Ulta Beauty is the largest beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products, and salon services.
−Removed: We provide unmatched product breadth, value, and convenience in a distinctive specialty retail environment.
Key aspects of our business include:
−Removed: Shopping Experience.
−Removed: Our guests can satisfy all of their beauty needs at Ulta Beauty.
−Removed: Our stores, website, and mobile applications offer more than 25,000 products from more than 600 well-established and emerging beauty brands across a variety of categories and price points, including Ulta Beauty’s own private label, the Ulta Beauty Collection.
−Removed: Our bright and open store environment and easy to shop website and mobile applications encourage our guests to discover new products and services.
+Added: One-of-a-kind Assortment.
+Added: We offer guests a differentiated assortment of more than 25,000 products from more than 600 well-established and emerging beauty brands across a variety of categories and price points.
We believe we offer the widest selection of beauty categories, including prestige and mass cosmetics, fragrance, haircare, prestige and mass skincare, bath and body products, professional hair products, and salon styling tools.
−Removed: We also offer a full-service salon in every store featuring hair, skin, makeup, and brow services.
−Removed: Value Proposition.
−Removed: We believe our focus on delivering a compelling value proposition to our guests across all of our product categories drives guest loyalty.
−Removed: We offer a comprehensive loyalty program, Ultamate Rewards, and target communications and promotions through our Customer Relationship Management (CRM) platform.
−Removed: We also offer frequent promotions and coupons, in-store events, and gifts with purchase.
−Removed: Today, we offer guests a variety of ways to shop for beauty, including in our stores, through our mobile applications, and on ulta.com.
−Removed: We also provide convenient fulfillment options including buy online pick-up in store, buy online pickup curbside, ship from store, and ship to home.
−Removed: Our stores are predominantly located in convenient, high-traffic locations such as power strip centers.
−Removed: Our typical store is approximately 10,000 square feet, including approximately 950 square feet dedicated to our full-service salon.
+Added: Store Footprint.
+Added: We operate more than 1,300 stores predominantly located in convenient, high-traffic locations.
+Added: With a bright and open store environment, we make it easy for guests to discover new products and services.
Our store design, fixtures, and open layout provide the flexibility to respond to consumer trends and changes in our merchandising strategy.
−Removed: As of January 30, 2021, we operated 1,264 retail stores across 50 states, as well as an e-commerce website and mobile applications.
+Added: We also offer a full-service salon in every store featuring hair, eyebrow and other beauty services.
+Added: Leading Digital Experiences.
+Added: Through our website, Ulta.com, and our mobile applications, we offer guests convenient, interactive and personalized digital experiences.
+Added: Our digital channels enable always-on shopping and discovery, and our diverse fulfillment options, including buy online pick-up in store, buy online pick-up curbside, ship from store, ship to home, and same-day delivery, provide guests with value and convenience.
+Added: In addition to e-commerce platforms, we offer guests a variety of unique digital experiences, including virtual try-on and skin analysis tools, which leverage augmented reality capabilities and artificial intelligence tools to provide guests with personalized experiences.
+Added: Best-in-Class Loyalty Program.
+Added: Our best-in-class loyalty program, Ultamate Rewards, enables members to earn points for every dollar spent on products and beauty services at Ulta Beauty, through purchases on our private label and co-branded credit cards, and purchases at Ulta Beauty at Target.
+Added: In addition to unique membership benefits, members can redeem points for discounts on any product or service at Ulta Beauty.
+Added: With more than 95% of total sales coming from members, we are uniquely positioned with a deep understanding of our customers and their preferences which enables us to personalize experiences and target communications and promotions through our Customer Relationship Management (CRM) platform.
+Added: Great Guest Experiences.
+Added: We cultivate human connection with warm and welcoming guest experiences across all of our channels.
+Added: Our knowledgeable and approachable store associates, our differentiated service offerings, and our efforts to create relevant, compelling digital content are competitive advantages and enable us to build strong engagement with guests.
We were founded in 1990 as a beauty retailer at a time when prestige, mass, and salon products were sold through distinct channels — department stores for prestige products;
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and salons and authorized retail outlets for professional hair care products.
−Removed: We developed a unique specialty retail concept that offers a broad range of brands and price points, a compelling value proposition, and a convenient and welcoming shopping environment.
−Removed: We define our target consumer as a beauty enthusiast, a consumer who is passionate about the beauty category and has high expectations for the shopping experience.
−Removed: We estimate that beauty enthusiasts represent approximately 57% of shoppers and 77% of spend in the U.S.
+Added: We developed a unique specialty retail concept that offers a broad range of brands and price points, select beauty services, and a convenient and welcoming shopping environment.
+Added: We define our target consumer as a beauty enthusiast, a consumer who is passionate about the beauty category, uses beauty for self-expression, experimentation, and self-investment, and has high expectations for the shopping experience.
+Added: We estimate that female beauty enthusiasts represent approximately 60% of shoppers and 75% of spend in the U.S.
beauty category.
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Beauty enthusiasts have a deep emotional connection with beauty, and historically, this connection has not diminished in softer economic environments.
−Removed: Our proprietary consumer research confirms engagement with the beauty category remains strong, but the unprecedented challenges faced as a result of the COVID-19 pandemic will likely have sustained effects on the category.
−Removed: Health and safety concerns are elevated, consumers have quickly adopted new shopping behaviors, operating costs are increasing, and many retailers have faced financial challenges, resulting in increased store closures.
−Removed: Recognizing the impact these changes will have on the beauty category, we intend to leverage the strengths of our operating model and investments to position Ulta Beauty for continued success post-COVID.
−Removed: Specifically, we are focused on accelerating efforts in the following key areas to expand our long-term market share gains and extend our competitive advantages.
−Removed: Build omnichannel operations that more deeply connects guests across channels.
−Removed: Our guest insights and loyalty program member data confirm that our guests prefer to transact in physical stores, where they can discover and interact with products and other beauty enthusiasts.
−Removed: In addition, our guests are increasingly engaging online to research, discover new products, and purchase.
−Removed: Our omnichannel guests are extremely valuable, spending nearly three times more than retail-only guests.
−Removed: To drive increased guest engagement across all channels, we are leveraging a multifaceted approach to communicate, engage, and transact, and we are expanding our fulfillment capabilities, including buy online and pickup in-store and curbside pickup.
−Removed: Our vision is to offer industry-leading omnichannel experiences that engage our guests and unlock the combined potential of our physical and digital channels.
−Removed: Reimagine how guests experience and discover Beauty .
−Removed: Beauty enthusiasts value the human connection and the physical experience of beauty.
−Removed: The Ulta Beauty guest experience is differentiated by our broad array of categories, brands, and price points, immersive digital tools, multiple shopping options, high quality services, and friendly, well-trained associates.
−Removed: The COVID-19 pandemic has increased focus on personal safety and impacted how guests test products and experience beauty.
−Removed: As a result, we are reimagining the guest experience and product discovery process and exploring ways technology, services, and the role of our associates can evolve to deliver fun, interactive, easy, and functional experiences for our guests.
−Removed: Our vision is to become the most loved destination for beauty enthusiasts by reimagining the end-to-end guest experience, facilitating inspiration, discovery, and experimentation, and serving as a trusted guide, regardless of channel.
−Removed: Drive market share growth through the deployment of winning category strategies.
−Removed: Assortment is the center of our value proposition and represents a core differentiator within the market.
−Removed: We engage beauty enthusiasts to discover and play across all categories with an enticing assortment focused on innovation and leading trends, differentiation and exclusivity, and speed to market.
−Removed: We believe our broad selection of merchandise across categories, price points, and brands offer a unique shopping experience for our guests.
−Removed: Guests can find everything they need in one shopping trip with our offering of more than 600 brands, eliminating the need to go to multiple departments stores, specialty stores, salons, drug stores, mass merchandisers, and pure play e-commerce companies that may sell the same or similar products.
−Removed: Because of our broad array of categories, brands, and price points, we appeal to a wide range of consumers of all ages, demographics, and lifestyles.
−Removed: We continue to change our assortment to reflect evolving beauty trends and innovation and to meet our guests’ desire for new products.
−Removed: Our vision is to engage and delight beauty enthusiasts with a curated beauty assortment focused on exclusivity and leading trends.
−Removed: Deepen Ulta Beauty love and loyalty.
−Removed: We have 30.7 million active Ulta Beauty members enrolled in our Ultamate Rewards loyalty program.
−Removed: Loyalty member transactions represent more than 94% of our annual total net sales, and our data demonstrates that loyalty members shop with higher frequency and spend more per visit as compared to non-members.
−Removed: While recent disruption from the COVID-19 pandemic has impacted recent member growth, we believe we can expand Ulta Beauty’s reach, relevancy, and engagement with our guests by evolving the value proposition of our Ultamate Rewards program, increasing total membership in the program, building strategic partnerships that create incremental value for our guests, and using our customer data to deliver personalized member experiences.
−Removed: Our vision is to continue to innovate and integrate the Ultamate Rewards program in meaningful ways and personalize the guest experience across all touchpoints to create stronger member connection, engagement, and loyalty.
−Removed: Drive holistic cost optimization.
+Added: Our proprietary consumer research confirms engagement with the beauty category remains strong, but the unprecedented disruption resulting from the COVID-19 pandemic has had sustained effects on the category.
+Added: Consumers are approaching their desire for normalcy with caution, reengaging in retail shopping visits while also holding to some of their new online shopping behaviors.
+Added: In addition, the operational and competitive landscape remains dynamic, and many costs are increasing, including supply chain and labor costs.
+Added: Reflecting our understanding about how the consumer and beauty category are evolving, we have refreshed our strategic framework to position Ulta Beauty for continued success.
+Added: We are focused on six key strategic pillars designed to expand our market leadership and drive longer-term profitable growth.
+Added: Drive breakthrough and disruptive growth through an expanded definition of All Things Beauty.
+Added: Beauty enthusiasts enjoy the experience of discovering and trying new products and increasingly include beauty as part of their self-care and wellness journey.
+Added: Reflecting these insights, our objective is to engage and continuously delight beauty enthusiasts with a curated, differentiated, inclusive assortment focused on leading beauty and self-care trends.
+Added: We are focused on four key areas:
+Added: maximizing growth in core categories, including makeup, skincare, haircare, and fragrance;
+Added: driving growth of cross-category strategic platforms, including Conscious Beauty at Ulta Beauty ® , Black-owned and Black, Indigenous, and People of Color (BIPOC)-founded Brands, and the Wellness Shop;
+Added: differentiating our assortment through exclusive brands and products, including our private label, Ulta Beauty Collection;
+Added: and increasing profitability through assortment management, inventory productivity, and promotional optimization.
+Added: Evolve the omnichannel experience through connected physical and digital ecosystems, All In Your World.
+Added: Our guest insights and member data confirm that beauty enthusiasts prefer to transact in physical stores, where they can discover and interact with products and other beauty enthusiasts.
+Added: At the same time, digital channels offer convenience, product reviews, and price transparency.
+Added: As a result, the guest journey is increasingly blurring across physical and digital channels.
+Added: To drive greater guest engagement across all channels, we intend to expand our physical footprint, continue to differentiate our service offerings, and grow our buy anywhere, fill anywhere capabilities while further enhancing our digital and mobile experiences and driving competitive advantage through digital innovation.
