income
−Removed: Interest income, net
+Added: Interest expense (income), net
Income before income taxes
4 unchanged sentences
Ulta Beauty, Inc.
+Added: Consolidated Statements of Comprehensive Income
+Added: Fiscal year ended
+Added: (In thousands)
+Added: Other comprehensive income:
+Added: Foreign currency translation adjustments
+Added: Comprehensive income
+Added: See accompanying notes to consolidated financial statements.
+Added: Ulta Beauty, Inc.
Consolidated Statements of Cash Flows
5 unchanged sentences
Non-cash lease expense
+Added: Long-lived asset impairment charge
Deferred income taxes
19 unchanged sentences
Financing activities
+Added: Proceeds from long-term debt
+Added: Payments on long-term debt
Repurchase of common shares
3 unchanged sentences
Net cash used in financing activities
+Added: Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
2 unchanged sentences
Supplemental information
+Added: Cash paid for interest
Income taxes paid, net of refunds
3 unchanged sentences
Consolidated Statements of Stockholders’ Equity
+Added: Comprehensive
Stockholders'
(In thousands)
−Removed: Balance – January 28, 2017
+Added: Balance – February 3, 2018
Stock-based compensation
+Added: Adoption of accounting standards - ASC 606
Stock options exercised and other awards
9 unchanged sentences
Stock-based compensation
−Removed: Adoption of accounting standards - ASC 842
+Added: Foreign currency translation adjustments
Stock options exercised and other awards
1 unchanged sentence
Repurchase of common shares
−Removed: Balance – February 1, 2020
+Added: Balance – January 30, 2021
See accompanying notes to consolidated financial statements.
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implemented a holding company reorganization.
−Removed: Pursuant to the reorganization, Ulta Beauty, Inc., which was incorporated as a Delaware corporation in December 2016, became the successor to Ulta Salon, Cosmetics & Fragrance, Inc., the former publicly-traded company and now a wholly owned subsidiary of Ulta Beauty.
+Added: Pursuant to the reorganization, Ulta Beauty, Inc., which was incorporated as a Delaware corporation in December 2016, became the successor to Ulta Salon, Cosmetics & Fragrance, Inc., the former publicly-traded company and now a wholly owned subsidiary of Ulta Beauty, Inc.
As used in these notes and throughout this Annual Report on Form 10-K, all references to “we,” “us,” “our,” “Ulta Beauty,” or the “Company” refer to Ulta Beauty, Inc.
2 unchanged sentences
The stores also feature full-service salons.
−Removed: As of February 1, 2020, the Company operated 1,254 stores across 50 states.
+Added: As of January 30, 2021, the Company operated 1,264 stores across 50 states.
All amounts are stated in thousands, with the exception of per share amounts and number of stores.
2 unchanged sentences
The Company’s fiscal year is the 52 or 53 weeks ending on the Saturday closest to January 31.
−Removed: The Company’s fiscal years ended February 1, 2020 (fiscal 2019), February 2, 2019 (fiscal 2018), and February 3, 2018 (fiscal 2017) were 52 , 52 , and 53 -week years, respectively.
+Added: The Company’s fiscal years ended January 30, 2021 (fiscal 2020), February 1, 2020 (fiscal 2019), and February 2, 2019 (fiscal 2018) were 52 -week years.
Consolidation
5 unchanged sentences
Actual results could differ from those estimates.
+Added: The Company considers its accounting policies relating to inventory valuations, vendor allowances, impairment of long-lived tangible and operating lease assets, loyalty program and income taxes to be the most significant accounting policies that involve management estimates and judgments.
+Added: The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact the Company’s results of operations.
+Added: While the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated, the Company has made accounting estimates based on the facts and circumstances available as of the reporting date.
+Added: Actual amounts could differ from these estimates, and such differences could be material.
Reclassifications
9 unchanged sentences
Short-term investments
−Removed: The Company determines the balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date.
+Added: The balance sheet classification of investments is determined at the time of purchase and evaluated at each balance sheet date.
Money market funds, certificates of deposit, and time deposits with maturities of greater than three months but no more than twelve months are carried at cost, which approximates fair value and are recorded in the consolidated balance sheets in short-term investments (see Note 16, “Investments”).
−Removed: Currently, receivables consist principally of amounts due from vendors.
−Removed: In previous years, receivables also included tenant improvement allowances earned but not yet received.
−Removed: These receivables are computed based on provisions of the vendor and lease agreements in place and the Company’s completed performance.
+Added: Receivables consist principally of amounts due from vendors and amounts related to the employee retention credit (see Note 3, “Impact of the COVID-19 pandemic”).
The Company does not require collateral on its receivables and does not accrue interest.
−Removed: Credit risk with respect to receivables is limited due to the diversity of vendors and landlords comprising the Company’s vendor base.
+Added: Credit risk with respect to receivables is limited due to the diversity of vendors comprising the Company’s vendor base.
The Company performs ongoing credit evaluations of its vendors and evaluates the collectability of its receivables based on the length of time the receivable is past due and historical experience.
−Removed: The receivable for vendor allowances was $ 113,048 and $ 97,885 as of February 1, 2020 and February 2, 2019, respectively.
−Removed: The receivable for landlord allowances was $ 19,746 as of February 2, 2019.
−Removed: Prior to fiscal 2019, all tenant improvement allowances were included in the receivable for landlord allowances.
−Removed: Subsequent to the adoption of Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), a portion of landlord allowances is recorded in the right-of-use asset.
−Removed: The allowance for doubtful receivables was $ 1,363 and $ 651 as of February 1, 2020 and February 2, 2019, respectively.
+Added: The receivable for vendor allowances was $ 90,271 and $ 113,048 as of January 30, 2021 and February 1, 2020, respectively.
+Added: The allowance for doubtful receivables was $ 768 and $ 1,363 as of January 30, 2021 and February 1, 2020, respectively.
+Added: The receivable for the employee retention credit was $ 52,405 as of January 30, 2021.
+Added: There was no receivable for the employee retention credit as of February 1, 2020.
Merchandise inventories
−Removed: Merchandise inventories are stated at the lower of cost or market (net realizable value).
+Added: Merchandise inventories are stated at the lower of cost or net realizable value.
Cost is determined using the moving average cost method and includes costs incurred to purchase and distribute goods.
Inventory cost also includes vendor allowances related to co-op advertising, markdowns, and volume discounts.
−Removed: The Company maintains an inventory reserve for lower of cost or market (net realizable value) and shrink.
−Removed: The inventory reserve was $ 46,941 and $ 36,640 as of February 1, 2020 and February 2, 2019, respectively.
+Added: The Company maintains an inventory reserve for lower of cost or net realizable value and shrink.
+Added: The inventory reserve was $ 52,860 and $ 46,941 as of January 30, 2021 and February 1, 2020, respectively.
Fair value of financial instruments
The carrying value of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable approximates their estimated fair values due to the short maturities of these instruments.
−Removed: The Company had no outstanding debt as of February 1, 2020 and February 2, 2019.
+Added: There was no outstanding debt as of January 30, 2021 and February 1, 2020.
Property and equipment
−Removed: The Company’s property and equipment are stated at cost, net of accumulated depreciation and amortization.
−Removed: Maintenance and repairs are charged to operating expense as incurred.
