What changed in this filing

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Item 1. Financial Statements

2022-05-26 compared with 2021-12-02 · 45 added, 191 removed, 220 unchanged (52% of the section changed)

32 unchanged sentences

52,038 , 52,311 , and 55,090 shares outstanding;

at October 30, 2021 (unaudited), January 30, 2021, and October 31, 2020 (unaudited), respectively

at April 30, 2022 (unaudited), January 29, 2022, and May 1, 2021 (unaudited), respectively

Treasury stock-common, at cost

1 unchanged sentence

Retained earnings

Accumulated other comprehensive income (loss)

Total stockholders’ equity

4 unchanged sentences

13 Weeks Ended

39 Weeks Ended

(In thousands, except per share data)

1 unchanged sentence

Selling, general and administrative expenses

Impairment, restructuring and other costs

Pre-opening expenses

7 unchanged sentences

Ulta Beauty, Inc.

Consolidated Statements of Comprehensive Income

13 Weeks Ended

39 Weeks Ended

(In thousands)

Other comprehensive income:

Foreign currency translation adjustments

Comprehensive income

See accompanying notes to consolidated financial statements.

Ulta Beauty, Inc.

Consolidated Statements of Cash Flows

5 unchanged sentences

Non-cash lease expense

Long-lived asset impairment charge

Deferred income taxes

11 unchanged sentences

Investing activities

Proceeds from short-term investments

Capital expenditures

Acquisitions, net of cash acquired

Purchases of equity investments

Other investments

Net cash used in investing activities

Financing activities

Proceeds from long-term debt

Payments on long-term debt

Repurchase of common shares

1 unchanged sentence

Purchase of treasury shares

Debt issuance costs

Net cash used in financing activities

13 unchanged sentences

(In thousands)

Income (Loss)

Balance – January 30, 2021

5 unchanged sentences

Balance – May 1, 2021

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares

Balance – July 31, 2021

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares

Balance – October 30, 2021

See accompanying notes to consolidated financial statements.

Ulta Beauty, Inc.

Consolidated Statements of Stockholders’ Equity

Comprehensive

Stockholders'

(In thousands)

Income (Loss)

Balance – February 1, 2020

Balance – January 29, 2022

Stock-based compensation

Foreign currency translation adjustments

Stock options exercised and other awards

1 unchanged sentence

Repurchase of common shares

Balance – May 2, 2020

Stock-based compensation

Foreign currency translation adjustments

Stock options exercised and other awards

Purchase of treasury shares

Balance – August 1, 2020

Stock-based compensation

Foreign currency translation adjustments

Stock options exercised and other awards

Purchase of treasury shares

Balance – October 31, 2020

Balance – April 30, 2022

See accompanying notes to consolidated financial statements.

3 unchanged sentences

Business and basis of presentation

The Company was founded in 1990 to operate specialty retail stores selling cosmetics, fragrance, haircare and skincare products, and related accessories and services.

Ulta Beauty, Inc.

was founded in 1990 to operate specialty retail stores selling cosmetics, fragrance, haircare and skincare products, and related accessories and services.

The stores also feature full-service salons.

1 unchanged sentence

and its consolidated subsidiaries.

As of October 30, 2021, the Company operated 1,302 stores across 50 states, as shown in the table below.

As of April 30, 2022, the Company operated 1,318 stores across 50 states, as shown in the table below.

New Hampshire

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The Company’s business is subject to seasonal fluctuation, with significant portions of net sales and net income being realized during the fourth quarter of the fiscal year due to the holiday selling season.

The results for the 13 and 39 weeks ended October 30, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending January 29, 2022, or for any other future interim period or for any future year, in particular as a result of the uncertainty around the continuing effects of the COVID-19 pandemic on future periods.

The results for the 13 weeks ended April 30, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending January 28, 2023, or for any other future interim period or for any future year, in particular as a result of the uncertainty around the continuing effects of the COVID-19 pandemic, geo-political events, and inflationary cost pressures on future periods.