+Added: Our objective is to deliver a cohesive, industry-leading omnichannel experience that drives breakthrough engagement with our guests and unlocks the combined potential of our physical and digital channels.
+Added: Expand and deepen our presence across the beauty journey, solidifying Ulta Beauty at the Heart of the Beauty Community.
+Added: To understand longer-term shifts in consumer values, perceptions, and behaviors, as well as of-the-moment insights, we have developed a robust consumer research capability.
+Added: In addition, with more than 95% of total sales coming from members of our Ultamate Rewards loyalty program, we have unique insights about customer preferences and behavior.
+Added: Based on our proprietary insights, we know beauty enthusiasts have an emotional, personal, and deep connection with beauty.
+Added: Social media contributes to this connection, and we expect the influence and reach of beauty will continue to grow as engagement with social platforms increases.
+Added: To expand Ulta Beauty’s reach, relevancy, and guest engagement, we intend to amplify our brand purpose;
+Added: build a creator and content ecosystem to deliver compelling, relevant beauty-tainment;
+Added: leverage the power of live streaming and social selling;
+Added: drive further innovation in our Ultamate Rewards program;
+Added: and use our member data to increase personalization and drive conversion.
+Added: Our vision is to expand and deepen our presence across the beauty journey to increase consumer acquisition and drive guest engagement, loyalty, and share of wallet.
+Added: Drive operational excellence and optimization.
Similar to other retailers, we are experiencing cost pressures from macroeconomic trends, including rising wage rates and higher transportation and shipping costs.
In addition, we are managing ongoing headwinds from channel and category mix shifts.
−Removed: Through our cost optimization program, Efficiencies For Growth, we are targeting and delivering cost savings in four work streams:
−Removed: category performance improvement, indirect procurement, end-to-end operations, and real estate.
−Removed: As we look forward, we are moving beyond process optimization to develop a cost structure that will enable us to weather future economic challenges while also supporting investments for future growth.
−Removed: Our vision is to deliver profitable growth and competitive advantage by optimizing our cost structure to
−Removed: enable scale and growth, developing agile operating processes that support rapid testing, learning and implementation, and building new capabilities tailored to win in a rapidly evolving omnichannel world.
−Removed: Develop our talent and strengthen our culture.
−Removed: Leadership, culture, and engagement of our associates are key drivers of our performance.
−Removed: We have developed and sustained a world-class, guest-centric, values-based, high performance culture.
−Removed: We have an experienced management team that brings a creative merchandising approach and a disciplined operating philosophy to our business.
−Removed: We believe that beauty is for everyone, regardless of age, size, ability, skin tone, culture, or gender.
−Removed: Our vision is to provide an environment where every associate feels they can fully contribute and realize their full potential.
−Removed: We operate within the large U.S.
+Added: To mitigate the impact of these pressures and
+Added: support our future growth, we have developed a continuous improvement capability to identify and activate meaningful, cross-functional process optimization opportunities;
+Added: we are upgrading our enterprise resource planning platform to increase efficiency and support future growth;
+Added: and we are enhancing our supply chain network to increase agility, speed and cost-efficiency.
+Added: Our vision is to deliver profitable growth and competitive advantage by optimizing our cost structure to enable scale, developing agile operating processes that enable real-time visibility and decision-making, and building new capabilities tailored to win in a rapidly evolving omnichannel world.
+Added: Protect and cultivate our world-class culture and talent.
+Added: We have developed and nurtured a guest and associate-centric, values-based and high-performance culture.
+Added: These tenets are core to how we lead, how we engage with our guests and partners, and how we make decisions.
+Added: We value and encourage collaboration and enterprise thinking, and we respect and listen to our associates to continually improve as a company.
+Added: We have an experienced leadership team and committed, passionate associates committed to living our values while caring for our guests and for each other.
+Added: To support our growth and enhance the guest experience, we will continue to attract, develop and retain talent at all levels and in all functional areas, and we will continue to work to create an environment where every associate feels they can fully contribute and have an opportunity to grow.
+Added: Expand our environmental and social impact.
+Added: As a leader in the beauty industry, we have an opportunity to drive positive impact.
+Added: We believe that beauty is for everyone, regardless of age, size, ability, skin tone, culture, or gender, and we strive to provide an environment where every associate feels they can realize their full potential and every guest is optimally served, regardless of differences.
+Added: We empower and inspire guests to make informed and sustainable product choices through our unique Conscious Beauty at Ulta Beauty ® program, and we strive to protect the beauty of our natural environment and minimize our impact on the world around us by managing our stores’ energy, water, and waste footprints.
+Added: We are committed to making the world a better place, and we are focused on driving sustainable change in areas where we can make the biggest impact and committed to collaborating with others to address shared challenges.
+Added: We operate within the large and growing U.S.
beauty products and salon services industry.
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Within this market, we compete across all major categories as well as a range of price points by offering prestige, mass, and salon products.
−Removed: Our assortment strategy is built to maximize our opportunity in this industry.
In 2021, the salon services industry totaled approximately $49 billion and included hair, skin, and nail services.
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We have full-service hair salons and skin services in substantially every store and operate brow bars in most of our stores, as well as makeup services through our salons.
−Removed: Due to COVID-19 related restrictions, we were unable to offer skin and makeup services for most of fiscal 2020.
−Removed: We have plans to resume services as soon as it is safe to do so.
−Removed: Although our business was impacted by temporary store closures due to COVID-19, our research indicates that Ulta Beauty continues to increase market share across most prestige beauty categories in the overall U.S.
−Removed: COVID-19 and its various impacts have changed consumer behavior and consumption of beauty products due to the closures of offices, retail stores and other businesses and the significant decline in social gatherings.
−Removed: In addition, beauty cycles are impacted by demographics, trends, and product innovation.
−Removed: While demographic trends continue to be favorable, we believe a lack of incremental product innovation has resulted in a challenging cycle for the cosmetics category, as innovation brought to the market has not resulted in incremental product purchases.
−Removed: Despite the overall beauty market decline in 2020 due to COVID-19 impacts, we expect the beauty category will return to growth as consumers recover from the impacts of COVID-19, and we remain confident that our differentiated and diverse business model, our commitment to strategic investments, and our highly engaged associates will continue to drive market share gains for Ulta Beauty.
−Removed: Our major competitors for prestige and mass products include traditional department stores, specialty stores, drug stores, mass merchandisers, and the online capabilities of national retailers and brands, as well as pure-play e-commerce companies.
+Added: Due to remaining COVID-19 related restrictions, our services offering was limited in our fiscal year ended January 29, 2022 (fiscal 2021), but we have plans to resume these services as soon as it is safe to do so.
+Added: While both the industry and our business was impacted by ongoing COVID-19 restrictions, particularly in salon services, our research indicates that Ulta Beauty continues to increase market share across most prestige beauty categories in the overall U.S.
+Added: We expect the beauty category will continue its recovery as consumers recover from the impacts of COVID-19, and we remain confident that our differentiated and diverse business model, our commitment to strategic investments, and our highly engaged associates will continue to drive market share gains for Ulta Beauty.
+Added: Our major competitors for prestige and mass products include traditional department stores, specialty stores, grocery stores, drug stores, mass merchandisers, and the online capabilities of national retailers and brands, as well as pure-play e-commerce companies.
The market for salon services and products is highly fragmented.
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Our retail channels
−Removed: We are committed to meeting guests where and how they want to shop and strive to offer guests a compelling shopping experience through our stores, website, and mobile applications.
+Added: We are committed to meeting guests where and how they want to shop and strive to offer guests a compelling, personalized shopping experience through our stores, website, mobile applications, and partnerships.
+Added: Our member data suggests our guests prefer to transact in physical stores, where they can discover and interact with products and other beauty enthusiasts.
+Added: In fiscal 2021, 75% of our loyalty members only shopped in Ulta Beauty stores.
Our retail stores are predominantly located in convenient, high-traffic locations such as power strip centers.
Our typical store is approximately 10,000 square feet, including approximately 950 square feet dedicated to our full-service salon.
−Removed: Our retail store concept, including physical layout, displays, lighting, and quality of finishes, has evolved over time to reflect the rising expectations of our guests and to keep pace with our merchandising and operating strategies.
−Removed: We offer a full range of services in all of our stores, focusing on hair, skin, makeup, and brow services.
+Added: Our retail store concept, including physical layout, displays, lighting, and quality of finishes, has changed over time to reflect the rising expectations of our guests and our evolving merchandising and operating strategies.
+Added: We offer a full range of beauty services in all of our stores, focusing on hair, skin, makeup, and brow services.
Our current Ulta Beauty store format includes an open and modern salon area and a skin treatment room or dedicated skin treatment area on the sales floor.
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We employ highly skilled, licensed professional stylists and estheticians who offer services as well as educational experiences, including consultations, styling lessons, makeup applications, skincare regimens, and at-home care recommendations.
−Removed: Due to COVID-19 restrictions, we operated at approximately 50% capacity for salon and brow services and were unable to offer skin and makeup services for most of fiscal 2020.
−Removed: We have plans to resume skin and makeup services as soon as it is safe to do so.
−Removed: During our fiscal year ended January 30, 2021 (fiscal 2020), 74% of new stores opened in existing shopping centers and 26% opened in new shopping centers.
−Removed: Almost all new stores were opened in existing markets compared to new markets.
+Added: Due to ongoing COVID-19 restrictions, we operated at less-than-full capacity for salon and brow services for most of fiscal 2021.
+Added: While we lifted capacity constraints for most salon and brow services in fiscal 2021, we were unable to offer makeup services in all stores and skin services in most stores due to remaining COVID-19 related restrictions.
+Added: We have plans to resume these services as soon as it is safe to do so.
+Added: During fiscal 2021, 71% of new stores opened in existing shopping centers and 29% opened in new shopping centers.
+Added: All new stores were opened in existing markets.
As of January 29, 2022, we operated 1,308 stores across 50 states.
−Removed: During the first half of fiscal 2020, new store activity was temporarily paused due to COVID-19.
−Removed: New store openings resumed in the third quarter of fiscal 2020.
In addition to opening new stores, we also remodeled, relocated, or refreshed (in-store fixtures and merchandising upgrades) certain stores, as shown in the following table:
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Our real estate vision is to make Ulta Beauty accessible and convenient to more consumers across a variety of markets, a key driver of how we plan to expand our market share over time.
−Removed: We believe that over the long term, we have the potential to grow our store footprint to between 1,500 to 1,700 Ulta Beauty stores in the United States.
−Removed: We plan to further penetrate existing suburban markets, expand our presence in small markets, and further develop urban markets.
−Removed: Our rigorous analytical approach to site selection has translated into a high performing real estate portfolio.
−Removed: The average investment required to open a new Ulta Beauty store is approximately $1.4 million, which includes capital investments, net of landlord contributions, pre-opening expenses, and initial inventory, net of payables.
+Added: We believe that over the long term, we have the potential to grow our store footprint to between 1,500 to 1,700 freestanding Ulta Beauty stores in the United States.
+Added: In addition, over the long term we expect to open up to 800 Ulta Beauty at Target shops.