−Removed: The Company’s assets are depreciated or amortized using the straight-line method over the shorter of their estimated useful lives or the expected lease term as follows:
+Added: Property and equipment is stated at cost, net of accumulated depreciation, and depreciated using the straight-line method over the shorter of the assets’ estimated useful lives or lease term.
+Added: Leasehold improvements purchased after the beginning of the initial lease term are amortized over the shorter of the assets’ useful lives or a term that includes the original lease term, plus any renewals that are reasonably certain at the date the leasehold improvements are acquired.
+Added: Repair and maintenance costs are expensed as incurred.
Equipment and fixtures
1 to 10 years
−Removed: Leasehold improvements
Electronic equipment and software
−Removed: The Company capitalizes costs incurred during the application development stage in developing or purchasing internal use software.
−Removed: These costs are amortized over the estimated useful life of the software.
−Removed: The Company periodically evaluates whether changes have occurred that would require revision of the remaining useful life of equipment and leasehold improvements or render them not recoverable.
−Removed: If such circumstances arise, the Company estimates the undiscounted future operating cash flows based on the remaining useful life of the asset to determine whether the long-lived assets are impaired.
−Removed: If the undiscounted cash flows are less than the carrying amount of the assets, the resulting impairment charges to be recorded are calculated based on the excess of the carrying value of the assets over the fair value of such assets.
−Removed: No significant impairment charges were recognized in fiscal 2019, fiscal 2018, or fiscal 2017.
−Removed: Impairment charges are included in selling, general and administrative (SG&A) expenses in the consolidated statements of income.
+Added: Costs incurred to obtain or develop internal use software are capitalized.
+Added: These costs are amortized on a straight-line basis over the estimated useful life of the software.
+Added: Impairment of long-lived tangible and right-of-use assets
+Added: The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets.
+Added: The asset group identified is at the store level and includes both property and equipment and operating lease assets.
+Added: Significant estimates are used in determining future cash flows of each store over its remaining lease term including our expectations of future projected cash flows including revenues and operating expenses.
+Added: An impairment loss is recorded if the carrying amount of the long-lived asset exceeds its fair value.
+Added: The Company evaluates long-lived tangible and right-of-use assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable.
+Added: The Company performs an undiscounted cash flow analysis over the asset group.
+Added: Asset groups are written down only to the extent that their carrying value exceeds their respective fair value.
+Added: Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant.
+Added: Management’s forecast of future cash flows is based on the income approach.
+Added: The fair value of individual operating lease assets is determined under the market approach using estimated market rent assessments based on broker quotes.
+Added: The determination of fair value under the income approach requires assumptions including forecasts of future cash flows (such as revenue growth rates and operating expenses) and selection of a market-based discount rate.
+Added: Estimates of market rent are based on non-binding broker quotes.
+Added: As these inputs are unobservable they are classified as Level 3 inputs under the fair value hierarchy (see Note 15, “Fair value measurements”).
+Added: If actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to additional impairment losses in a future period (see Note 6, “Impairment, restructuring and other costs”).
Goodwill represents the excess of cost over the fair value of net assets acquired.
2 unchanged sentences
Other definite-lived intangible assets are amortized over their useful lives.
−Removed: The Company reviews the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable (see Note 7, “Other intangible assets”).
+Added: The Company reviews the recoverability of intangible assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable (see Note 9, “Other intangible assets”).
+Added: The Company adopted ASU 2016-02, Leases (Topic 842) on February 3, 2019 using the modified retrospective approach.
+Added: Results and disclosure requirements for reporting periods beginning February 3, 2019 and later are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported under Topic 840.
The Company determines whether an arrangement is or contains a lease at contract inception.
6 unchanged sentences
The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset.
−Removed: Prior to fiscal 2019, this difference was recorded as deferred rent on the consolidated balance sheets.
−Removed: Operating lease expense is recognized on a straight-line basis over the lease term.
−Removed: Certain leases contain provisions that require variable payments based upon sales volume or payment of common area maintenance costs (variable lease cost) .
+Added: Certain leases contain provisions that require variable payments based upon sales volume or payment of common area maintenance costs, real estate taxes, and insurance related to leases (variable lease cost) .
Variable lease costs are expensed as incurred.
8 unchanged sentences
As there are no outstanding borrowings under the Company’s credit facility, this rate is estimated based on prevailing market conditions, comparable company and credit analysis, and judgment.
−Removed: The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract.
+Added: The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract (see Note 10, “Leases”).
Loyalty program
6 unchanged sentences
The expected redemption percentage is based on historical redemption patterns and considers current information or trends.
−Removed: When a guest redeems points or the points expire, the Company recognizes revenue in net sales on the consolidated statements of income.
−Removed: Prior to fiscal 2018, loyalty program revenue was recorded using the incremental cost method within cost of sales on the consolidated statements of income.
+Added: When a guest redeems points or the points expire, the Company recognizes revenue in net sales on the consolidated statements of operations.
The Company has agreements (the Agreements) with third parties to provide guests with private label credit cards and/or co-branded credit cards (collectively, the Credit Cards).
6 unchanged sentences
The Company accounts for the amounts associated with the Agreements as a single contract with the sole commercial objective to maintain the Credit Card programs.
−Removed: As a result, all amounts associated with the Agreements are recognized within net sales on the consolidated statements of income.
+Added: As a result, all amounts associated with the Agreements are recognized within net sales on the consolidated statements of operations.
Gift card program
The Company records a contract liability for gift card sales which will be redeemed in the future within deferred revenue on the consolidated balance sheets and recognized in net sales when the gift card is redeemed for product or services.
−Removed: The Company’s gift cards do not expire and do not include service fees that decrease guest balances.
+Added: Gift cards do not expire and do not include service fees that decrease guest balances.
The Company has maintained historical data related to gift card transactions sold and redeemed over a significant time frame.
−Removed: The Company recognizes gift card breakage (amounts not expected to be redeemed) to the extent there is no requirement for remitting balances to governmental agencies under unclaimed property laws.
+Added: Gift card breakage (amounts not expected to be redeemed) is recognized to the extent there is no requirement for remitting balances to governmental agencies under unclaimed property laws.
Estimated gift card breakage revenue is recognized over time in proportion to actual gift card redemptions.
8 unchanged sentences
● Recognition of revenue when, or as, a performance obligation is satisfied.
−Removed: The Company’s net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue.
+Added: Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue.
Revenue from merchandise sales at retail stores is recognized at the point of sale, net of estimated returns.
−Removed: Revenue from e-commerce merchandise sales is recognized upon shipment of the merchandise to the guest based on meeting the transfer of control criteria, net of estimated returns.
+Added: Revenue from e-commerce merchandise sales is recognized upon shipment to the guest or guest pickup of the merchandise based on meeting the transfer of control criteria, net of estimated returns.
Salon services revenue is recognized at the time the service is provided to the guest.
Shipping and handling are treated as costs to fulfill the contract and not a separate performance obligation.
−Removed: Accordingly, the Company recognizes revenue for its single performance obligation related to online sales at the time control of the merchandise passes to the customer, which is at the time of shipment.
+Added: Accordingly, the Company recognizes revenue for its single performance obligation related to e-commerce sales at the time control of the merchandise passes to the customer, which is at the time of shipment or guest pickup.
The Company provides refunds for merchandise returns within 60 days from the original purchase date;
−Removed: State sales taxes are presented on a net basis as the Company considers itself a pass-through conduit for collecting and remitting state sales tax.
+Added: however, due to store closures during the first half of fiscal 2020, we extended our return policy to 180 days through November 16, 2020.