These unaudited interim consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended January 29, 2022.

5 unchanged sentences

The Company’s quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31.

The third quarter in fiscal 2021 and 2020 ended on October 30, 2021 and October 31, 2020, respectively.

The first quarter in fiscal 2022 and 2021 ended on April 30, 2022 and May 1, 2021, respectively.

Use of estimates

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The Company considers its accounting policies relating to inventory valuations, vendor allowances, impairment of long-lived tangible and right-of-use assets, loyalty program and income taxes to be the most significant accounting policies that involve management estimates and judgments.

Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment, including those related to the impacts of the COVID-19 pandemic, will be reflected in the consolidated financial statements in future periods.

Impairment of long-lived tangible and right-of-use assets

The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets.

The asset group identified is at the store level and includes both property and equipment and operating lease assets.

Significant estimates are used in determining future cash flows of each store over its remaining lease term including our expectations of future projected cash flows including revenues and operating expenses.

An impairment loss is recorded if the carrying amount of the long-lived asset exceeds its fair value.

Long-lived tangible and right-of-use assets are evaluated for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable.

An undiscounted cash flow analysis is performed over the asset group.

Asset groups are written down only to the extent that their carrying value exceeds their respective fair value.

Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant.

Management’s forecast of future cash flows is based on the income approach.

The fair value of individual operating lease assets is determined under the market approach using estimated market rent assessments based on broker quotes.

The determination of fair value under the income approach requires assumptions including forecasts of future cash flows (such as revenue growth rates and operating expenses) and selection of a market-based discount rate.

Estimates of market rent are based on non-binding broker quotes.

As these inputs are unobservable, they are classified as Level 3 inputs

under the fair value hierarchy (see Note 9, “Fair value measurements”).

If actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, there may be exposure to additional impairment losses in a future period (see Note 4, “Impairment, restructuring and other costs”).

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted.

The CARES Act, among other things, includes provisions relating to refundable payroll taxes, deferral of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

The most significant relief measures which the Company qualifies for are the employee retention credit, payroll tax deferral, and technical corrections to tax depreciation.

The Company recognizes government grants for which there is a reasonable assurance of compliance with grant conditions and receipt of credits.

The Company believes there is a reasonable assurance that it will comply with the relevant conditions of the employee retention credit provision of the CARES Act and that it will receive the credit.

The Company will continue to assess the treatment of the CARES Act to the extent additional guidance and regulations are issued, the further applicability of the CARES Act, and the potential impacts on the business.

Employee retention credit (ERC) and payroll tax deferral.

The ERC allows for a refundable tax credit against certain employment taxes equal to 50% of the first ten thousand dollars in qualified wages paid to each employee commencing on March 13, 2020 through January 1, 2021 and 70% of the first ten thousand dollars, per quarter, in qualified wages paid to each employee commencing on January 1, 2021 through December 31, 2021.

To be eligible, the Company must (i) have had operations fully or partially suspended because of a governmental order, or (ii) have had gross receipts decline by more than 50% in a calendar quarter in fiscal 2020 or 20% in a calendar quarter in fiscal 2021, when compared to the same quarter in 2019.

Qualified wages are limited to wages paid to employees who were not providing services due to the COVID-19 pandemic.

During the 13 weeks ended October 30, 2021 and October 31, 2020, there was $ 634 and $ 2,402 , respectively, related to the ERC recognized as a reduction of the associated costs within selling, general and administrative expenses on the consolidated statements of income.

During the 39 weeks ended October 30, 2021 and October 31, 2020, there was $ 4,021 and $ 50,583 , respectively, related to the ERC recognized as a reduction of the associated costs within selling, general and administrative expenses on the consolidated statements of income.

The receivable for the ERC was $ 56,426 , $ 52,405 , and $ 50,583 as of October 30, 2021, January 30, 2021, and October 31, 2020, respectively.

Additionally, the CARES Act contains provisions for the deferral of the employer portion of social security taxes incurred through the end of calendar 2020.