+Added: We leverage a variety of insights to identify the best new store locations and optimize our current store locations, including beauty market share information and insights from our loyalty members.
+Added: This insight-led, analytical approach to site selection has resulted in a high performing real estate portfolio.
+Added: The average investment required to open a new Ulta Beauty store is approximately $1.4 million, which includes capital investments, net of landlord contributions, pre-
+Added: opening expenses, and initial inventory, net of payables.
Our net investment required to open new stores and the net sales generated by new stores may vary depending on a number of factors, including geographic location.
Digital platform.
−Removed: In addition to store expansion, we continue to expand our digital capabilities.
+Added: In addition to store expansion, we continue to expand our digital capabilities as more of our guests choose to engage with us across physical and digital platforms.
+Added: In fiscal 2021, 17% of our loyalty members shopped in Ulta Beauty stores and through our digital platforms.
Our e-commerce platform has two key roles:
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Our omnichannel guests are extremely valuable, historically spending nearly three times as much as retail-only guests.
−Removed: We continue to develop and add new website and mobile features and functionality, marketing programs,
−Removed: new products and brands, and omnichannel integration points.
−Removed: We intend to establish ourselves as a leading online beauty resource by providing our guests with a rich online experience for information on key trends and products, editorial content, expanded assortments, interactive experiences, including virtual try-on capabilities, and social media content.
−Removed: We continue to improve our order fulfillment capabilities with increased speed of delivery through existing distribution centers, fast fulfillment centers (e-commerce only), select retail stores, and more efficient processes designed for e-commerce order fulfillment.
−Removed: To support our e-commerce operations, during 2020 we opened the Jacksonville fast fulfillment center, expanded e-commerce operations in the Chambersburg, Greenwood and Dallas distribution centers, and expanded the ship-from-store program to 115 stores.
−Removed: These investments have increased our e-commerce shipping capacity and improved delivery speed to guests.
−Removed: Our omnichannel capabilities such as “Buy Online, Pick-up in Store” and “Store 2 Door,” which provides the ability for customers to order in-store and have products delivered to their homes, are available in all stores.
−Removed: In response to COVID-related constraints, in fiscal 2020 our digital and store teams launched a new curbside pickup option for guests.
−Removed: We also expanded our store locator functionality to include greater visibility to store specific service offerings, in-store and curbside hours, and to communicate the opening status of local stores.
−Removed: In the Ulta app, we now provide store-specific occupancy levels for greater transparency and guest safety.
−Removed: In support of our strategic priorities, we have formed a long-term partnership with Target Corporation to create Ulta Beauty at Target, a “shop-in-shop” concept that will offer a limited assortment of established and emerging prestige brands online and in approximately 100 Target locations beginning in the second half of 2021 (with plans to scale to hundreds more over time).
+Added: We continue to develop and add new website and mobile features and functionality, marketing programs, new products and brands, and omnichannel integration points.
+Added: We intend to establish ourselves as a leading online beauty resource by providing our guests with a rich online experience, with information on key trends and products, editorial content, expanded assortments, interactive experiences, including virtual try-on capabilities, and social media content.
+Added: We continue to improve our order fulfillment capabilities with increased speed of delivery through existing distribution centers, fast fulfillment centers (e-commerce only), and select retail stores, and through more efficient processes designed for e-commerce order fulfillment.
+Added: In addition to ship to home order fulfillment, we offer guests “Buy Online, Pick-up in Store,” “Curbside Pickup,” and “Store 2 Door,” which provides the ability for customers to order in-store and have products delivered to their homes.
+Added: In fiscal 2021, we launched same-day delivery for e-commerce orders in select markets.
+Added: To expand our reach and introduce new guests to Ulta Beauty, we have formed a long-term partnership with Target Corporation to create Ulta Beauty at Target, a “shop-in-shop” concept that offers a curated assortment of more than 50 established and emerging prestige brands across a variety of categories.
+Added: Co-designed by Ulta Beauty and Target, the Ulta Beauty at Target shop is intended to mirror the Ulta Beauty experience with a unique and elevated presentation in 1,000 square feet of dedicated space separate but adjacent to Target’s core beauty department.
+Added: The shop is staffed by Target team members who are trained by Ulta Beauty to provide recommendations and answer product questions.
+Added: Members in our loyalty program, Ultamate Rewards, can accumulate points (but not redeem) for purchases made in the Ulta Beauty at Target shop.
+Added: Loyalty points can only be redeemed in Ulta Beauty stores, on Ulta.com or through our mobile applications.
+Added: As of January 29, 2022, Ulta Beauty at Target was available in approximately 100 Target locations and on target.com.
+Added: Over time, we believe Ulta Beauty at Target can be in up to 800 Target locations.
Merchandising
We offer one of the most extensive product and brand selections in our industry, including a broad assortment of branded and private label beauty products in cosmetics, fragrance, haircare, skincare, bath and body products, and salon styling tools.
−Removed: A typical Ulta Beauty store carries more than 25,000 products from more than 600 well-established and emerging beauty brands across all categories and price points, including Ulta Beauty’s own private label, the Ulta Beauty Collection.
−Removed: We present these products in an open-sell environment using centrally produced planograms (detailed schematics showing product placement in the store) and promotional merchandising planners.
+Added: Across our stores, Ulta.com and our mobile applications, we offer more than 25,000 products from more than 600 well-established and emerging beauty brands across all categories and price points, including Ulta Beauty’s own private label, the Ulta Beauty Collection.
Our merchandising team continually monitors beauty and fashion trends, historical sales trends, and new product launches to keep Ulta Beauty’s product assortment fresh and relevant and to ensure that our assortment reflects the diversity of our guests.
We believe our broad selection of merchandise, from moderate-priced brands to higher-end prestige brands, creates a unique shopping experience for our guests.
−Removed: Certain beauty enthusiast consumer groups are growing more interested in choosing products that will support their overall health and wellness.
−Removed: These groups are focused on the connection between their own personal well-being and the well-being of workers, animals, communities, and the environment, and they are increasingly supporting brands whose products and actions align with their own values.
−Removed: Reflecting this growing importance of these trends, in fiscal 2020 we launched Conscious Beauty at Ulta Beauty TM in all stores, on Ulta.com and on our app.
+Added: Certain beauty enthusiasts are growing more interested in choosing products that support their own personal well-being and the well-being of workers, animals, communities, and the environment, and they are increasingly supporting brands whose products and actions align with their own values.
+Added: Reflecting this growing importance of these trends, in fiscal 2020 we launched Conscious Beauty at Ulta Beauty ® in all stores, on Ulta.com, and on our mobile applications.
This holistic initiative provides transparency for guests to help them choose brands and products that reflect their personal values and individual needs.
−Removed: Through this initiative, we are certifying brands across four key pillars:
−Removed: Clean Ingredients, Cruelty Free, Vegan, and Sustainable Packaging.
−Removed: We also highlight brands whose philanthropic efforts are critical to their business through the positive impact pillar.
+Added: Through this initiative, we certify brands and products across four key pillars, Clean Ingredients, Cruelty Free, Vegan, and Sustainable Packaging, and recognize brands for their Positive Impact on our
Displayed in stores on an endcap constructed of recycled and recyclable materials, the program launched with 187 brands.
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As part of the launch, we published our “Made Without List,” an evolving ingredient standard for clean beauty products, and established the Conscious Beauty Advisory Council, a coalition of experts at the forefront of clean beauty, product development, and packaging sustainability.
−Removed: With the help of our
−Removed: Advisory Council, we will ensure that Conscious Beauty at Ulta Beauty TM will continue to evolve and grow as expectations and standards for clean beauty continue to change.
+Added: With the help of our Advisory Council, we will ensure that Conscious Beauty at Ulta Beauty ® will continue to evolve and grow as expectations and standards for clean beauty continue to change.
+Added: During the past few years there has been a growing focus for consumers on self-care.
+Added: Based on internal proprietary research, 65% of consumers see the beauty category as being significantly connected to wellness.
+Added: In response to this trend, we launched The Wellness Shop in select stores and online that offers an assortment of products across five platforms:
+Added: everyday care, supplements and ingestibles, relax and renew, down there care, and spa at home.
+Added: We have a long tradition of being a diversity-forward company.
+Added: We aspire to be beauty at its most inclusive and have made several important commitments across our marketing, assortment and training efforts to ensure guests, associates, partners and communities feel connected to and reflected at Ulta Beauty and are able to discover beauty on their own terms.
+Added: During fiscal 2021, we doubled the number of Black-owned brands in our assortment and are committed to dedicate 15% of our total assortment to Black-owned, Black-founded and Black-led brands over time.
We believe our private label, the Ulta Beauty Collection, is a strategically important opportunity for growth and profit contribution.
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We also offer products such as Tarte Double Duty Beauty cosmetics, IT Brushes for Ulta Beauty, and CHI for Ulta Beauty hair care appliances that are permanently exclusive to Ulta Beauty.
−Removed: Similarly, we offer a number of products that are exclusive for a limited period of time or are offered in advance of our competitors, such as Morphe, Colourpop, Pattern, and Florence.
+Added: Similarly, we offer a number of brands and products that are exclusive for a limited period of time or are offered in advance of our competitors, such as Morphe, Colourpop, Juvia’s Place, Chanel and Florence.
The Ulta Beauty Collection and permanent Ulta Beauty exclusive products represented approximately 4.5% of our total net sales in fiscal 2021.
Both permanent and temporary exclusive products represented approximately 11.0% of our total net sales in fiscal 2021.
−Removed: We offer a balanced portfolio across five primary categories:
+Added: We offer a balanced portfolio across six primary categories:
(1) cosmetics;
−Removed: (2) skincare, bath, and fragrance;
(2) haircare products and styling tools;
+Added: (3) skincare;
+Added: (4) fragrance and bath;
(5) services;
−Removed: and (5) other, which includes nail products, accessories, other revenue sources such as the private label and co-branded credit card programs, and deferred revenue related to the loyalty program and gift card breakage.
+Added: and (6) accessories and other, which includes other revenue sources such as the private label and co-branded credit card programs, royalties derived from the partnership with Target, and deferred revenue related to the loyalty program and gift card breakage.
The following table sets forth the approximate percentage of net sales attributed to each category for the periods presented:
1 unchanged sentence
(Percentage of net sales)
−Removed: Skincare, bath, and fragrance
+Added: Cosmetics (1)
Haircare products and styling tools (1)
−Removed: Other (nail products, accessories, and other)
+Added: Fragrance and bath
+Added: Accessories and other (1)
+Added: (1) Certain sales departments were reclassified between categories in the prior year to conform to current year presentation.
Our merchandising team consists of a Chief Merchandising Officer who oversees the Senior Vice President of Cosmetics and category Vice Presidents who in turn oversee Divisional Merchandise Managers and their teams of buyers.
−Removed: Our Chief Merchandising Officer also oversees our centralized merchandise planning and forecasting group to ensure consistent execution across our store base and e-commerce platform and our planogram team.
+Added: Our Chief Merchandising Officer also oversees our centralized merchandise planning and forecasting group to ensure consistent execution across our omnichannel platforms and our planogram team.