+Added: State sales taxes are presented on a net basis as the Company considers itself a pass-through conduit
+Added: for collecting and remitting state sales tax.
Company coupons and other incentives are recorded as a reduction of net sales.
2 unchanged sentences
Substantially all vendor allowances are recorded as a reduction of the vendor’s product cost and are recognized in cost of sales as the product is sold.
−Removed: Advertising expense consists principally of print, digital and social media, and television and radio advertising.
−Removed: The Company expenses the costs related to its advertising in the period the related promotional event occurs.
−Removed: Prepaid advertising costs included in prepaid expenses and other current assets on the consolidated balance sheets were $ 9,605
−Removed: and $ 9,384 as of February 1, 2020 and February 2, 2019, respectively.
−Removed: Total advertising costs, exclusive of incentives from vendors and start-up advertising expense, are presented in the following table:
+Added: Advertising costs consist principally of print, digital and social media, and television and radio advertising.
+Added: Costs related to advertising are expensed in the period the related promotional event occurs.
+Added: Prepaid advertising costs included in prepaid expenses and other current assets on the consolidated balance sheets were $ 7,112 and $ 9,605 as of January 30, 2021 and February 1, 2020, respectively.
+Added: Advertising expense, exclusive of incentives from vendors and start-up advertising expense, is presented in the following table:
+Added: Fiscal year ended
(In thousands)
−Removed: Advertising costs
−Removed: Advertising expense as a percentage of sales
+Added: Advertising expense
+Added: Advertising expense as a percentage of net sales
Pre-opening expenses
4 unchanged sentences
shipping and handling costs;
−Removed: retail stores occupancy costs including rent, depreciation and amortization, real estate taxes, utilities, repairs and maintenance, insurance, licenses, and cleaning expenses;
+Added: retail stores occupancy costs including rent, depreciation and amortization, real estate taxes, utilities, repairs and maintenance, insurance, and licenses;
salon services payroll and benefits;
1 unchanged sentence
Selling, general and administrative expenses
−Removed: SG&A expenses includes payroll, bonus, and benefit costs for retail and corporate employees;
+Added: Selling, general and administrative (SG&A) expenses includes payroll, bonus, and benefit costs for retail and corporate employees;
advertising and marketing costs;
6 unchanged sentences
Income tax benefits related to uncertain tax positions are recognized only when it is more likely than not that the tax position will be sustained on examination by the taxing authorities.
−Removed: The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information.
−Removed: Penalties and interest related to unrecognized tax positions are recorded in income tax expense in the consolidated statements of income.
−Removed: Share-based compensation
−Removed: Share-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period for awards expected to vest.
−Removed: The Company recorded stock compensation expense of $ 25,642 , $ 27,489 , and $ 24,399 in fiscal 2019, 2018 and 2017, respectively (see Note 15, “Share-based awards”).
+Added: The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full
+Added: knowledge of all relevant information.
+Added: Penalties and interest related to unrecognized tax positions are recorded in income tax expense in the consolidated statements of operations (see Note 13, “Income taxes”).
+Added: Stock-based compensation
+Added: Stock-based compensation expense is measured at grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period for awards expected to vest.
+Added: Stock-based compensation expense was $ 27,583 , $ 25,642 , and $ 27,489 in fiscal 2020, 2019 and 2018, respectively (see Note 17, “Stock-based compensation”).
Insurance expense
2 unchanged sentences
Current stop loss coverage per claim is $ 350 for employee health claims, $ 100 for general liability claims, and $ 250 for workers compensation claims.
−Removed: The Company makes collateral and premium payments during the plan year and accrues expenses in the event additional premium is due from the Company
−Removed: based on actual claim results.
+Added: The Company makes collateral and premium payments during the plan year and accrues expenses in the event additional premium is due from the Company based on actual claim results.
In fiscal 2018, the Company created UB Insurance, Inc., an Arizona-based wholly owned captive insurance subsidiary of the Company, which charges the operating subsidiaries of the Company premiums to insure certain liability exposures.
5 unchanged sentences
Recent accounting pronouncements not yet adopted
+Added: Taxes – Income Taxes (Topic 740):
+Added: Simplifying the Accounting for Income Taxes.
+Added: In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes.
+Added: The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intraperiod allocation, and calculating income taxes in interim periods.
+Added: The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group, among others.
+Added: This guidance is effective for interim and annual reporting periods beginning after December 15, 2020.
+Added: Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued.
+Added: The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively.
+Added: The adoption of ASU 2019-12 is not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
+Added: Recently adopted accounting pronouncements
Intangibles – Goodwill and Other-Internal-Use Software.
−Removed: In August 2018 , the Financial Accounting Standards Board (FASB) issued ASU 2018-15, Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40):
+Added: In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40):
Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which clarifies and aligns the accounting for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.
1 unchanged sentence
Early adoption is permitted.
−Removed: The adoption of ASU 2018-15 is not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
−Removed: Recently adopted accounting pronouncements
−Removed: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).
−Removed: The guidance in ASU 2016-02 and subsequently issued amendments requires lessees to capitalize virtually all leases with terms of more than twelve months on the balance sheet as a right-of-use asset and recognize an associated lease liability.
−Removed: The right-of-use asset represents the lessee’s right to use, or control the use of, a specified asset for the specified lease term.
−Removed: The lease liability represents the lessee’s obligation to make lease payments arising from the lease, measured on a discounted basis.
−Removed: Based on certain characteristics, leases are classified as financing or operating leases and their classification impacts the recognition of expense in the income statement.
−Removed: Entities are allowed to apply the modified retrospective approach (1) retrospectively to each comparative period presented or (2) retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment.
−Removed: The Company adopted the new standard on February 3, 2019 using the modified retrospective approach by recognizing and measuring leases without revising comparative period information or disclosures.
−Removed: The Company elected the transition package of three practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classifications.
−Removed: In addition, the Company elected to apply the practical expedient that allows for the combination of lease and non-lease components for all asset classes.
−Removed: The Company made an accounting policy election to keep leases with terms of twelve months or less off the balance sheet and recognize those lease payments on a straight-line basis over the lease term.
−Removed: The adoption of ASU 2016-02 resulted in the recording of operating lease assets and liabilities of $ 1,460,866 and $ 1,839,970 within the consolidated balance sheet, respectively, as of February 3, 2019.
−Removed: As part of the adoption, the Company recorded an adjustment to retained earnings of $ 2,375 .
−Removed: The standard did not materially impact the Company’s consolidated results of operations and had no impact on cash flows.
−Removed: See Note 8, “Leases,” for further details.
−Removed: The impact to the Company’s opening consolidated balance sheet as of February 3, 2019 was as follows:
−Removed: Effect of Adopting
−Removed: (In thousands)
−Removed: February 2, 2019
−Removed: February 3, 2019
−Removed: Receivables, net
−Removed: Prepaid expenses and other current assets
−Removed: Property and equipment, net
−Removed: Operating lease assets
−Removed: Liabilities and stockholders’ equity
−Removed: Accrued liabilities
−Removed: Current operating lease liabilities
−Removed: Deferred rent
−Removed: Non-current operating lease liabilities
−Removed: Retained earnings
−Removed: The Company continues to make investments to evolve the customer experience, with a strong emphasis on integrating technology across the business.