As of January 30, 2021 and October 31, 2020, there was $ 43,845 and $ 34,060 , respectively, of social security tax payments deferred, of which 50% was required to be remitted by December 2021 and the remaining 50% by December 2022.

The deferred amounts were recorded within accrued liabilities on the consolidated balance sheets.

The company submitted payments for these taxes during the 13 weeks ended October 30, 2021, the therefore has no deferral balance as of October 30, 2021.

Technical corrections to tax depreciation.

The CARES Act also includes a technical correction of tax depreciation methods for qualified improvement property, which changes 39-year property to 15-year property eligible for 100% tax bonus depreciation.

This provision of the CARES Act resulted in a cash tax refund of $ 4,600 relating to property and equipment, from filing an amendment to the Company’s 2018 federal income tax return, during the 13 and 39 weeks ended October 31, 2020.

Recently adopted accounting pronouncements

Taxes – Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes.

The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intraperiod allocation, and calculating income taxes in interim periods.

adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group, among others.

This guidance is effective for interim and annual reporting periods beginning after December 15, 2020.

Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued.

The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively.

The Company adopted the new guidance as of January 31, 2021, and its adoption had no impact on the Company’s consolidated financial position, results of operations, or cash flows.

Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment, including those related to the impacts of the COVID-19 pandemic, geo-political events, and inflationary cost pressures, will be reflected in the consolidated financial statements in future periods.

Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue.

Other revenue sources mainly include the private label and co-branded credit card programs, as well as deferred revenue related to the loyalty program and gift card breakage.

Other revenue includes 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.

Disaggregated revenue

1 unchanged sentence

13 Weeks Ended

39 Weeks Ended

(Percentage of net sales)

Cosmetics (1)

Haircare products and styling tools

1 unchanged sentence

Accessories and other

(1) Certain sales departments were reclassified between categories in the prior year to conform to current year presentation.

Deferred revenue

Deferred revenue primarily represents contract liabilities for the obligation to transfer additional goods or services to a guest for which the Company has received consideration, such as unredeemed Ultamate Rewards loyalty points and unredeemed Ulta Beauty gift cards.

Deferred revenue primarily represents contract liabilities for the Company’s obligation to transfer additional goods or services to a guest for which the Company has received consideration, such as unredeemed Ultamate Rewards loyalty points and unredeemed Ulta Beauty gift cards.

In addition, breakage on gift cards is recognized proportionately as redemption occurs.

The following table provides a summary of the changes included in deferred revenue during the 13 and 39 weeks ended October 30, 2021 and October 31, 2020:

13 weeks ended

39 weeks ended

The following table provides a summary of the changes included in deferred revenue during the 13 weeks ended April 30, 2022 and May 1, 2021:

(In thousands)

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(2) Revenue recognized in the current period related to the beginning liability .

Other amounts included in deferred revenue were $ 9,405 and $ 15,216 at October 30, 2021 and October 31, 2020, respectively.

Impairment, restructuring and other costs

The following table provides a summary of the impairment, restructuring and other costs in the consolidated statements of income:

13 weeks ended

39 weeks ended

(In thousands)

Impairment of long-lived tangible and right-of-use assets (1)

Store closures

Impairment of long-lived tangible and right-of-use assets (1)

Lease termination costs

Severance (2)

Total store closures

Suspension of Canadian expansion

Impairment of long-lived tangible and right-of-use assets (1)

Lease termination costs

Severance (2)

Total suspension of Canadian expansion

Other severance (2)

(1) Amount included in the non-cash $ 69,932 long-lived asset impairment charge on the consolidated statements of cash flows for the 39 weeks ended October 31, 2020.

(2) As of October 31, 2020, there was $ 6,202 in accrued liabilities on the consolidated balance sheets for restructuring and was primarily for severance.

There was no liability for restructuring as of October 30, 2021.

(3) There were no impairment, restructuring and other costs recognized during the 13 and 39 weeks ended October 30, 2021.