+Added: In stores, we present products in an open-sell environment using centrally produced planograms (detailed schematics showing product placement in the store) and promotional merchandising planners.
Our planogram team assists the merchants and inventory teams to keep new products flowing into stores on a timely basis.
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This group serves as a strategic partner to, and provides financial oversight of, the merchandising team.
−Removed: merchandising team creates a sales forecast by category for the year.
+Added: The merchandising team creates a sales forecast by category for the year.
Our merchandise planning group creates an open-to-buy plan, approved by senior executives, for each product category.
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We believe this structure maximizes our buying opportunities while maintaining organizational and financial control.
−Removed: Regularly replenished products are presented consistently in all stores utilizing a centralized merchandising planogram process.
POS data is used to calculate sales forecasts and to determine replenishment levels.
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Brand partnerships
−Removed: We have strong, active relationships with our more than 400 brand partners.
−Removed: Our top ten brand partners, such as Estée Lauder Companies, L’Oréal, and Shiseido among others, represented approximately 56% and 61% of our total net sales in fiscal 2020 and our fiscal year ended February 1, 2020 (fiscal 2019), respectively.
+Added: We have strong, active relationships with our brand partners.
+Added: Our top ten brand partners, such as Estée Lauder Companies and L’Oréal among others, represented approximately 54% and 56% of our total net sales in fiscal 2021 and January 30, 2021 (fiscal 2020), respectively.
We believe our brand partners view us as a significant distribution channel for growth and brand enhancement, and we work closely with them to market both new and existing brands.
1 unchanged sentence
In addition to complying with Ulta Vendor Standards, many brand partners have committed to help advance our mission to maintain the beauty of our environment and minimize our impact on the world around us by offering sustainable packaging.
+Added: We have made a commitment that 50% of packaging from products sold at our stores will be recyclable, refillable, or made from recycled or bio-sourced materials by 2025.
Marketing and advertising
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Our data demonstrates that loyalty members spend more per visit as compared to non-members.
−Removed: The 30.7 million active loyalty program members generated approximately 94% of total net sales in fiscal 2020.
−Removed: Ultamate Rewards enables customers to earn points based on their purchases.
−Removed: Points earned are valid for at least one year and may be redeemed on any product we sell or service we provide.
+Added: The 37 million active loyalty program members generated more than 95% of total net sales in fiscal 2021.
+Added: Ultamate Rewards enables customers to earn points based on their purchases at Ulta Beauty stores, through our digital platforms, and at Ulta Beauty at Target.
+Added: Points earned are valid for at least one year and may be redeemed on any product we sell or service we provide in Ulta Beauty stores or through our digital platforms.
To enhance our loyalty program, we offer co-branded and private label credit cards.
The credit cards drive higher wallet share and greater loyalty from our rewards members, provide increased consumer insights, and offer attractive economics.
−Removed: Furthermore, we continue to expand our gift card program to increase distribution to thousands of retailers through partnerships with third parties.
+Added: Furthermore, we continue to expand our gift card program to increase distribution in our store and online channels and to retail locations in store and online through partnerships with third parties.
We are directing a growing percentage of our marketing expense towards digital, social media, and streaming advertising.
−Removed: We believe these channels are highly effective in communicating with existing guests, as well as reaching those who have not yet shopped with us.
+Added: We believe these channels are highly effective in communicating with existing guests, as well as driving consideration amongst those who have not yet shopped with us.
Our marketing program has been effective in communicating with our existing online, mobile, and retail guests in a targeted and relevant way.
Our digital marketing strategy includes search engine optimization, paid search, mobile advertising, social media, display advertising, and other digital marketing channels.
−Removed: Digital marketing, coupled with our national TV and radio advertising, has helped us increase brand awareness among those not familiar with Ulta Beauty, which we believe has resulted in new guests.
+Added: Digital marketing, coupled with our national TV and radio advertising, has helped us increase brand awareness and consideration among those not familiar with Ulta Beauty, which we believe has resulted in new guests.
Staffing and operations
Retail stores
−Removed: Our current Ulta Beauty store format is typically staffed with a general manager, a services manager, and three associate managers, along with approximately twenty full- and part-time associates, including approximately four to eight prestige consultants and five to ten licensed salon professionals.
+Added: Our current Ulta Beauty store format is typically staffed with a general manager, a services manager, and three associate managers, along with approximately twenty-eight full- and part-time associates, including approximately four to eight prestige consultants and five to ten licensed salon professionals.
The management team in each store reports to the general manager.
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Members of store management receive bonuses depending on their position and based upon various performance metrics.
−Removed: Each general manager reports to a District Manager, who in turn reports to a Regional Vice President of Operations, who in turn reports to a Senior Vice President of Stores, who in turn reports to the Chief Store Operations Officer, who in turn reports to the Chief Executive Officer.
+Added: Each general manager reports to a District Manager, who in turn reports to a Regional Vice President of Operations, who in turn reports to a Senior Vice President of Stores, who in turn reports to the Chief Operating Officer, who in turn reports to the Chief Executive Officer.
Each store team receives additional support from time to time from recruiting specialists for the retail and salon operations, regionally based talent development managers, a field loss prevention team, service district educators and service district leaders, and brand partners.
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Our stores have extended hours during the holiday season.
−Removed: Due to COVID-19, for most of fiscal 2020 our store hours were shortened, on average, to nine hours a day, Monday through Saturday.
Salon services
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Our services district educators and brand partner education classes create a comprehensive educational program for approximately 5,400 Ulta Beauty salon professionals.
−Removed: Our vision is to develop an expanded and optimized end-to-end supply chain that improves operational efficiency, performance, and guest experience.
+Added: Our vision is to build and operate a dynamic and agile end-to-end supply chain that improves operational efficiency, performance, and guest experience to fuel organizational growth in an effective way.
This includes enhanced systems and processes as well as a modernized distribution center network to support our new store and e-commerce growth.
−Removed: We operate four distribution centers that support both stores and e-commerce demand, and two fast fulfillment centers that support e-commerce only.
+Added: We operate four distribution centers that support both stores and e-commerce demand, and two fast fulfillment centers that
+Added: support e-commerce orders only.
In addition, 115 stores fulfill e-commerce orders as part of our ship-from-store program.
+Added: In the future, we expect to introduce a fourth type of facility, a market fulfillment center, which will focus on our most productive products and support fulfilling ecommerce orders and stores, enabling us to improve service and responsiveness, especially in markets with high store and population density.
Inventory is shipped from our suppliers to our distribution centers and fast fulfillment centers.
−Removed: We carry more than 25,000 products and replenish our stores with such products primarily in eaches (i.e., less-than-case quantities), which allows us to ship less than an entire case when only one or two of a particular product is required.
+Added: We replenish our stores with such products primarily in eaches (i.e., less-than-case quantities), which allows us to ship less than an entire case when only one or two of a particular product is required.
Our distribution centers and fast fulfillment centers use warehouse management software systems to manage inventory to support product purchase decisions.
Product is delivered to stores using a broad network of contract and local pool (final mile) carriers.
−Removed: Information technology
−Removed: We are committed to using technology to enhance our competitive position.
−Removed: We depend on a variety of information systems and technologies (including cloud technologies) to maintain and improve our competitive position and to manage the operations of our growing store base.
−Removed: We rely on computer systems to provide information for all areas of our business, including supply chain, merchandising, POS, e-commerce, marketing, finance, accounting, and human resources.
−Removed: Our core business systems consist mostly of purchased software programs that integrate together and with our internally developed software solutions.
−Removed: Our technology also includes a company-wide network that connects all corporate users, stores, and our distribution center infrastructure and provides communications for continual polling of sales and merchandise movement at the store level.
−Removed: Our Security Operations Center constantly and proactively monitors our network and application landscape for threats and anomalies.
−Removed: We have established processes for sharing data and performing third-party risk assessment and regular
−Removed: disaster recovery planning and testing.
−Removed: Our security approach also includes multiple layers of defense and testing of controls.
−Removed: All Ulta Beauty associates have a role as stewards of company data, and we educate them on how to keep data safe.
−Removed: As part of our annual Code of Business Conduct training, we train associates on how to keep devices and data safe in public places;
−Removed: how to avoid security threats and phishing scams;
−Removed: how to maintain a secure workplace;
−Removed: and everyday practices that help maintain the security of corporate digital devices, data and systems.
−Removed: We intend to leverage our technology infrastructure and systems where appropriate to gain operational efficiencies through more effective use of our systems, people, and processes.
−Removed: We update the technology supporting our stores, distribution infrastructure, and corporate headquarters on a regular basis.
−Removed: We will continue to make investments in our information systems to facilitate growth and enhance our competitive position.
−Removed: Intellectual property
−Removed: We have registered trademarks in the United States and other countries.
−Removed: The majority of our trademark registrations contain the ULTA mark, including Ulta Beauty and two related designs, Ulta.com and Ulta Salon, Cosmetics & Fragrance (and design).
−Removed: We maintain our marks and monitor filing deadlines for renewal and continued validity.
−Removed: All marks that are deemed material to our business have been applied for or registered in the United States and select foreign countries, including Canada, Mexico and other countries in Latin America, Europe, and Asia.
−Removed: We believe our trademarks, especially those related to the Ulta Beauty brand, “All Things Beauty.
−Removed: All In One Place.
−Removed: ®” , “The Possibilities are Beautiful ® ”, “21 Days of Beauty ® ”, and “Conscious Beauty at Ulta Beauty TM ” have significant value and are important to building brand recognition.
−Removed: Government regulation
−Removed: We are affected by extensive laws, governmental regulations, administrative determinations, court decisions, and similar constraints.
−Removed: Such laws, regulations, and other constraints exist at the federal, state, or local levels in the United States.
−Removed: The products we sell in our stores, such as cosmetics (including cannabidiol products), dietary supplements, food and over-the-counter (OTC) drugs, medical devices, and styling tools, including our Ulta Beauty branded products, may be subject to regulation by the U.S.
−Removed: Food and Drug Administration (FDA), the U.S.
−Removed: Federal Trade Commission (FTC), the Consumer Product Safety Commission (CPSC), the Environmental Protection Agency (EPA), state regulatory agencies, and State Attorneys General (State AGs).
−Removed: Such regulations principally relate to the safety, labeling, manufacturing, advertising, and distribution of the products.
−Removed: In addition, the salon services provided in our stores may be subject to state and local regulations.
−Removed: Products classified as cosmetics (as defined in the Federal Food, Drug and Cosmetic Act) are not subject to pre-market approval by the FDA, but the products must generally be safe and must be properly manufactured and labeled.
−Removed: Certain products, such as sunscreens and acne treatments, are classified as OTC drugs, and certain ingestible products, such as vitamins and minerals, are classified as dietary supplements.
−Removed: Both OTC drugs and dietary supplements have specific regulatory requirements, including ingredient, labeling, and manufacturing requirements.
−Removed: Products such as wrinkle reducing lights may be classified as medical devices and, in addition to being subject to labeling and manufacturing requirements, may also be subject to premarketing review by the FDA.
−Removed: Finally, products such as styling tools (e.g.
−Removed: blow dryers and curling irons) are regulated by the CPSC, which has strict requirements including the requirement to report certain product defects.