+Added: The Company adopted the new guidance prospectively as of
+Added: February 2, 2020, and its adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
+Added: Impact of the COVID-19 pandemic
+Added: In March 2020, the World Health Organization declared COVID-19 a global pandemic.
+Added: In response to federal, state, and local government restrictions and recommendations and for the health and safety of our associates and guests, the Company temporarily closed all stores effective March 19, 2020.
+Added: Effective April 19, 2020, the Company temporarily furloughed many store and salon associates and introduced curbside pickup, and on May 11, 2020, the Company started a phased store reopening process.
+Added: By July 20, 2020, the full fleet of Ulta Beauty stores was operational, and by January 30, 2021, salon and brow services had resumed in almost all stores.
+Added: Results of operations for the fiscal year ended January 30, 2021 were significantly impacted by the effects of the COVID-19 pandemic, and the pandemic is expected to continue to have a negative impact on the Company’s business, financial condition, profitability, cash flows, and supply chain, although the full extent is uncertain.
+Added: As the COVID-19 pandemic continues to evolve and resurgences occur, the extent of the impact on the Company’s business, financial condition, profitability, cash flows, and supply chain will depend on future developments, including, but not limited to, the potential temporary reclosing of certain stores, the potential temporary restrictions on certain store operating hours and/or in-store capacity, the duration of potential future quarantines, shelter-in-place and other travel restrictions within the U.S.
+Added: and other affected countries, the duration of the pandemic and any more dangerous variants of the virus, the duration, timing and severity of the impact on consumer spending, the timing and effectiveness of vaccine distribution, and how quickly and to what extent normal economic and operating conditions can resume, all of which are highly uncertain and cannot be predicted.
+Added: The multi-year, strategic investments the Company made to enhance omnichannel and supply chain capabilities, combined with the ongoing commitment of the Company’s distribution associates, enabled the Company to support increased e-commerce demand and guest engagement.
+Added: The Company took the following actions during fiscal 2020 to preserve financial liquidity through these unprecedented circumstances:
+Added: ● the drawdown of $ 800,000 on March 18, 2020 under the Company’s revolving credit facility, which was repaid in full on September 2, 2020;
+Added: ● limited new hires and delayed merit increases for all corporate, store, and salon associates;
+Added: ● reduced marketing, travel and controllable expenses;
+Added: ● aligned inventory receipts with current sales trends;
+Added: ● prioritized payment obligations;
+Added: ● reduced new store openings, relocations and remodel projects;
+Added: ● suspended the stock repurchase program, which resumed in the fourth quarter of fiscal 2020.
+Added: The Company evaluates long-lived tangible and right-of-use assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable.
+Added: As a result of the COVID-19 pandemic, the Company experienced lower than projected revenues and identified indicators of impairment for certain stores, which resulted in the recording of certain long-lived asset impairment and restructuring charges.
+Added: See Note 6, “Impairment, restructuring and other costs,” for additional details.
+Added: On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted.
+Added: The CARES Act, among other things, includes provisions relating to refundable payroll taxes, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.
+Added: The most significant relief measures which the Company qualifies for are the employee retention credit, payroll tax deferral, and technical corrections to tax depreciation.
+Added: The Company recognizes government grants for which there is a reasonable assurance of compliance with grant conditions and receipt of credits.
+Added: The Company believes there is a reasonable assurance that it will comply with the relevant conditions of the employee retention credit provision of the CARES Act and that it will receive the credit.
+Added: The Company will continue to assess the treatment of the CARES Act to the extent additional guidance and regulations are issued, the further applicability of the CARES Act to the Company, and the potential impacts on the business.
+Added: Employee retention credit (ERC) and payroll tax deferral.
+Added: The ERC allows for a refundable tax credit against certain employment taxes equal to 50% of the first ten thousand dollars in qualified wages paid to each employee commencing on March 13, 2020 and through January 1, 2021.
+Added: To be eligible, the Company must (i) have had operations fully or partially suspended because of a shut-down order from a governmental authority related to the COVID-19 pandemic, or (ii) have had gross receipts decline by more than 50% in a calendar quarter, when compared to the same quarter in 2019.
+Added: Qualified wages are limited to wages paid to employees who were not providing services due to the COVID-19 pandemic.
+Added: During the fiscal year ended January 30, 2021, the Company recognized $52,405 related to the ERC as a reduction of the associated costs within selling, general and administrative expenses on the consolidated statements of operations and within accounts receivable, net on the consolidated balance sheets.
+Added: Additionally, the CARES Act contains provisions for the deferral of the employer portion of social security taxes incurred through the end of calendar 2020.
+Added: As of January 30, 2021, the Company had deferred $ 43,845 in social security tax payments, of which 50% are required to be remitted by December 2021 and the remaining 50% by December 2022.
+Added: The deferred amounts are recorded within accrued liabilities on the Company’s consolidated balance sheets.
+Added: Technical corrections to tax depreciation.
+Added: The CARES Act also includes a technical correction of tax depreciation methods for qualified improvement property, which changes 39-year property to 15-year property eligible for 100% tax bonus depreciation.
+Added: This provision of the CARES Act resulted in a cash tax refund of $ 4,600 relating to property and equipment, from filing an amendment to the Company’s 2018 federal income tax return, during fiscal 2020.
+Added: The Company has made investments to evolve the customer experience, with a strong emphasis on integrating technology across the business.
To support these efforts, the Company paid $ 13,606 to acquire two technology companies in fiscal 2018.
3 unchanged sentences
The acquisition is not material to the Company’s consolidated financial statements.
−Removed: The Company’s net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue.
+Added: Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue.
Other revenue sources include the private label and co-branded credit card programs, as well as deferred revenue related to the loyalty program and gift card breakage.
7 unchanged sentences
Deferred revenue primarily represents contract liabilities for the Company’s obligation to transfer additional goods or services to a guest for which the Company has received consideration, such as unredeemed Ultamate Rewards loyalty points and unredeemed Ulta Beauty gift cards.
−Removed: In addition, the Company recognizes breakage on gift cards proportionately as redemption occurs.
+Added: In addition, breakage on gift cards is recognized proportionately as redemption occurs.
The following table provides a summary of the changes included in deferred revenue during fiscal years 2020 and 2019:
−Removed: Fiscal year ended
+Added: (In thousands)
Beginning balance
−Removed: Adoption of ASC 606
Additions to contract liabilities (1)
3 unchanged sentences
(2) Revenue recognized in the current period related to the beginning liability.
+Added: Other amounts included in deferred revenue were $ 5,351 and $ 7,524 at January 30, 2021 and February 1, 2020, respectively.
+Added: Impairment, restructuring and other costs
+Added: The following table provides a summary of the impairment, restructuring and other costs included in the consolidated statements of operations:
+Added: Fiscal year ended
+Added: (In thousands)
+Added: Impairment of long-lived tangible and right-of-use assets (1)
+Added: Store closures
+Added: Impairment of long-lived tangible and right-of-use assets (1)
+Added: Lease termination costs
+Added: Severance (2)
+Added: Total store closures
+Added: Suspension of Canadian expansion
+Added: Impairment of long-lived tangible and right-of-use assets (1)
+Added: Lease termination costs
+Added: Severance (2)
+Added: Total suspension of Canadian expansion
+Added: Other severance (2)
+Added: (1) Amount included in the non-cash $ 72,533 long-lived asset impairment charge on the consolidated statements of cash flows for the fiscal year ended January 30, 2021.