Impairment of long-lived tangible and right-of-use assets.

As a result of the COVID-19 pandemic, the Company experienced lower than projected revenues and identified indicators of impairment for certain retail stores during the 39 weeks ended October 31, 2020.

The Company’s analysis indicated that the carrying values of certain long-lived tangible and right-of-use assets exceeded their respective fair values.

As a result, the Company recognized impairment charges related to certain retail stores during the 26 weeks ended August 1, 2020.

There were no asset impairment charges recognized during the 13 weeks ended October 31, 2020.

These impairment costs were primarily driven by lower than projected revenues, lower market rate assessments, and the effect of temporary store closures as a result of the COVID-19 pandemic.

The Company also recorded long-lived tangible and right-of-use asset impairment charges related to store closures during the 39 weeks ended October 31, 2020 as described below.

Store closures and other costs.

During the second quarter of fiscal 2020, the Company announced that after evaluating its store portfolio, it would permanently close 19 stores in the third quarter of fiscal 2020.

Accordingly, for the 13 and 39 weeks ended October 31, 2020, the Company recognized impairment, restructuring and other costs related to store closures.

The impairment charges reduced the carrying value of the long-lived tangible and right-of-use assets to their fair value.

Other amounts included in deferred revenue were $ 12,335 and $ 16,918 at April 30, 2022 and May 1, 2021, respectively.

Goodwill and other intangible assets

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at October 30, 2021, January 30, 2021, and October 31, 2020.

No additional goodwill was recognized during the 13 and 39 weeks ended October 30, 2021.

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at April 30, 2022, January 29, 2022, and May 1, 2021.

No additional goodwill was recognized during the 13 weeks ended April 30, 2022.

The recoverability of goodwill is reviewed annually during the fourth quarter or more frequently if an event occurs or circumstances change that would indicate that impairment may exist.

7 unchanged sentences

Operating lease cost from the control date through store opening date is classified within pre-opening expenses.

The following table presents a summary of operating lease costs for the 13 and 39 weeks ended October 30, 2021 and October 31, 2020:

13 weeks ended

The following table presents a summary of operating lease costs:

13 Weeks Ended

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Operating lease assets obtained in exchange for operating lease liabilities (non-cash)

(1) Excludes $ 24,570 and $ 22,789 related to cash received for tenant incentives for the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

(1) Excludes $ 6,701 and $ 7,986 related to cash received for tenant incentives for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

Commitments and contingencies

The Company is involved in various legal proceedings that are incidental to the conduct of the business including both class action and single plaintiff litigation.

In the opinion of management, the amount of any liability with respect to these proceedings, either individually or in the aggregate, will not have a material adverse effect on the consolidated financial position, results of operations or cash flows.

In the opinion of management, the amount of any liability with respect to these proceedings, either individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

On March 11, 2020, the Company entered into Amendment No.

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Outstanding borrowings bear interest, at the Company’s election, at either a base rate plus a margin of 0 % to 0.125 % or the London Interbank Offered Rate plus a margin of 1.125 % to 1.250 %, with such margins based on the Company’s borrowing availability, and the unused line fee is 0.20 % per annum.

As of October 30, 2021, January 30, 2021, and October 31, 2020, there were no borrowings outstanding under the credit facility.

The weighted average interest rate was 1.56 % for the 39 weeks ended October 31, 2020.

As of October 30, 2021, the Company was in compliance with all terms and covenants of the Loan Agreement.

As of April 30, 2022, January 29, 2022, and May 1, 2021, there were no borrowings outstanding under the credit facility.

As of April 30, 2022, the Company was in compliance with all terms and covenants of the Loan Agreement.

Fair value measurements

The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates their estimated fair values due to the short maturities of these instruments.

The carrying value of long-term debt also approximates its fair value.

Fair value is measured using inputs from the three levels of the fair value hierarchy, which are described as follows:

2 unchanged sentences

● Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.

As of October 30, 2021, January 30, 2021, and October 31, 2020, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 38,333 , $ 32,909 , and $ 29,240 , respectively.