−Removed: The labeling and packaging of all of these products may also be subject to the requirements of the Fair Packaging and Labeling Act and state specific requirements.
−Removed: Further, statements we make in advertising, including statements about the safety or efficacy of products, pricing, and environmental claims, are subject to federal and state consumer protection laws, which generally prohibit unfair or deceptive practices.
−Removed: Labor and employment and taxation laws, to which most retailers are typically subject, also impact our day-to-day operations.
−Removed: We are also subject to typical governmental and real estate land use restrictions and typical advertising and consumer protection laws (both federal and state).
−Removed: Our services business is subject to state board regulations and state licensing requirements.
−Removed: In our store leases, we require our landlords to obtain all necessary governmental approvals and permits for the site to be used as a retail site, and we also ask them to obtain any governmental approvals and permits for our specific use (but at times the responsibility for obtaining governmental approvals and permits for our specific use falls to us).
−Removed: As applicable, we require our landlords to deliver a certificate of occupancy for any work they perform on our buildings or the shopping centers in which our stores are located.
−Removed: If required by the municipality, we are responsible for delivering a certificate of occupancy for any remodeling or build-outs that we perform and are responsible for complying with all applicable laws in connection with such construction projects or build-outs.
Human capital management
We believe our associates, with their combined skills, knowledge, experiences, and commitment to serving our guests, are among our most important resources and are critical to our continued success.
+Added: We strive to make Ulta Beauty a great place to work by leading with our hearts, caring for each other in everything we do, and demonstrating integrity, authenticity and inclusivity in our daily actions.
The following table sets forth the approximate number of associates employed as of:
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We believe we have good relationships with our associates.
−Removed: Diversity and inclusion
+Added: Diversity, equity, and inclusion
Our goal is to create an inclusive environment where every associate feels he or she can be his or her authentic self and every guest is optimally served, regardless of differences .
A critical way we achieve this is by educating all associates on the lived experiences of their peers and key moments in time that have cultural or heritage significance, as well as the unconscious beliefs and biases that shape our behavior today.
−Removed: We accomplish this through open discussion forums, interactive educational experiences, and opportunities to engage with our communities.
+Added: We embed diversity, equity and inclusion (DEI) efforts through a cross-functional approach, led by our Chief Executive Officer, to ensure teams remain energized and motivated to lead in this critical space and integrate DEI in all that we do.
+Added: We accomplish this through inclusive recruitment strategies, dedicating time to celebrate intersectionality and types of diversity that are not otherwise formally recognized, encouraging associates to build personal habits through everyday inclusive actions, and managing a diverse leaders program to empower, inspire and educate high-potential diverse associates.
In addition, we aim to ensure that all in-store experiences are equitable, fair, and unbiased.
−Removed: We take action to support this goal by conducting mandatory trainings for in-store associates and providing weekly learning opportunities to focus on guest perspectives and reinforce key takeaways.
+Added: We take action to support this goal by conducting quarterly mandatory trainings for in-store associates and providing weekly learning opportunities to focus on guest perspectives and reinforce key takeaways.
We offer similar training across the organization to help key decision-makers and associates in their own learning journeys and support our Champion Diversity value and inclusion competency.
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This includes the attraction, acquisition, development, and engagement of talent and the design of associate compensation and benefits programs.
−Removed: Our human capital objectives and initiatives, including the risks related to compensation policies and practices, management development and leadership succession, diversity and inclusion
−Removed: policies and practices, and implementation and compliance monitoring of our Code of Business Conduct, are also overseen by individual Board committees as described in our Corporate Governance Guidelines.
+Added: Our human capital objectives and initiatives, including the risks related to compensation policies and practices, management development and leadership succession, diversity, equity, and inclusion policies and practices, and implementation and compliance monitoring of our Code of Business Conduct, are also overseen by individual Board committees as described in our Corporate Governance Guidelines.
We believe open and honest two-way communication is critical to maintaining strong associate engagement.
+Added: We regularly conduct an associate engagement survey to take the pulse of associates’ satisfaction with their roles, their leaders, and company as a whole.
Our executive team reviews associate engagement and satisfaction surveys to monitor associate engagement and satisfaction with their role, their leader, and the Company as a whole.
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● Health care coverage is offered to those who work more than 30 hours a week in any position.
−Removed: Coverage extends to eligible dependents, including spouses, same-sex partners and children under the age of 26.
+Added: Coverage extends to eligible dependents, including spouses, domestic partners and children under the age of 26.
We offer comprehensive medical plans that empower associates to choose the coverage that best suits them.
6 unchanged sentences
● Discounts on retail products and salon services.
−Removed: In addition, we believe wellness, like beauty, is more than skin deep, so we offer mental health resources, such as counseling services and access to apps;
−Removed: financial wellness planning and guidance;
−Removed: and health apps and educational resources for soon-to-be parents.
+Added: In addition, we believe wellness, like beauty, is more than skin deep, so we offer mental health resources, such as counseling services and access to apps, financial wellness planning and guidance, and health apps and educational resources for soon-to-be parents.
Since 2017, the Ulta Beauty Charitable Foundation (UBCF) has supported the Associate Relief Program to assist associates facing unforeseen financial hardship.
The Associate Relief Program provides short-term financial support to pay off medical bills or support temporary housing.
−Removed: During 2020, we expanded the criteria for receiving funding to include those in need of extra assistance as a result of COVID-19.
+Added: Sustainability
+Added: We strive to operate in an environmentally responsible manner.
+Added: Our retail stores are focused on energy reduction efforts by maintaining safe indoor air for all customers while products are being used in our salons, using adequate energy-efficient lighting, managing the in-store temperatures, and making efficient use of water needed for our salon services.
+Added: In addition, we will continue to look for ways to reduce our carbon footprint by investments in renewable energy credits and working with our brand partners to identify ways to work together to reduce Scope 3 emissions.
+Added: Information technology
+Added: We are committed to using technology to enhance our competitive position.
+Added: We depend on a variety of information systems and technologies (including cloud technologies) to maintain and improve our competitive position and to manage the operations of our growing store base.
+Added: We rely on computer systems to provide information for all areas of our business, including supply chain, merchandising, POS, e-commerce, marketing, finance, accounting, and human resources.
+Added: Our core business systems consist mostly of purchased software programs that integrate together and with our internally developed software solutions.
+Added: Our technology also includes a company-wide network that connects all corporate users, stores, and our distribution center infrastructure and provides communications for continual polling of sales and merchandise movement at the store level.
+Added: We manage data security and privacy at the highest levels.
+Added: Our Board of Directors is actively engaged in oversight of cybersecurity, and it is part of the charter of our Audit Committee.
+Added: Our Chief Executive Officer keeps the Board informed on cybersecurity and privacy matters throughout the year.
+Added: Our Security Operations Center constantly and proactively monitors our network and application landscape for threats and anomalies.
+Added: We have established processes for sharing data and performing third-party risk assessment and regular disaster recovery planning and response readiness testing.
+Added: Our security approach also includes multiple layers of defense and testing of controls.
+Added: We have strengthened our data protection capabilities through investments and training.
+Added: All Ulta Beauty associates have a role as stewards of company data, and we educate them on how to keep data safe.
+Added: As part of our annual Code of Business Conduct training, we train associates on how to keep devices and data safe in public places;
+Added: how to avoid security threats and phishing scams;
+Added: how to maintain a secure workplace;
+Added: and everyday practices that help maintain the security of corporate digital devices, data and systems.
+Added: We intend to leverage our technology infrastructure and systems where appropriate to gain operational efficiencies through more effective use of our systems, people, and processes.
+Added: In fiscal 2021, we began a multi-year upgrade of our enterprise resource planning platform which will provide a flexible and scalable operating environment allowing for greater business efficiency.
+Added: We will continue to make investments in our information systems to facilitate growth and enhance our competitive position.
+Added: Intellectual property
+Added: We have registered trademarks in the United States and other countries.
+Added: The majority of our trademark registrations contain the ULTA mark, including Ulta Beauty and two related designs, Ulta.com and Ulta Salon, Cosmetics & Fragrance (and design).
+Added: We maintain our marks and monitor filing deadlines for renewal and continued validity.
+Added: All marks that are deemed material to our business have been applied for or registered in the United States and select foreign countries, including Canada, Mexico and other countries in Latin America, Europe, and Asia.
+Added: We believe our trademarks, especially those related to the Ulta Beauty brand, “All Things Beauty.
+Added: All In One Place.
+Added: ®” , “The Possibilities are Beautiful ® ”, “21 Days of Beauty ® ”, and “Conscious Beauty at Ulta Beauty ® ” have significant value and are important to building brand recognition.
+Added: Government regulation
+Added: We are affected by extensive laws, governmental regulations, administrative determinations, court decisions, and similar constraints.
+Added: Such laws, regulations, and other constraints exist at the federal, state, or local levels in the United States.
+Added: The products we sell in our stores, such as cosmetics (including cannabidiol products), dietary supplements, food, over-the-counter (OTC) drugs, medical devices, and styling tools, including our Ulta Beauty branded products, may be subject to regulation by the U.S.
+Added: Food and Drug Administration (FDA), the U.S.
+Added: Federal Trade Commission (FTC), the Consumer Product Safety Commission (CPSC), the Environmental Protection Agency (EPA), state regulatory agencies, and State Attorneys General (State AGs).
+Added: Such regulations principally relate to the safety, labeling, manufacturing, advertising, and distribution of the products.
+Added: In addition, the salon services provided in our stores may be subject to state and local regulations.
+Added: Products classified as cosmetics (as defined in the Federal Food, Drug and Cosmetic Act) are not subject to pre-market approval by the FDA, but the products must generally be safe and must be properly manufactured and labeled.
+Added: Certain products, such as sunscreens and acne treatments, are classified as OTC drugs, and certain ingestible products, such as vitamins and minerals, are classified as dietary supplements.
+Added: Both OTC drugs and dietary supplements have specific regulatory requirements, including ingredient, labeling, manufacturing, and holding requirements.
+Added: Products such as wrinkle reducing lights may be classified as medical devices and, in addition to being subject to labeling and manufacturing requirements, may also be subject to premarketing review by the FDA.
+Added: Finally, products such as styling tools (e.g.
+Added: blow dryers and curling irons) are regulated by the CPSC, which has strict requirements including the requirement to report certain product defects.
+Added: The labeling and packaging of all of these products may also be subject to the requirements of the Fair Packaging and Labeling Act and state specific requirements.
+Added: Further, statements we make in advertising, including statements about the safety or efficacy of products, pricing, and environmental claims, are subject to federal and state consumer protection laws, which generally prohibit unfair or deceptive practices.
+Added: Federal, state, municipal and local labor and employment statutes, laws, ordinances, regulations, mandates, and taxation laws, to which most retailers are typically subject, also impact our day-to-day operations.
+Added: We are also subject to typical governmental and real estate land use restrictions and typical advertising and consumer protection laws (both federal and state).
+Added: Our services business is subject to state board regulations and state licensing requirements.
+Added: In our store leases, we require our landlords to obtain all necessary governmental approvals and permits for the site to be used as a retail site, and we also ask them to obtain any governmental approvals and permits for our specific use (but at times the responsibility for obtaining governmental approvals and permits for our specific use falls to us).