+Added: (2) As of January 30, 2021, there was $ 9,476 in accrued liabilities on the consolidated balance sheets primarily for severance.
+Added: (3) There were no impairment, restructuring and other costs recognized during the fiscal years ended February 1, 2020 and February 2, 2019.
+Added: Impairment of long-lived tangible and right-of-use assets.
+Added: As a result of the COVID-19 pandemic, the Company experienced lower than projected revenues and identified indicators of impairment for certain retail stores.
+Added: The Company’s analysis indicated that the carrying values of certain long-lived tangible and right-of-use assets exceeded their respective fair values.
+Added: As a result, the Company recognized impairment charges related to certain retail stores for the fiscal year ended January 30, 2021.
+Added: These impairment charges were primarily driven by lower than projected revenues, lower market rate assessments, and the effect of temporary store closures as a result of the COVID-19 pandemic.
+Added: The Company also recorded long-lived tangible and right-of-use asset impairment charges related to store closures and suspension of the Canadian expansion during the fiscal year ended January 30, 2021 as described below.
+Added: Store closures.
+Added: During the second quarter of fiscal 2020, the Company announced that after evaluating its store portfolio, it would permanently close 19 stores in the third quarter of fiscal 2020.
+Added: Accordingly, for the fiscal year ended January 30, 2021, the Company recognized impairment, restructuring and other costs related to store closures.
+Added: The impairment charges reduced the carrying value of the long-lived tangible and right-of-use assets to their fair value.
+Added: Suspension of Canadian expansion.
+Added: In fiscal 2019, the Company announced plans to expand internationally with an initial launch into Canada.
+Added: The Company continues to believe international markets provide a long-term growth opportunity.
+Added: However, given the current operating environment, in September 2020 the Company decided to prioritize growth of its U.S.
+Added: operations at this time and suspended its planned expansion to Canada.
+Added: Investments to support the expansion into Canada were limited to early-stage infrastructure buildout and lease obligations for a small number of
+Added: The Company recognized impairment, restructuring and other costs related to suspension of the Canada expansion during the fiscal year ended January 30, 2021.
+Added: Other severance.
+Added: As part of the efforts to optimize its cost structure, the Company eliminated certain field and corporate roles.
+Added: As a result, severance expense was recognized during the fiscal year ended January 30, 2021.
Property and equipment
15 unchanged sentences
Other intangible assets subject to amortization consists of the following:
−Removed: February 1, 2020
+Added: January 30, 2021
February 1, 2020
5 unchanged sentences
Amortization expense related to intangible assets was $ 926 , $ 926 , and $ 314 in fiscal 2020, fiscal 2019, and fiscal 2018, respectively.
−Removed: Estimated amortization expense related to intangible assets at February 1, 2020, for the next five years and thereafter is as follows:
+Added: Estimated amortization expense related to intangible assets at January 30, 2021, for the next five years and thereafter is as follows:
(In thousands)
2026 and thereafter
−Removed: The Company leases retail stores, distribution and fast fulfillment centers, corporate offices, and certain equipment under non-cancelable operating leases with various expiration dates through 2032.
−Removed: Leases generally have initial lease terms of 10 years and include renewal options under substantially the same terms and conditions as the original leases.
+Added: The Company leases retail stores, distribution centers, fast fulfillment centers, corporate offices, and certain equipment under non-cancelable operating leases with various expiration dates through 2033.
+Added: Leases generally have initial lease terms of 10 years and when determined applicable, include renewal options under substantially the same terms and conditions as the original leases.
Leases do not contain any material residual value guarantees or material restrictive covenants.
−Removed: All retail store, distribution and fast fulfillment center, and corporate office leases are classified as operating leases.
+Added: All retail store, distribution center, fast fulfillment center, and corporate office leases are classified as operating leases.
The Company does not have any finance leases.
−Removed: The following table presents supplemental balance sheet information, the weighted-average remaining lease term, and discount rate for operating leases as of February 1, 2020:
+Added: The following table presents supplemental balance sheet information, the weighted-average remaining lease term, and discount rate for operating leases:
(In thousands)
Classification on the Balance Sheet
−Removed: February 1, 2020
Right-of-use assets
10 unchanged sentences
(In thousands)
−Removed: Classification on the Statement of Income
−Removed: February 1, 2020
+Added: Classification on the Statement of Operations
Operating lease cost
6 unchanged sentences
Total lease cost
−Removed: (1) The majority of operating lease cost relates to retail stores and distribution and fast fulfillment centers and is classified within cost of sales.
+Added: (1) The majority of operating lease cost relates to retail stores, distribution centers, and fast fulfillment centers and is classified within cost of sales.
Operating lease cost for corporate offices is classified within the selling, general and administrative expenses.
4 unchanged sentences
(In thousands)
−Removed: February 1, 2020
Cash paid for operating lease liabilities (1)
Operating lease assets obtained in exchange for operating lease liabilities (non-cash)
−Removed: (1) Excludes $ 71,294 related to cash received for tenant incentives.
+Added: (1) Excludes $ 33,092 and $ 71,294 related to cash received for tenant incentives as of January 30, 2021 and February 1, 2020, respectively.
Maturity of lease liabilities
−Removed: The following table presents maturities of operating lease liabilities as of February 1, 2020:
+Added: The following table presents maturities of operating lease liabilities as of January 30, 2021:
(In thousands)
5 unchanged sentences
Commitments and contingencies
−Removed: Contractual obligations – As of February 1, 2020, the Company had obligations of $ 1,940 related to commitments made to a third party for products and services for a new fast fulfillment center opening in fiscal 2021.
−Removed: Payments under this commitment were $ 9,212 in fiscal 2019.
−Removed: In addition, the Company has entered into various non-cancelable advertising and other goods and service contracts.
−Removed: A majority of these agreements expire over one year and the obligations under these agreements were $ 33,066 as of February 1, 2020.
+Added: Contractual obligations – As of January 30, 2021, the Company had various non-cancelable obligations of $ 1,020 related to commitments made for goods and service contracts.
+Added: All of these agreements expire over one year .
General litigation – The Company is involved in various legal proceedings that are incidental to the conduct of the business including both class action and single plaintiff litigation.
8 unchanged sentences
The provision for income taxes consists of the following:
+Added: Fiscal year ended
(In thousands)
3 unchanged sentences
A reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows:
+Added: Fiscal year ended
Federal statutory rate
State effective rate, net of federal tax benefit
−Removed: Re-measurement of deferred tax liabilities
+Added: Executive compensation limitation
Excess deduction of stock compensation
Effective tax rate
−Removed: At February 3, 2018, the Company recorded a provisional tax expense related to the impacts of the Tax Cuts and Jobs Act (Tax Reform).
−Removed: The SEC issued guidance on December 22, 2017 under Staff Accounting Bulletin No.
−Removed: 118 (“SAB 118”) which allowed recording a provisional tax expense using a measurement period, not to exceed more than one year from the enactment date.
−Removed: The Company’s accounting for the impacts of the Tax Reform is complete and the Company has not recorded any material adjustments to the provisional amounts under SAB 118.
−Removed: Significant components of the Company’s deferred tax assets and liabilities are as follows:
+Added: Significant components of deferred tax assets and liabilities are as follows:
(In thousands)
13 unchanged sentences
Receivables not currently includable
−Removed: Deferred rent obligation
Total deferred tax liabilities
Net deferred tax liability
−Removed: At February 1, 2020, the Company had $ 224 of credit carryforwards for state income tax purposes that expire between 2024 and 2029.
+Added: At January 30, 2021, the Company had $ 291 of credit carryforwards for state income tax purposes that expire between 2022 and 2024.
The Company also had $ 533 of state net operating loss (NOL) carryforwards that expire by 2039 and $ 985 of federal and $ 36 of state NOL carryforwards that do not expire.
The Company accounts for uncertainty in income taxes in accordance with the ASC 740-10 rules for income taxes.
−Removed: The reserve for uncertain tax positions was $ 3,536 and $ 3,844 at February 1, 2020 and February 2, 2019, respectively.
+Added: The reserve for uncertain tax positions was $ 2,783 and $ 3,536 at January 30, 2021 and February 1, 2020, respectively.
The balance is the Company’s best estimate of the potential liability for uncertain tax positions.
−Removed: A reconciliation of the Company’s unrecognized tax benefits, excluding interest and penalties, is as follows:
+Added: A reconciliation of unrecognized tax benefits, excluding interest and penalties, is as follows:
(In thousands)
10 unchanged sentences
federal examinations by the Internal Revenue Service for years before 2018 and is no longer subject to examinations by state authorities before 2016.
−Removed: Notes payable
−Removed: On August 23, 2017, the Company entered into a Second Amended and Restated Loan Agreement (the Loan Agreement) with Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent and a Lender thereunder;
+Added: On March 11, 2020, the Company entered into Amendment No.
+Added: 1 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;
−Removed: PNC Bank, National Association, as Documentation Agent and a
+Added: PNC Bank, National
+Added: Association, as Documentation Agent and a Lender;
and the other lenders party thereto.
−Removed: The Loan Agreement matures on August 23, 2022, provides maximum revolving loans equal to the lesser of $ 400,000 or a percentage of eligible owned inventory (which borrowing base may, at the election of the Company and satisfaction of certain conditions, include a percentage of eligible owned receivables and qualified cash), contains a $ 20,000 subfacility for letters of credit and allows the Company to increase the revolving facility by an additional $ 50,000 , subject to the consent by each lender and other conditions.
+Added: The Loan Agreement matures on March 11, 2025, provides maximum revolving loans equal to the lesser of $ 1,000,000 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), contains a $ 50,000 subfacility for letters of credit and allows the Company to increase the revolving facility by an additional $ 100,000 , subject to the consent by each lender and other conditions.
The Loan Agreement contains a requirement to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 during such periods when 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.
−Removed: Outstanding borrowings will bear interest at either a base rate or the London Interbank Offered Rate plus 1.25 %, and the unused line fee is 0.20 % per annum.
−Removed: As of February 1, 2020 and February 2, 2019, the Company had no borrowings outstanding under the credit facility and the Company was in compliance with all terms and covenants of the Loan Agreement.
+Added: Outstanding borrowings bear interest, at the Company’s election, at either a base rate plus a margin of 0 % to 0.125 % or the London Interbank Offered Rate plus a margin of 1.125 % to 1.250 %, with such margins based on the Company’s borrowing availability, and the unused line fee is 0.20 % per annum.
+Added: As of January 30, 2021 and February 1, 2020, the Company had no borrowings outstanding under the credit facility and the weighted average interest rate was 1.56 % for fiscal year 2020.
+Added: As of January 30, 2021, the Company was in compliance with all terms and covenants of the Loan Agreement.
Fair value measurements
4 unchanged sentences
● Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.
−Removed: As of February 1, 2020 and February 2, 2019, the Company held financial liabilities included in other long-term liabilities on the consolidated balance sheets of $ 29,442 and $ 19,615 , respectively, related to its non-qualified deferred compensation plan.
+Added: As of January 30, 2021 and February 1, 2020, the Company held financial liabilities included in other long-term liabilities on the consolidated balance sheets of $ 32,909 and $ 29,442 , respectively, related to its non-qualified deferred compensation plan.
The liabilities have been categorized as Level 2 as they are based on third-party reported values which are based primarily on quoted market prices of underlying assets of the funds within the plan.
+Added: Some assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances.
+Added: These assets can include long-lived assets and goodwill that are reduced to fair value when impaired.
+Added: Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.
Short-term investments typically consist of certificates of deposit and are carried at cost, which approximates fair value and are recorded in the consolidated balance sheets in short-term investments.
−Removed: The Company’s short-term investments as of February 1, 2020 and February 2, 2019 were $ 110,000 and $ 0 , respectively.
−Removed: The Company’s investments in renewable energy projects are accounted for under the equity method of accounting.
−Removed: The balance of these investments was $ 3,936 and $ 2,101 as of February 1, 2020 and February 2, 2019, and is included in other long-term assets on the consolidated balance sheets.
+Added: There were no short-term investments as of January 30, 2021.
+Added: Short-term investments were $ 110,000 as of February 1, 2020.
+Added: Investments in renewable energy projects are accounted for under the equity method of accounting.
+Added: The balance of these investments was $ 3,174 and $ 3,936 as of January 30, 2021 and February 1, 2020, respectively, and is included in other long-term assets on the consolidated balance sheets.
The Company contributed capital of $ 5,665 and received distributions including $ 1,689 of investment tax credits during fiscal year 2020.
−Removed: Share-based awards
−Removed: Equity incentive plans
−Removed: The Company has had a number of equity incentive plans over the years.
−Removed: The plans were adopted in order to attract and retain the best available personnel for positions of substantial authority and to provide additional incentive to employees and directors to promote the success of the Company’s business.
−Removed: All of the plans generally provided for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, and other types of awards to employees, consultants, and directors.
−Removed: Unless provided otherwise by the administrator of the plan, options vested over four years at the rate of 25 % per year from the date of grant and must be exercised within ten years .
−Removed: Options were granted with the exercise price equal to the fair value of the underlying stock on the date of grant.
−Removed: Amended and restated 2011 incentive award plan
+Added: The Company contributed capital of $ 62,946 and received distributions including $ 60,208 of investment tax credits during fiscal year 2019.
+Added: Stock-based compensation
+Added: The Company’s equity incentive plan was adopted in order to attract and retain the best available personnel for positions of substantial authority and to provide additional incentive to employees and directors to promote the success of the business.
In June 2016, the Company adopted the Amended and Restated 2011 Incentive Award Plan (the 2011 Plan).
The 2011 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalent rights, stock payments, deferred stock, and cash-based awards to employees, consultants, and directors.
−Removed: Following its original adoption in June 2011, awards are only being made under the 2011 Plan, and no further awards will be made under any prior plan.
−Removed: As of February 1, 2020, the 2011 Plan reserves for the issuance upon grant or exercise of awards up to 3,194 shares of the Company’s common stock.
−Removed: The following table presents information related to the Company’s 2011 Incentive award plan:
−Removed: 2011 Incentive award plan (in thousands)
−Removed: Compensation expense
−Removed: Common stock options
+Added: Unless provided otherwise by the administrator of the plan, options vest over four years at the rate of 25% per year from the date of grant and must be exercised within ten years.
+Added: Options are granted with the exercise price equal to the fair value of the underlying stock on the date of grant.
+Added: As of January 30, 2021, the 2011 Plan reserves for the issuance upon grant or exercise of awards up to 2,791 shares of common stock.
