What changed in this filing

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Item 1. Financial Statements

2022-08-25 compared with 2022-05-26 · 58 added, 30 removed, 235 unchanged (27% of the section changed)

32 unchanged sentences

51,332 , 52,311 , and 54,446 shares outstanding;

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

at July 30, 2022 (unaudited), January 29, 2022, and July 31, 2021 (unaudited), respectively

Treasury stock-common, at cost

7 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(In thousands, except per share data)

3 unchanged sentences

Operating income

Interest expense, net

Interest expense (income), net

Income before income taxes

43 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Stockholders'

(In thousands)

Balance – January 29, 2022

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares

Balance – April 30, 2022

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares

Balance – July 30, 2022

See accompanying notes to consolidated financial statements.

Ulta Beauty, Inc.

Consolidated Statements of Stockholders’ Equity

Comprehensive

9 unchanged sentences

Balance – May 1, 2021

Balance – January 29, 2022

Stock-based compensation

2 unchanged sentences

Repurchase of common shares

Balance – April 30, 2022

Balance – July 31, 2021

See accompanying notes to consolidated financial statements.

8 unchanged sentences

and its consolidated subsidiaries.

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

As of July 30, 2022, the Company operated 1,325 stores across 50 states, as shown in the table below.

New Hampshire

10 unchanged sentences

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 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.

The results for the 13 and 26 weeks ended July 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 first quarter in fiscal 2022 and 2021 ended on April 30, 2022 and May 1, 2021, respectively.

The second quarter in fiscal 2022 and 2021 ended on July 30, 2022 and July 31, 2021, respectively.

Use of estimates

9 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(Percentage of net sales)

3 unchanged sentences

Deferred revenue

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.

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.

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 weeks ended April 30, 2022 and May 1, 2021:

The following table provides a summary of the changes included in deferred revenue during the 13 and 26 weeks ended July 30, 2022 and July 31, 2021:

13 Weeks Ended

26 Weeks Ended

(In thousands)

5 unchanged sentences

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

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

Other amounts included in deferred revenue were $ 10,658 and $ 9,235 at July 30, 2022 and July 31, 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 April 30, 2022, January 29, 2022, and May 1, 2021.

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

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at July 30, 2022, January 29, 2022, and July 31, 2021.

No additional goodwill was recognized during the 13 and 26 weeks ended July 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.

9 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(In thousands)

6 unchanged sentences

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

(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.

(1) Excludes $ 13,363 and $ 16,923 related to cash received for tenant incentives for the 26 weeks ended July 30, 2022 and July 31, 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 Company’s 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 consolidated financial position, results of operations or cash flows.

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

4 unchanged sentences

and the other lenders party thereto.

The Loan Agreement matures on March 11, 2025, provides maximum revolving loans equal to the lesser of $ 1,000,000 or a percentage of eligible owned inventory and eligible owned receivables (which borrowing base may, at the election of the Company and satisfaction of certain conditions, include a percentage of qualified cash), contains a $ 50,000 subfacility for letters of credit and allows the Company to increase the revolving facility by an additional $ 100,000 , subject to the consent by each lender and other conditions.

The Loan Agreement matures on March 11, 2025, provides maximum revolving loans equal to the lesser of $ 1,000,000 or a percentage of eligible owned

inventory and eligible owned receivables (which borrowing base may, at the election of the Company and satisfaction of certain conditions, include a percentage of qualified cash), contains a $ 50,000 subfacility for letters of credit and allows the Company to increase the revolving facility by an additional $ 100,000 , subject to the consent by each lender and other conditions.

The Loan Agreement contains a requirement to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 during such periods when availability under the Loan Agreement falls below a specified threshold.

1 unchanged sentence

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 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.

As of July 30, 2022, January 29, 2022, and July 31, 2021, there were no borrowings outstanding under the credit facility.

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

Fair value measurements

4 unchanged sentences

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

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.

As of July 30, 2022, January 29, 2022, and July 31, 2021, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 36,071 , $ 40,839 , and $ 38,077 , 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.

14 unchanged sentences

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.

The Company granted 48 and 61 stock options during the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

Stock-based compensation expense for stock options was $ 2,164 and $ 3,101 for the 13 weeks ended July 30, 2022 and July 31, 2021, respectively.

Stock-based compensation expense for stock options was $ 4,506 and $ 5,998 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

The weighted-average grant date fair value of these stock options was $ 149.14 and $ 109.72 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

At July 30, 2022, there was approximately $ 13,822 of unrecognized stock-based compensation expense related to unvested stock options.

There were 56 and 58 restricted stock units issued during the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

Stock-based compensation expense for restricted stock units was $ 4,987 and $ 5,149 for the 13 weeks ended July 30, 2022 and July 31, 2021, respectively.

Stock-based compensation expense for restricted stock units was $ 9,439 and $ 9,984 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

At July 30, 2022, there was approximately $ 32,535 of unrecognized stock-based compensation expense related to restricted stock units.

There were 37 and 46 performance-based restricted stock units issued during the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 5,368 and $ 1,869 for the 13 weeks ended July 30, 2022 and July 31, 2021, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 8,930 and $ 3,115 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

At July 30, 2022, there was approximately $ 29,861 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 $ 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.

Income tax expense of $ 95,859 for the 13 weeks ended July 30, 2022 represents an effective tax rate of 24.5 %, compared to $ 80,989 of tax expense representing an effective tax rate of 24.4 % for the 13 weeks ended July 31, 2021.

Income tax expense of $ 201,771 for the 26 weeks ended July 30, 2022 represents an effective tax rate of 24.3 %, compared to $ 155,666 of tax expense representing an effective tax rate of 24.4 % for the 26 weeks ended July 31, 2021.

Net income per common share

1 unchanged sentence

13 Weeks Ended

26 Weeks Ended

(In thousands, except per share data)

3 unchanged sentences

Net income per common share:

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.

The denominator for diluted net income per common share for the 13 weeks ended July 30, 2022 and July 31, 2021 excludes 67 and 152 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 26 weeks ended July 30, 2022 and July 31, 2021 excludes

125 and 207 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.

12 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