+Added: As applicable, we require our landlords to deliver a certificate of occupancy for any work they perform on our buildings or the shopping centers in which our stores are located.
+Added: If required by the municipality, we are responsible for delivering a certificate of occupancy for any remodeling or build-outs that we perform and are responsible for complying with all applicable laws in connection with such construction projects or build-outs.
Our business is subject to seasonal fluctuation.
3 unchanged sentences
Our principal website address is www.ulta.com.
−Removed: We make available at this address under investor relations (at http://ir.ultabeauty.com), free of charge, our proxy statement, annual report to shareholders, annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
+Added: We make available at this address under investor relations (at https://ulta.com/investor), free of charge, our proxy statement, annual report to shareholders, annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
Information available on our website is not incorporated by reference in and is not deemed a part of this Form 10-K.
In addition, our filings with the SEC may be accessed through the SEC’s website at www.sec.gov.
−Removed: All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
+Added: All statements made in any of our securities
+Added: filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
Risk Factor s
3 unchanged sentences
Business, Operational and Strategic Risks
−Removed: We may not be able to sustain our growth plans and successfully implement our long-range strategic and financial plans, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: Our continued and future growth largely depends on our ability to implement our long-range strategic and financial plans and successfully open and operate new stores on a profitable basis.
−Removed: There can be no assurance that we will be successful in implementing our growth plans or long-range strategic imperatives, including our Efficiencies for Growth cost optimization program, and our failure to do so could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: We may not be able to sustain our growth plans and successfully implement our long-range strategic, operational and financial plans, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: Our continued and future growth largely depends on our ability to implement our long-range strategic, operational and financial plans and successfully open and operate new stores on a profitable basis.
+Added: There can be no assurance that we will be successful in implementing our growth plans, long-range strategic imperatives and/or operational excellence priorities, including continuous improvement, Project SOAR (our replacement enterprise resource planning platform) and supply chain optimization, and our failure to do so could have a material adverse effect on our business, financial condition, profitability, and cash flows.
If we are unable to gauge beauty trends and react to changing consumer preferences in a timely manner, our sales may decrease.
6 unchanged sentences
If we are unable to anticipate and fulfill the merchandise needs of the consumer, our net sales may decrease and we may be forced to increase markdowns of slow-moving merchandise, either of which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: Our comparable sales and quarterly financial performance may fluctuate for a variety of reasons, which could result in a decline in the price of our common stock.
−Removed: Our comparable sales and quarterly results of operations have fluctuated in the past, and we expect them to continue to fluctuate in the future.
−Removed: A variety of factors affect our comparable sales and quarterly financial performance, including:
−Removed: ● general U.S.
−Removed: economic conditions and, in particular, the retail sales environment;
−Removed: ● changes in our merchandising strategy or mix;
−Removed: ● performance of our new and remodeled stores;
−Removed: ● the effectiveness of our inventory management;
−Removed: ● timing and concentration of new store openings, including additional human resource requirements and related pre-opening and other start-up costs;
−Removed: ● cannibalization of existing store sales by new store openings;
−Removed: ● levels of pre-opening expenses associated with new stores;
−Removed: ● timing and effectiveness of our marketing activities;
−Removed: ● seasonal fluctuations due to weather conditions;
−Removed: ● actions by our existing or new competitors;
−Removed: ● hurricanes, tornadoes, wildfires, earthquakes, mudslides, other natural disasters, and epidemics or pandemics.
−Removed: Accordingly, our results for any one fiscal quarter are not necessarily indicative of the results to be expected for any other quarter, and comparable sales for any particular future period may decrease.
−Removed: In that event, the price of our common stock may decline.
Any significant interruption in the operations of our distribution centers could disrupt our ability to deliver merchandise to our stores in a timely manner, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
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We are a retailer carrying over 25,000 beauty products that change on a regular basis in response to beauty trends, which makes the success of our operations particularly vulnerable to disruptions in our distribution infrastructure.
−Removed: Any significant interruption in the operation of our supply chain infrastructure, such as disruptions in our information systems, disruptions in operations due to fire, natural disasters, or other catastrophic events (such as COVID-19), labor disagreements, or shipping and transportation problems, could drastically reduce our ability to receive and process orders and provide products and services to our stores and guests, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: In addition, shipping and transportation costs represent a component of our cost structure and an increase in shipping and transportation costs could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: Any significant interruption in the operation of our supply chain infrastructure, such as disruptions in our information systems, disruptions in operations due to fire, natural disasters, or other catastrophic events, labor disagreements, inventory availability, or shipping and transportation problems, could drastically reduce our ability to
+Added: receive and process orders and provide products and services to our stores and guests, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: In addition, shipping and transportation costs represent a component of our cost structure and an increase in shipping and transportation costs, including as a result of inflationary pressures, could have a material adverse effect on our business, financial condition, profitability, and cash flows.
Our e-commerce platform exposes us to certain additional risks which could adversely affect our results of operations.
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Although we believe that our omnichannel participation is a distinct advantage for us due to synergies and the potential for new customers, supporting product offerings through these channels can create issues that have the potential to adversely affect our results of operations.
−Removed: For example, if our e-commerce platform successfully grows, it may do so in part by attracting existing guests, rather than new guests, who choose to purchase products from us online or through our
−Removed: mobile applications rather than from our physical stores, thereby reducing the financial performance of our stores.
+Added: For example, if our e-commerce platform successfully grows, it may do so in part by attracting existing guests, rather than new guests, who choose to purchase products from us online or through our mobile applications rather than from our physical stores, thereby reducing the financial performance of our stores.
In addition, offering different products through each channel could cause conflicts and cause some of our current or potential internet or mobile customers to consider competing distributors of beauty products.
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In addition, many of our vendors use overseas sourcing to varying degrees to manufacture some or all of their products.
−Removed: Any event causing a sudden disruption of manufacturing or imports from such foreign countries, including the imposition of additional import restrictions, unanticipated political changes, increased customs duties, legal or economic restrictions on overseas suppliers’ ability to produce and deliver products, and natural disasters, could materially harm our operations.
+Added: Any event causing a sudden disruption of manufacturing or imports from such foreign countries, including the imposition of additional import restrictions, geo-political events, unanticipated political changes, increased customs duties, and legal or economic restrictions on overseas suppliers’ ability to produce and deliver products, could result in substantial disruptions in our supply chain (including inventory availability) and materially harm our operations.
We have no long-term supply contracts with respect to such foreign-sourced items, many of which are subject to existing or potential duties, tariffs, or quotas that may limit the quantity of certain types of goods that may be imported into the United States from such countries.
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Additionally, the various product manufacturers could, in the future, decide to utilize other distribution channels for such products, therefore widening the availability of these products in other retail channels, which could negatively impact the revenue we earn from the sale of such products.
−Removed: The capacity of our distribution and order fulfillment infrastructure and the performance of our distribution centers and fast fulfillment centers may not be adequate to support our historical growth and expected future growth plans, which could prevent the successful implementation of these plans or cause us to incur excess costs to expand this infrastructure, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: We currently operate four distribution centers, which house the distribution operations for Ulta Beauty retail stores together with the order fulfillment operations of our e-commerce platform, and two fast fulfillment centers (e-commerce
+Added: The capacity of our distribution and order fulfillment infrastructure and the performance of our distribution centers and fast fulfillment centers may not be adequate to support our expected future growth plans, which could prevent the successful implementation of these plans or cause us to incur excess costs to expand this infrastructure, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: We currently operate four distribution centers, which house the distribution operations for Ulta Beauty retail stores together with the order fulfillment operations of our e-commerce platform, and two fast fulfillment centers (e-commerce only).
In 2014, we began a multi-year supply chain project, which focused on, among other things, adding capacity and system improvements to support expanded omnichannel capabilities.
−Removed: To support our historical and expected future growth and to maintain the efficient operation of our business, it is likely additional distribution centers or fast fulfillment centers will be added in the future.
+Added: To support our expected future growth and to maintain the efficient operation of our business, it is likely additional distribution facilities will be added in the future.
Our failure to effectively upgrade and expand our distribution capacity on a timely basis to keep pace with our anticipated growth in stores and the performance of our distribution centers could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: Our comparable sales and quarterly financial performance may fluctuate for a variety of reasons, which could result in a decline in the price of our common stock.
+Added: Our comparable sales and quarterly results of operations have fluctuated in the past, and we expect them to continue to fluctuate in the future.
+Added: A variety of factors affect our comparable sales and quarterly financial performance, including:
+Added: ● general U.S.
+Added: economic conditions and, in particular, the retail sales environment;
+Added: ● changes in our merchandising strategy or mix;
+Added: ● performance of our new and remodeled stores;
+Added: ● the effectiveness of our inventory management;
+Added: ● timing and concentration of new store openings, including additional human resource requirements and related pre-opening and other start-up costs;
+Added: ● cannibalization of existing store sales by new store openings;
+Added: ● timing and effectiveness of our marketing activities;
+Added: ● seasonal fluctuations due to weather conditions;
+Added: ● actions by our existing or new competitors;
+Added: ● hurricanes, tornadoes, wildfires, earthquakes, mudslides, other natural disasters, epidemics or pandemics, and geo-political events.
+Added: Accordingly, our results for any one fiscal quarter are not necessarily indicative of the results to be expected for any other quarter, and comparable sales for any particular future period may decrease.
+Added: In that event, the price of our common stock may decline.
We rely on our good relationships with brand partners to purchase prestige, mass, and salon beauty products on reasonable terms.
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We also use social media platforms as marketing tools.
−Removed: For example, we maintain Facebook, Twitter, Instagram, and Pinterest accounts.
+Added: For example, we maintain Facebook, Twitter, Instagram, TikTok, and Pinterest accounts.
As laws and regulations rapidly evolve to govern the use of these platforms and devices, the failure by us, our employees, or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms and devices could adversely impact our business, financial condition, profitability, and cash flows.
−Removed: If we fail to retain our existing senior management team or attract qualified new personnel, such failure could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: If we fail to retain our existing senior management team or attract qualified new personnel at all levels, such failure could have a material adverse effect on our business, financial condition, profitability, and cash flows.
Our business requires disciplined execution at all levels of our organization.
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Furthermore, our ability to manage our retail expansion will require us to continue to train, motivate, and manage our associates.
−Removed: We will need to attract, motivate, and retain additional qualified executive, managerial, and merchandising
−Removed: personnel and store associates.
−Removed: Competition for this type of personnel is intense, and we may not be successful in attracting, assimilating, and retaining the personnel required to grow and operate our business profitably.
+Added: We will need to attract, motivate, and retain additional qualified executive, managerial, and merchandising personnel and store and distribution center associates.
+Added: Competition for this type of personnel is intense, especially in light of the labor pressures resulting from the COVID-19 pandemic, and we may not be successful in attracting, assimilating, and retaining the personnel required to grow and operate our business profitably.
+Added: In addition, fluctuations in the cost of labor, including as a result of inflationary pressures on wages, could negatively impact our profitability and cash flows.
Our secured revolving credit facility contains certain restrictive covenants that could limit our operational flexibility, including our ability to open stores.