+Added: The following table presents information related to stock-based compensation:
+Added: Fiscal year ended
+Added: (In thousands)
+Added: Stock options
Restricted stock units
Performance-based restricted stock units
−Removed: Total stock compensation expense
+Added: Total stock-based compensation expense
Cash received from stock option exercises
1 unchanged sentence
Common stock options
−Removed: The Company measures share-based compensation cost on the grant date, based on the fair value of the award, and recognizes the expense on a straight-line basis over the requisite service period for awards expected to vest.
−Removed: The Company estimated the grant date fair value of stock options using a Black-Scholes valuation model using the following weighted-average assumptions:
+Added: Stock-based compensation expense is measured on the grant date based on the fair value of the award.
+Added: Stock-based compensation expense is recognized on a straight-line basis over the requisite service period for awards expected to vest.
+Added: The estimated grant date fair value of stock options was determined using a Black-Scholes valuation model with the following weighted-average assumptions:
+Added: Fiscal year ended
Volatility rate
6 unchanged sentences
The expected life of options granted is derived from historical data on Ulta Beauty stock option exercises.
−Removed: Forfeitures of options are estimated at the grant date based on historical rates of the Company’s stock option activity and reduce the compensation expense recognized.
+Added: Forfeitures of stock options are estimated at the grant date based on historical rates of stock option activity and reduce the stock-based compensation expense recognized.
The Company does not currently pay a regular dividend.
−Removed: The following table presents information related to the Company’s common stock options:
−Removed: Common stock options
+Added: The following table presents information related to common stock options:
+Added: Fiscal year ended
(In thousands, except weighted-average grant date fair value)
2 unchanged sentences
Intrinsic value of options exercised
−Removed: At February 1, 2020, there was approximately $ 15,621 of unrecognized compensation expense related to unvested stock options.
−Removed: The unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately two years .
−Removed: A summary of the status of the Company’s stock option activity is presented in the following table (shares in thousands):
+Added: At January 30, 2021, there was approximately $ 16,810 of unrecognized stock-based compensation expense related to unvested stock options.
+Added: The unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately two years .
+Added: A summary of stock option activity is presented in the following table (shares in thousands):
exercise price
1 unchanged sentence
exercise price
−Removed: Common stock options outstanding
Beginning of year
+Added: Forfeited/Expired
Exercisable at end of year
Vested and Expected to vest
−Removed: The following table presents information related to options outstanding and options exercisable at February 1, 2020, under the Company’s stock option plans based on ranges of exercise prices (shares in thousands):
+Added: The following table presents information related to stock options outstanding and stock options exercisable at January 30, 2021 based on ranges of exercise prices (shares in thousands):
Options outstanding
10 unchanged sentences
$ 57.42 – $ 348.73
−Removed: The aggregate intrinsic value of outstanding and exercisable options as of February 1, 2020 was $ 38,157 and $ 19,120 , respectively.
−Removed: The last reported sale price of our common stock on the NASDAQ Global Select Market on February 1, 2020 was $ 267.91 per share.
+Added: The aggregate intrinsic value of outstanding and exercisable stock options as of January 30, 2021 was $ 53,868 and $ 18,332 , respectively.
+Added: The last reported sale price of the Company’s common stock on the NASDAQ Global Select Market on January 30, 2021 was $ 279.76 per share.
Restricted stock units
−Removed: The Company issues restricted stock units to certain employees and its Board of Directors.
−Removed: Employee grants will generally cliff vest after three years and director grants will cliff vest within one year .
+Added: Restricted stock units are granted to certain employees and directors.
+Added: Employee grants generally cliff vest after three years and director grants cliff vest within one year .
The grant date fair value of restricted stock units is based on the closing market price of shares of the Company’s common stock on the date of grant.
Restricted stock units are expensed on a straight-line basis over the requisite service period.
−Removed: Forfeitures of restricted stock units are estimated at the grant date based on historical rates of the Company’s stock award activity and reduce the compensation expense recognized.
−Removed: At February 1, 2020, unrecognized compensation cost related to restricted stock units was $ 20,484 .
−Removed: The unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately one and a half years.
−Removed: A summary of the status of the Company’s restricted stock units activity is presented in the following table (shares in thousands):
+Added: Forfeitures of restricted stock units are estimated at the grant
+Added: date based on historical rates of stock award activity and reduce the stock-based compensation expense recognized.
+Added: At January 30, 2021, unrecognized stock-based compensation expense related to restricted stock units was $ 26,267 .
+Added: The unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately one and a half years.
+Added: A summary of restricted stock units activity is presented in the following table (shares in thousands):
average grant
4 unchanged sentences
date fair value
−Removed: Restricted stock units outstanding
Beginning of year
1 unchanged sentence
Performance-based restricted stock units
−Removed: The Company issues performance-based restricted stock units annually to certain employees.
−Removed: These awards will cliff vest after three years based upon achievement of pre-established goals at the end of the second year of the term.
−Removed: Consistent with restricted stock units, the grant date fair value of performance-based restricted stock units is based on the closing market price of shares of the Company’s common stock on the date of grant.
+Added: Performance-based restricted stock units are granted to certain employees.
+Added: These awards cliff vest after three years based upon achievement of pre-established net sales and earnings before tax goals at the end of the second year of the term.
+Added: The grant date fair value of performance-based restricted stock units is based on the closing market price of shares of the Company’s common stock on the date of grant.
Performance-based restricted stock units are expensed on a straight-line basis over the requisite service period, based on the probability of achieving the performance goal, with changes in expectations recognized as an adjustment to earnings in the period of the change.
−Removed: If the performance goal is not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.
−Removed: Forfeitures of performance-based restricted stock units are estimated at the grant date based on historical rates of the Company’s stock award activity and reduce the compensation expense recognized.
−Removed: At February 1, 2020, unrecognized compensation cost related to performance-based restricted stock units was $ 6,214 .
−Removed: The unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately one year .
−Removed: A summary of the status of the Company’s performance-based restricted stock unit activity is presented in the following table (shares in thousands):
−Removed: Performance-based restricted stock units outstanding
+Added: If the performance goal is not met, no stock-based compensation expense is recognized and any previously recognized stock-based compensation expense is reversed.
+Added: Forfeitures of performance-based restricted stock units are estimated at the grant date based on historical rates of stock award activity and reduce the stock-based compensation expense recognized.
+Added: At January 30, 2021, unrecognized stock-based compensation expense related to performance-based restricted stock units was $ 183 .
+Added: The unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately one year .
+Added: A summary of performance-based restricted stock unit activity is presented in the following table (shares in thousands):
Beginning of year
2 unchanged sentences
The number of performance-based restricted stock units granted is based on achieving the targeted performance goals as defined in the performance-based restricted stock unit agreements.
−Removed: As of February 1, 2020, the maximum number of units that could vest under the provisions of the agreements was 114 .
+Added: As of January 30, 2021, the maximum number of units that could vest under the provisions of the agreements was 55 .
Net income per common share
2 unchanged sentences
(In thousands, except per share data)
−Removed: Numerator for diluted net income per share – net income
−Removed: Denominator for basic net income per share – weighted-average common shares
+Added: Weighted-average common shares – Basic
Dilutive effect of stock options and non-vested stock
−Removed: Denominator for diluted net income per share
+Added: Weighted-average common shares – Diluted
Net income per common share:
4 unchanged sentences
The plan is funded through employee contributions and a Company match.
−Removed: In fiscal 2018 and 2017, the Company match was 100 % of the first 3 % of eligible compensation.