As of April 30, 2022, January 29, 2022 and May 1, 2021, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 40,792 , $ 40,839 , and $ 35,449 , respectively.

The liabilities are categorized as Level 2 as they are based on third-party reported values, which are based primarily on quoted market prices of underlying assets of the funds within the plan.

Some assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances.

These assets can include long-lived assets and goodwill that are reduced to fair value when impaired.

Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

Investments in renewable energy projects are accounted for under the equity method of accounting.

The balance of these investments was $ 2,815 , $ 3,174 , and $ 3,642 as of October 30, 2021, January 30, 2021, and October 31, 2020, respectively, and is included in other long-term assets on the consolidated balance sheets.

The Company did not contribute capital or receive investment tax credits during the 39 weeks ended October 30, 2021.

The Company contributed capital of $ 5,665 and received distributions including $ 1,690 of investment tax credits during the 39 weeks ended October 31, 2020.

Stock-based compensation

1 unchanged sentence

Stock-based compensation expense is recognized on a straight-line basis over the requisite service period for awards expected to vest.

The estimated grant date fair value of stock options was determined using a Black-Scholes valuation model using the following weighted-average assumptions for the periods indicated:

The estimated grant date fair value of stock options was determined using a Black-Scholes valuation model using the following weighted-average assumptions:

13 Weeks Ended

3 unchanged sentences

Dividend yield

The Company granted 61 and 248 stock options during the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

Stock-based compensation expense for stock options was $ 2,712 and $ 2,900 for the 13 weeks ended October 30, 2021 and October 31, 2020, respectively.

Stock-based compensation expense for stock options was $ 8,710 and $ 8,247 for the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

The weighted-average grant date fair value of these stock options was $ 109.72 and $ 54.40 for the 39 weeks ended October 30, 2021 and October 31,

2020, respectively.

At October 30, 2021, there was approximately $ 14,108 of unrecognized stock-based compensation expense related to unvested stock options.

There were 60 and 161 restricted stock units issued during the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

Stock-based compensation expense for restricted stock units was $ 4,622 and $ 5,098 for the 13 weeks ended October 30, 2021 and October 31, 2020, respectively.

Stock-based compensation expense for restricted stock units was $ 14,606 and $ 14,446 for the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

At October 30, 2021, there was approximately $ 27,111 of unrecognized stock-based compensation expense related to restricted stock units.

There were 46 performance-based restricted stock units issued during the 39 weeks ended October 30, 2021.

The Company did not issue any performance-based restricted stock units during the 39 weeks ended October 31, 2020.

Stock-based compensation expense for performance-based restricted stock units was $ 1,786 and $ 386 for the 13 weeks ended October 30, 2021 and October 31, 2020, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 4,901 and $ 286 for the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

At October 30, 2021, there was approximately $ 15,898 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

Awards with market conditions are classified as liability awards and the fair value is determined using a Monte Carlo simulation.

Market-based restricted stock units were granted to the former CEO in fiscal 2018 and settled during the 39 weeks ended October 30, 2021.

Compensation expense for liability awards was $ 3,289 and $ 198 for the 13 weeks ended October 30, 2021 and October 31, 2020, respectively.

Compensation expense (benefit) for liability awards was $ 7,671 and ( $ 331 ) for the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

The total compensation expense for this award was $ 10,000 and 28 shares were settled during the 39 weeks ended October 30, 2021 .

The expected volatility is based on the historical volatility of the Company’s common stock.

The risk-free interest rate is based on the United States Treasury yield curve in effect on the date of grant for the respective expected life of the option.

The expected life represents the time the options granted are expected to be outstanding.

The expected life of options granted is derived from historical data on Ulta Beauty stock option exercises.

Forfeitures of stock options are estimated at the grant date based on historical rates of stock option activity and reduce the stock-based compensation expense recognized.

The Company does not currently pay a regular dividend.