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Economic, Market and Other External Risks
−Removed: The COVID-19 pandemic has had, and will continue to have, a negative impact on our business, financial condition, profitability, cash flows and supply chain, as well as consumer spending.
−Removed: On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic.
−Removed: Federal, state and local governments have since implemented numerous measures to try to contain the virus, such as 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 or shutdowns of business operations.
−Removed: In response to government recommendations and for the health and safety of our associates (i.e., employees) and guests, on March 19, 2020 we temporarily closed all stores across the U.S.
−Removed: As a result of this decision, we experienced a significant reduction in customer traffic and demand which resulted in our sales and results of operations being negatively impacted.
−Removed: While we have reopened all stores, the potential temporary reclosing of certain stores in the future is possible.
−Removed: COVID-19 could also negatively impact our future results of operations by continuing to weaken demand for our products and services and/or by disrupting our supply chain.
−Removed: The COVID-19 pandemic has significantly increased economic and demand uncertainty and has caused an economic slowdown that may continue.
−Removed: The pandemic has also led to disruption and volatility in the global capital markets, which may adversely affect our and our suppliers’ liquidity.
−Removed: The COVID-19 pandemic has had, and will continue to have, a negative impact on our business, financial condition, profitability, cash flows and supply chain, although the full extent is still uncertain.
−Removed: As the pandemic continues to evolve, the extent of the impact on our 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 of our stores, the potential temporary restrictions on certain of our stores operating hours and/or in store capacity, the duration of potential future quarantines, shelter-in-place and other travel restrictions within U.S.
−Removed: and other affected countries, the duration of the pandemic (including any continuing relapses), the actions to contain the virus and/or treat its impact, the duration, timing and severity of the impact on consumer spending, and how quickly and to what extent normal economic and operating conditions can resume, all of which are highly uncertain and cannot be predicted.
−Removed: Epidemics, pandemics like COVID-19, natural disasters, or other catastrophes or crises that have and could continue to have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: Epidemics, pandemics, or other public health crises, natural disasters, such as hurricanes, tornados, wildfires, earthquakes, and mudslides, as well as acts of violence or terrorism, have resulted in the temporary closure of our stores and, in the future, could also result in physical damage to our properties, the temporary reclosing of our stores, the temporary closing of our distribution centers and fast fulfillment centers, the temporary lack of an adequate work force,
−Removed: the temporary or long-term disruption in the supply of products (or a substantial increase in the cost of those products) from domestic or foreign suppliers, the temporary disruption in the delivery of goods both to and from our distribution centers and fast fulfillment centers (or a substantial increase in the cost of those deliveries), the temporary reduction in the availability of products in our stores and/or the temporary reduction in visits to stores by customers.
−Removed: Accordingly, if one or more epidemics, pandemics, natural disasters, and/or acts of violence or terrorism were to occur (as it is with the COVID-19 pandemic), it has and could continue to have a material adverse effect on our business, financial condition, profitability, and cash flows or may require us to incur increased costs.
−Removed: The health of the economy in the channels we serve may affect consumer purchases of discretionary items such as beauty products and salon services, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: The health of the economy may affect consumer purchases of discretionary items such as beauty products and salon services, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
Our results of operations may be materially affected by conditions in the capital markets and the economy generally.
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Factors that could affect consumers’ willingness to make such discretionary purchases include:
−Removed: general business conditions, levels of employment, interest rates, tax rates, the availability of consumer credit, consumer confidence in future economic conditions, and risks related to epidemics or pandemics like COVID-19.
−Removed: In the event of a prolonged economic downturn or acute recession, consumer spending habits could be adversely affected, and we could experience lower than expected net sales.
+Added: general business conditions, inflationary pressures, levels of employment, interest rates, tax rates, the availability of consumer credit, consumer confidence in future economic conditions, and risks related to epidemics or pandemics like COVID-19 and geo-political events.
+Added: In the event of a prolonged period of inflation, a prolonged economic downturn or an acute recession, consumer spending habits could be adversely affected, and we could experience lower than expected net sales.
In addition, a general deterioration in economic conditions could adversely affect our commercial partners including our brand partners as well as the real estate developers and landlords who we rely on to construct and operate centers in which our stores are located.
A bankruptcy or financial failure of a significant vendor or a number of significant real estate developers or shopping center landlords could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: Additionally, volatility and disruption to the capital and credit markets may have a significant, adverse impact on global economic conditions, resulting in recessionary pressures and declines in consumer confidence and economic growth, which, in turn, may lead to declines in consumer spending.
+Added: Additionally, volatility and disruption to the capital and credit markets may have a significant, adverse impact on global economic conditions, resulting in inflationary or recessionary pressures and declines in consumer confidence and economic growth, which, in turn, may lead to declines in consumer spending.
Reduced consumer spending could cause changes in customer order patterns and changes in the level of merchandise purchased by our customers, and may signify a reset of consumer spending habits, all of which may adversely affect our business, financial condition, profitability, and cash flows.
+Added: The COVID-19 pandemic has had, and will continue to have, a negative impact on our business, financial condition, profitability, cash flows and supply chain, as well as consumer spending.
+Added: The COVID-19 pandemic resulted in federal, state, and local governments implementing numerous measures to try to contain the virus, such as 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 or shutdowns of business operations.
+Added: In response to government recommendations and for the health and safety of our associates (i.e., employees) and guests, on March 19, 2020 we temporarily closed all stores across the U.S.
+Added: As a result of this decision, we experienced a significant reduction in customer traffic and demand which resulted in our sales and results of operations being negatively impacted in fiscal 2020.
+Added: While we have reopened all stores and resumed most of our in-store services, the potential temporary reclosing of certain stores in the future is possible.
+Added: COVID-19 could also negatively impact our future results of operations by weakening demand for our products and services and/or by disrupting our supply chain.
+Added: The pandemic and its various impacts have also changed consumer behavior and consumption of beauty products due to the closures of offices, retail stores and other businesses and the significant decline in social gatherings.
+Added: The COVID-19 pandemic has had, and could continue to have, a negative impact on our business, financial condition, profitability, cash flows and supply chain, although the full extent is still uncertain.
+Added: As the pandemic continues to evolve and new variants continue to emerge, the extent of the impact on our 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 of our stores, the potential temporary restrictions on certain of our stores operating hours and/or in store capacity, the duration of potential future quarantines, shelter-in-place and other travel restrictions within U.S.
+Added: and other affected countries, the continued duration of the pandemic, government actions to contain the virus and/or treat its impact, the duration, timing and severity of the impact on consumer spending, and how quickly and to what extent normal economic and operating conditions can resume, all of which are still uncertain and cannot be predicted.
+Added: Epidemics, pandemics like COVID-19, natural disasters, or other catastrophes or crises that have and could continue to have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: Epidemics, pandemics, or other public health crises, natural disasters, such as hurricanes, tornados, wildfires, earthquakes, and mudslides, as well as acts of violence or terrorism, have resulted in the temporary closure of our stores and, in the future, could also result in physical damage to our properties, the temporary reclosing of our stores, the temporary closing of our distribution centers and fast fulfillment centers, the temporary lack of an adequate work force, the temporary or long-term disruption in the supply of products (or a substantial increase in the cost of those products) from domestic or foreign suppliers, the temporary disruption in the delivery of goods both to and from our distribution centers and fast fulfillment centers (or a substantial increase in the cost of those deliveries), the temporary reduction in the availability of products in our stores and/or the temporary reduction in visits to stores by customers.
+Added: Accordingly, if one or more epidemics, pandemics, natural disasters, and/or acts of violence or terrorism were to occur (as it is with the continuing COVID-19 pandemic), it has and could continue to have a material adverse effect on our business, financial condition, profitability, and cash flows or may require us to incur increased costs.
We may be unable to compete effectively in our highly competitive markets.
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Power centers typically contain three to five big-box anchor stores along with a variety of smaller specialty tenants.
−Removed: consequence of most of our stores being located in such shopping areas, our sales are derived, in part, from the volume of traffic generated by the other destination retailers and the anchor stores in power centers where our stores are located.
+Added: As a consequence of most of our stores being located in such shopping areas, our sales are derived, in part, from the volume of traffic generated by the other destination retailers and the anchor stores in power centers where our stores are located.
Customer traffic to these shopping areas may be adversely affected by the closing of such destination retailers or anchor stores, or by a reduction in traffic to such stores resulting from a regional or global economic downturn, an outbreak of flu or other viruses (such as COVID-19), a general downturn in the local area where our store is located, or a decline in the desirability of the shopping environment of a particular power center.
Such a reduction in customer traffic would reduce our sales and leave us with excess inventory, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: We may respond by increasing markdowns, initiating marketing promotions, or transferring product to other stores to reduce excess inventory, which would further decrease our gross profits and net income.
+Added: We may respond by increasing markdowns, initiating marketing
+Added: promotions, or transferring product to other stores to reduce excess inventory, which would further decrease our gross profits and net income.
Increases in the demand for, or the price of, raw materials used to build and remodel our stores could hurt our profitability.
−Removed: The raw materials used to build and remodel our stores are subject to availability constraints and price volatility caused by weather, supply conditions, government regulations, general economic conditions, and other unpredictable factors.
+Added: The raw materials used to build and remodel our stores are subject to availability constraints and price volatility caused by weather, supply conditions, government regulations, general economic conditions, inflationary pressures and other unpredictable factors.
As a retailer engaged in an active building and remodeling program, we are particularly vulnerable to increases in construction and remodeling costs.
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Although our stock repurchase program is intended to enhance stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.
−Removed: Regulatory, Legal and Cybersecurity Risks
−Removed: Cybersecurity breaches and other disruptions could compromise our information, result in the unauthorized disclosure of confidential guest, employee, Company and/or business partners’ information, damage our reputation, and expose us to liability, which could negatively impact our business.
+Added: Climate change might adversely impact our business operations and/or our supply chain.
+Added: Scientific consensus shows that carbon dioxide and other greenhouse gases in the atmosphere have caused and will in the future cause changes in weather patterns around the globe.
+Added: Climatologists predict these changes will result in the increased frequency of extreme weather events and natural disasters which could disrupt our business operations or those of our suppliers.
+Added: These weather events could also lead to an increased rate of temporary store closures and reduced customer traffic at our stores.
+Added: In addition, concern about climate change and greenhouse gases may result in new or additional legal, legislative, and/or regulatory requirements to reduce or mitigate the effects of climate change on the environment.
+Added: Any such new requirements could increase our operating costs for things like energy or packaging, as well as our product supply chain and distribution costs.
+Added: There is also increased focus, including by investors, guests, and other stakeholders, on climate change and other environmental, social, governance (ESG) and sustainability matters, including single use plastic, energy, waste and worker safety.
+Added: Concern about climate change might cause consumer preferences to change, including moving away from products or ingredients considered to have high climate change impact and towards products that are more sustainably made, and we expect to incur additional costs in connection with our ESG and sustainability initiatives.
+Added: Our reputation could be damaged if we do not (or are perceived not to) act responsibly with respect to these matters and, taken together, these matters could materially and adversely affect our business, financial condition, profitability and cash flows, as well as our ability to meet the needs of our customers.
+Added: Information Security, Cybersecurity, Data Privacy, Regulatory and Legal Risks
+Added: Cybersecurity or information security breaches and other disruptions could compromise our information, result in the unauthorized disclosure of confidential guest, employee, Company and/or business partners’ information, damage our reputation, and expose us to liability, which could negatively impact our business.
In the ordinary course of our business, we collect, process, and store sensitive and confidential data, including our proprietary business information and that of our guests, suppliers and business partners, and personally identifiable information of our guests and employees, in our data centers and on our networks.
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We rely on commercially available systems, software, tools, and monitoring to provide security for processing, transmission, and storage of confidential information.
−Removed: Despite the security measures we have in place and continual vigilance in regard to the protection of sensitive information, our systems and those of our third-party service providers may be vulnerable to security breaches, attacks by hackers, acts of vandalism, computer viruses, misplaced or lost data, human errors, or other similar events.
−Removed: Furthermore, we allow certain of our employees to work from home as a result of the COVID-19 pandemic, as certain of our third-party service providers also allow, and this remote working environment may increase cybersecurity related risks.
+Added: Despite the security measures we have in place and continual vigilance in regard to the protection of sensitive information, our systems and those of our third-party service providers may be vulnerable to security breaches, denial-of-service attacks , break-ins, phishing attacks, social engineering, acts of vandalism, computer viruses, misplaced or lost data, human errors, or other similar events.
+Added: Furthermore, we allow certain of our employees to work remotely, as certain of our third-party service providers also allow, and this remote working environment may increase cybersecurity related risks.
Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost, or stolen.
Any such access, disclosure, or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, damage our reputation, and cause a loss of confidence in our business, products, and services, which could adversely affect our business, financial condition, profitability, and cash flows.
−Removed: We are subject to risks relating to our information technology systems, and any failure to adequately protect our critical information technology systems or any material disruption of our information systems could negatively impact financial results and materially adversely affect our business operations, particularly during the holiday season.
−Removed: We are increasingly dependent on a variety of information systems, including management, supply chain and financial information, and various other processes and transactions, to effectively manage our business.
−Removed: We also plan to expand and upgrade our information systems to support historical and expected future growth.
−Removed: The failure of our information systems to perform as designed or breaches of security could have an adverse effect on our business and results of our operations.
+Added: We are subject to risks relating to our information technology systems, and any failure to adequately protect our critical information technology systems, successfully upgrade our information technology systems or any material disruption of our information systems could negatively impact financial results and materially adversely affect our business operations, particularly during the holiday season.
+Added: We are dependent on a variety of information systems, including management, supply chain and financial information, and various other processes and transactions, to effectively manage our business.
+Added: We also plan to expand and upgrade our information systems (including replacing our enterprise resource planning platform through Project SOAR) to support historical and expected future growth.
+Added: The failure of these projects, the failure of our information systems to perform as designed or breaches of security could have an adverse effect on our business and results of our operations.
Any material disruption of our systems could disrupt our ability to track, record, and analyze the merchandise that we sell and could cause delays or cancellation of customer orders or impede the manufacture or shipment of products, the processing of transactions, our ability to receive and process e-commerce orders, and/or the reporting of financial results.
Our e-commerce operations are increasingly important to our business.
−Removed: The Ulta.com website and our mobile applications serve as an effective extension of Ulta Beauty’s marketing and prospecting strategies (beyond catalogs, newspaper inserts, and national advertising) by exposing potential new customers to the Ulta Beauty brand, product offerings, and enhanced content.
−Removed: As the importance of our website, mobile applications, and e-commerce operations to our business grows, we are increasingly vulnerable to downtime and other technical failures.
+Added: The Ulta.com website and our mobile applications serve as an effective extension of Ulta Beauty’s marketing and prospecting strategies by exposing potential new customers to the Ulta Beauty brand, product offerings, and enhanced content.
+Added: As the importance of our website, mobile applications, and e-commerce operations to our business continues to grow, we are increasingly vulnerable to downtime and other technical failures.
Our failure to successfully respond to these risks could reduce e-commerce sales and damage our brand’s reputation.
+Added: Failure to maintain satisfactory compliance with applicable privacy and data protection laws and regulations may subject us to negative financial consequences, including civil or criminal penalties, and harm our brand and reputation.
+Added: Complex local, state and national laws and regulations apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data.
+Added: These privacy and data protection laws and regulations are quickly evolving, with new or modified laws and regulations proposed and implemented frequently (such as those enacted by California and certain other states) and existing laws and regulations subject to new or different interpretations and enforcement.
+Added: Complying with these laws and regulations may cause us to incur substantial costs, require changes to our business practices and limit our ability to obtain data used to provide a differentiated guest experience.
+Added: In addition, our failure to comply with applicable laws and regulations or other obligations to which we may be subject relating to
+Added: personal data, or to protect personal data from unauthorized access, use or other processing, could result in enforcement actions and regulatory investigations against us, claims for damages by guests and other affected individuals, fines and/or damage to our brand and reputation, any of which could adversely affect our business, financial condition, profitability, and cash flows.
Litigation and other legal or regulatory proceedings or claims and the outcome of such litigation, proceedings or claims, including possible fines and penalties, could have a material adverse effect on our business and any loss contingency accruals may not be adequate to cover actual losses.
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Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations if, as a result of actual or threatened intellectual property infringement claims, we are unable to enter into licenses on acceptable terms.
−Removed: were able to obtain a license, the rights may be non-exclusive, which would give our competitors access to the same intellectual property.
+Added: Even if we were able to obtain a license, the rights may be non-exclusive, which would give our competitors access to the same intellectual property.
The inability to enter into licenses could harm our business significantly.
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We do not own or operate any manufacturing facilities and therefore depend upon independent third-party vendors for the manufacture of all products manufactured uniquely for Ulta Beauty, including the Ulta Beauty Collection and Ulta Beauty branded gifts with purchase and other promotional products.
−Removed: Our third-party manufacturers of Ulta Beauty products may not maintain adequate controls with respect to product specifications and quality and may not continue to produce products that are consistent with applicable regulatory requirements.
+Added: Our third-party manufacturers of Ulta Beauty products may not maintain adequate controls with respect to product specifications, content, labeling and/or quality and may not continue to produce products that are consistent with applicable regulatory requirements.
If we or our third-party manufacturers fail to comply with applicable regulatory requirements, we could be required to take costly corrective action.
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However, cosmetic products may become subject to more extensive regulation in the future.
−Removed: These events could interrupt the marketing and sale of our Ulta Beauty products, severely damage our brand reputation and image in the marketplace, increase the cost of our products, cause us to fail to meet customer expectations, or cause us to be unable to deliver merchandise in sufficient quantities or of sufficient quality to our stores, any of which could result in lost sales, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: These events could interrupt the marketing and sale of our Ulta Beauty products, severely damage our brand reputation and image in the marketplace, increase the cost of our products, cause us
+Added: to fail to meet customer expectations, or cause us to be unable to deliver merchandise in sufficient quantities or of sufficient quality to our stores, any of which could result in lost sales, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
We, as well as our vendors, are subject to laws and regulations that could require us to modify our current business practices and incur increased costs, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
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● Future changes in healthcare reform legislation could significantly impact our business.
−Removed: In addition, concern over climate change and greenhouse gases may result in new or additional legal, legislative, and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation, and utility increases, which could adversely affect our business.
−Removed: There is also increased focus, including by investors, guests, and other stakeholders on these and other environmental, social, governance and sustainability matters, including the use of plastic, energy, waste, and worker safety.
−Removed: Our reputation could be damaged if
−Removed: we do not (or are perceived not to) act responsibly with respect to these matters, which could adversely affect our business, financial condition, profitability, and cash flows.
The formulation, manufacturing, packaging, labeling, distribution, sale, and storage of our vendors’ products and our Ulta Beauty branded products are also subject to extensive regulation by various federal agencies, including FDA, FTC, CPSC, and various state and local agencies, such as State AGs and District Attorneys.
−Removed: If we, our vendors, or the manufacturers of our Ulta Beauty branded products fail to comply with those regulations, we could become subject to significant penalties, claims, or product recalls, which could harm our results of operations or our ability to conduct our business.
+Added: If we, our vendors, or the manufacturers of our Ulta Beauty branded products fail to comply with those regulations, we could become subject to significant penalties, claims, or product recalls, which could harm our results of operations, our reputation and/or our ability to conduct our business.
Additionally, the adoption of new regulations or changes in the interpretations of existing regulations may result in significant compliance costs or discontinuation of product sales and may impair the marketability of our vendors’ products or our Ulta Beauty branded products, resulting in significant loss of net sales.
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® ,” “Ulta Beauty,” “Ulta,” and other marks incorporating our name and “All Things Beauty.
−Removed: All in One Place ® ,” “21 Days of Beauty ® ,” and “Conscious Beauty at Ulta Beauty TM ,” copyrights in our website and mobile applications content, rights to our domain name www.ulta.com, and trade secrets and know-how with respect to our Ulta Beauty branded product formulations, product sourcing, sales and marketing and other aspects of our business, and our digital innovations such as try-on applications and artificial intelligence.
+Added: All in One Place ® ,” “21 Days of Beauty ® ,” and “Conscious Beauty at Ulta Beauty ® ,” copyrights in our website and mobile applications content, rights to our domain name www.ulta.com, and trade secrets and know-how with respect to our Ulta Beauty branded product formulations, product sourcing, sales and marketing and other aspects of our business, and our digital innovations such as try-on applications and artificial intelligence.
As such, we rely on trademark and copyright law, trade secret protection, and confidentiality agreements with certain of our employees, consultants, suppliers, and others to protect our proprietary rights.
If we are unable to protect or preserve the value of our trademarks, copyrights, trade secrets, or other proprietary rights for any reason (including any cybersecurity incident that results in the unauthorized use of our intellectual property rights), or if other parties infringe on our intellectual property rights, our brand and reputation could be impaired and we could lose customers, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: In addition, we license certain of our trademarks to some of our business partners.
+Added: While we enter into comprehensive agreements with our business partners covering, among other things, use of our brand name, the value of our brand and our reputation could be impaired to the extent that our business partners do not operate their businesses, including their stores or websites, in a manner consistent with our requirements regarding our brand identities and customer experience standards.
+Added: Failure to protect the value of our brands, or any other harmful acts or omissions by a business partner, could have an adverse effect on our business, financial condition, profitability, cash flows and reputation.
Our Ulta Beauty branded products and salon services may cause unexpected and undesirable side effects that could result in their discontinuance or expose us to lawsuits, either of which could result in unexpected costs and damage to our reputation, which could have a material adverse effect on our business, financial condition, profitability, and cash flows .
−Removed: Unexpected and undesirable side effects caused by our Ulta Beauty branded products for which we have not provided sufficient label warnings or salon services, which may have been performed negligently, could result in the
−Removed: discontinuance of sales of our products or of certain salon services or prevent us from achieving or maintaining market acceptance of the affected products and services.
+Added: Unexpected and undesirable side effects caused by our Ulta Beauty branded products for which we have not provided sufficient label warnings or salon services, which may have been performed negligently, could result in the discontinuance of sales of our products or of certain salon services or prevent us from achieving or maintaining market acceptance of the affected products and services.
Such side effects could also expose us to product liability or negligence lawsuits.
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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.