+Added: In fiscal 2018, the Company match was 100 % of the first 3 % of eligible compensation.
Starting in January 2019, the Company added an additional 50 % match for the next 2 % of eligible compensation.
−Removed: The liability for the Company match included in accrued liabilities in the consolidated balance sheets was $ 323 and $ 9,617 as of February 1, 2020 and February 2, 2019, respectively.
−Removed: Total expense recorded under this plan is included in SG&A expenses in the consolidated statements of income and was $ 16,556 , $ 10,029 , and $ 7,570 during fiscal 2019, 2018, and 2017, respectively.
+Added: Total expense recorded under this plan is included in SG&A expenses in the consolidated statements of operations as follows:
+Added: Fiscal year ended
+Added: (In thousands)
+Added: 401(k) plan matching contribution expense
The Company also has a non-qualified deferred compensation plan for highly compensated employees whose contributions are limited under qualified defined contribution plans.
1 unchanged sentence
In fiscal 2020, 2019 and 2018, the Company match was 100 % of the first 3 % of salary.
−Removed: The liability for the Company match included in accrued liabilities in the consolidated balance sheets was $ 693 and $ 1,217 as of February 1, 2020 and February 2, 2019, respectively.
Amounts contributed and deferred under the plan are credited or charged with the performance of investment options offered under the plan as elected by the participants.
In the event of bankruptcy, the assets of this plan are available to satisfy the claims of general creditors.
−Removed: The liability for compensation deferred under the Company’s plan included in other long-term liabilities in the consolidated balance sheets was $ 29,442 and $ 19,615 as of February 1, 2020 and February 2, 2019, respectively.
The Company manages the risk of changes in the fair value of the liability for deferred compensation by electing to match its liability under the plan with investment vehicles that offset a substantial portion of its exposure.
−Removed: The cash value of the investment vehicles included in deferred compensation plan assets was $ 27,849 and $ 20,511 as of February 1, 2020 and February 2, 2019, respectively.
−Removed: Total expense recorded under this plan is included in SG&A expenses in the consolidated statements of income and was insignificant during fiscal 2019, 2018, and 2017.
+Added: Total expense recorded under this plan is included in SG&A expenses in the consolidated statements of operations and was insignificant during fiscal 2020, 2019, and 2018.
+Added: Amounts included in the consolidated balance sheets related to the deferred compensation plan were as follows:
+Added: (In thousands)
+Added: Deferred compensation plan liability
+Added: Deferred compensation plan assets
Selected quarterly financial data (unaudited)
−Removed: The following tables set forth the Company’s unaudited quarterly results of operations for each of the quarters in fiscal 2019 and fiscal 2018.
−Removed: The Company’s quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31.
+Added: The following tables set forth the unaudited quarterly results of operations for each of the quarters in fiscal 2020 and fiscal 2019.
+Added: The quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31.
(In thousands, except per share data)
5 unchanged sentences
Selling, general and administrative expenses
+Added: Impairment, restructuring and other costs
Pre-opening expenses
−Removed: Operating income
−Removed: Interest income, net
−Removed: Income before income taxes
−Removed: Income tax expense
−Removed: Net income per common share:
+Added: Operating income (loss)
+Added: Interest expense, net
+Added: Income (loss) before income taxes
+Added: Income tax expense (benefit)
+Added: Net income (loss)
+Added: Net income (loss) per common share:
(In thousands, except per share data)
16 unchanged sentences
The 2018 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.
−Removed: On March 15, 2018, the Company announced that the Board of Directors authorized a share repurchase program (the 2018 Share Repurchase Program) pursuant to which the Company could repurchase up to $ 625,000 of the Company’s common stock.
−Removed: The 2018 Share Repurchase Program authorization revoked the previously authorized but unused amount of $ 41,317 from the 2017 Share Repurchase Program.
−Removed: The 2018 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.
On March 14, 2019, the Company announced that the Board of Directors authorized a new share repurchase program (the 2019 Share Repurchase Program) pursuant to which the Company could repurchase up to $ 875,000 of the Company’s common stock.
1 unchanged sentence
The 2019 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.
−Removed: A summary of the Company’s common stock repurchase activity is presented in the following table:
+Added: On March 12, 2020, the Company announced that the Board of Directors authorized a new share repurchase program (the 2020 Share Repurchase Program) pursuant to which the Company may repurchase up to $ 1,600,000 of the Company’s common stock.
+Added: The 2020 Share Repurchase Program authorization revoked the previously authorized but unused amounts of $ 177,805 from the 2019 Share Repurchase Program.
+Added: The 2020 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time.
+Added: On April 2, 2020, the Company announced that the share repurchase program had been suspended in order to strengthen its liquidity and preserve cash while navigating the COVID-19 pandemic.
+Added: The program resumed during the fourth quarter of fiscal 2020.
+Added: A summary of common stock repurchase activity is presented in the following table:
+Added: Fiscal year ended
(In thousands)
1 unchanged sentence
Total cost of shares repurchased
−Removed: Subsequent event
−Removed: On March 10, 2020, the Board of Directors authorized a new share repurchase program (the 2020 Share Repurchase Program) pursuant to which the Company may repurchase up to $ 1,600,000 of the Company’s common stock.
−Removed: The 2020 Share Repurchase Program authorization revoked the previously authorized but unused amounts of $ 214,650 from the 2019 Share Repurchase Program.
−Removed: The 2020 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time.
−Removed: On March 11, 2020, the Company entered into Amendment No.
−Removed: 1 to the Loan Agreement, which amended the existing agreement.
−Removed: The amendment extends the maturity of the facility to March 11, 2025, provides maximum revolving loans equal to the lesser of $ 1,000,000 or a percentage of eligible owned inventory and receivables, contains a $ 50,000 sub-facility for letters of credit and allows the Company to increase the revolving facility by an additional $ 100,000 .
−Removed: On March 11, 2020, the World Health Organization declared the new strain of the coronavirus (COVID-19) a global pandemic.
−Removed: Federal, state, and local governments have since implemented various restrictions, including travel restrictions, border closings, restrictions on public gatherings, quarantining of people who may have been exposed to the virus, shelter-in-place restrictions and limitations on business operations.
−Removed: In response to government recommendations and for the health and safety of associates and guests, the Company announced on March 17, 2020 the decision to temporarily close all stores across the U.S.
−Removed: until at least March 31, 2020.
−Removed: However, all guests can continue to shop through the Ulta Beauty app or visit ulta.com.
−Removed: Due to the negative impact of COVID-19 on the financial results and the uncertainty related to its duration, the Company withdrew its guidance for fiscal 2020.
−Removed: On March 18, 2020, as a precautionary measure and to enhance financial flexibility, the Company drew down $ 800,000 under the credit facility.
−Removed: While the Company expects this uncertain matter to negatively impact the results of operations, cash flows and financial position, the related financial impact cannot be reasonably estimated at this time.
Exhibits and Financial Statement Schedules (Continued)
61 unchanged sentences
Proxy Statement for the 2021 Annual Meeting of Stockholders.
−Removed: [To be filed with the SEC under Regulation 14A within 120 days after February 1, 2020;
+Added: [To be filed with the SEC under Regulation 14A within 120 days after January 30, 2021;
except to the extent specifically incorporated by reference, the Proxy Statement for the 2021 Annual Meeting of Stockholders shall not be deemed to be filed with the SEC as part of this Annual Report on Form 10-K]
41 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.