The Company granted 48 and 61 stock options during the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

Stock-based compensation expense for stock options was $ 2,342 and $ 2,897 for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

The weighted-average grant date fair value of these stock options was $ 149.14 and $ 109.72 for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

At April 30, 2022, there was approximately $ 16,062 of unrecognized stock-based compensation expense related to unvested stock options.

There were 50 and 52 restricted stock units issued during the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

Stock-based compensation expense for restricted stock units was $ 4,452 and $ 4,835 for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

At April 30, 2022, there was approximately $ 35,627 of unrecognized stock-based compensation expense related to restricted stock units.

There were 37 and 46 performance-based restricted stock units issued during the 13 weeks ended April 30, 2022 and May 1, 2021.

Stock-based compensation expense for performance-based restricted stock units was $ 3,562 and $ 1,246 for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

At April 30, 2022, there was approximately $ 25,921 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

Income tax expense reflects the federal statutory tax rate and the weighted average state statutory tax rate for the states in which the Company operates stores.

Income tax expense of $ 68,537 for the 13 weeks ended October 30, 2021 represents an effective tax rate of 24.1 %, compared to $ 25,096 of tax expense representing an effective tax rate of 25.1 % for the 13 weeks ended October 31, 2020.

The lower effective tax rate is primarily due to favorable provision to tax return adjustments, driven by federal employment tax credits, compared to third quarter of fiscal 2020.

Income tax expense of $ 224,203 for the 39 weeks ended October 30, 2021 represents an effective tax rate of 24.4 %, compared to $ 2,935 of tax expense representing an effective tax rate of 40.3 % for the 39 weeks ended October 31, 2020.

The lower effective tax rate is primarily due to a benefit from the income tax accounting for share-based compensation and favorable provision to tax return adjustments, driven by federal employment tax credits, compared to fiscal 2020.

Income tax expense of $ 105,912 for the 13 weeks ended April 30, 2022 represents an effective tax rate of 24.2 %, compared to $ 74,677 of income tax expense representing an effective tax rate of 24.5 % for the 13 weeks ended May 1, 2021.

Net income per common share

1 unchanged sentence

13 Weeks Ended

39 Weeks Ended

(In thousands, except per share data)

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Net income per common share:

The denominator for diluted net income per common share for the 13 weeks ended October 30, 2021 and October 31, 2020 excludes 144 and 246 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 39 weeks ended October 30, 2021 and October 31, 2020 excludes 173 and 562 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 13 weeks ended April 30, 2022 and May 1, 2021 excludes 143 and 262 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

Outstanding performance-based restricted stock units are included in the computation of dilutive shares only to the extent that the underlying performance conditions are satisfied prior to the end of the reporting period or would be considered satisfied if the end of the reporting period were the end of the related contingency period and the results would be dilutive under the treasury stock method.

Share repurchase program

On March 14, 2019, the Board of Directors authorized a share repurchase program (the 2019 Share Repurchase Program) pursuant to which the Company could repurchase up to $ 875,000 of the Company’s common stock.

In March 2020, the Board of Directors authorized a share repurchase program (the 2020 Share Repurchase Program) pursuant to which the Company could repurchase up to $ 1,600,000 of the Company’s common stock.

The 2020 Share Repurchase Program authorization revoked the previously authorized but unused amount of $ 177,805 from the earlier share repurchase program.

The 2020 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.

On March 12, 2020, the Board of Directors authorized a share repurchase program (the 2020 Share Repurchase Program) pursuant to which the Company may repurchase up to $ 1,600,000 of the Company’s common stock.

The 2020 Share Repurchase Program authorization revoked the previously authorized but unused amount of $ 177,805 from the 2019 Share Repurchase Program.

In March 2022, the Board of Directors authorized a new share repurchase program (the 2022 Share Repurchase Program) pursuant to which the Company may repurchase up to $ 2,000,000 of the Company’s common stock.

The 2022 Share Repurchase Program revokes the previously authorized but unused amounts from the 2020 Share Repurchase Program.

The 2022 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements