−Removed: 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.
+Added: Ulta Beauty is the largest specialty beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products, and salon services.
Key aspects of our business include:
6 unchanged sentences
Our store design, fixtures, and open layout provide the flexibility to respond to consumer trends and changes in our merchandising strategy.
−Removed: We also offer a full-service salon in every store featuring hair, eyebrow and other beauty services.
+Added: We also offer beauty services in nearly every store, including a full-service hair salon and a Benefit TM Brow Bar.
+Added: In addition to our free-standing locations we have more than 350 Ulta Beauty at Target shop-in-shops which provide guests with a highly-curated, prestige beauty assortment in a unique and elevated presentation in 1,000 square feet of dedicated space within certain Target locations.
Leading Digital Experiences.
Through our website, Ulta.com, and our mobile applications, we offer guests convenient, interactive and personalized digital experiences.
−Removed: 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: 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 from distribution center, and same-day delivery, provide guests with value and convenience.
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.
2 unchanged sentences
In addition to unique membership benefits, members can redeem points for discounts on any product or service at Ulta Beauty.
−Removed: 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: With more than 95% of total sales coming from members, we are uniquely positioned with a deep understanding of our customers and their preferences, enabling us to personalize experiences, recommendations, and promotions through our Customer Relationship Management (CRM) platform and support our brand partners’ growth.
Great Guest Experiences.
6 unchanged sentences
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.
−Removed: We estimate that female beauty enthusiasts represent approximately 60% of shoppers and 75% of spend in the U.S.
−Removed: beauty category.
+Added: We estimate beauty enthusiasts represent approximately 65% of shoppers and account for more than 80% of beauty products and services spend in the U.S.
The following description of our business should be read in conjunction with the information contained in our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 and our Financial Statements and Supplementary Data included in Item 8 of this Annual Report on Form 10-K.
1 unchanged sentence
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 disruption resulting from the COVID-19 pandemic has had sustained effects on the category.
−Removed: 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.
−Removed: In addition, the operational and competitive landscape remains dynamic, and many costs are increasing, including supply chain and labor costs.
−Removed: 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: Our proprietary consumer research confirms engagement with the beauty category remains strong.
+Added: Despite the unprecedented disruption and sustaining effects resulting from the COVID-19 pandemic, consumers demonstrated their commitment to beauty as they resumed in-person shopping with enthusiasm, while also maintaining some of their online shopping behaviors, however the operational and competitive landscape remains dynamic, and persistent cost pressures, including supply chain and labor costs, remain a challenge.
+Added: Reflecting our understanding about how the consumer and beauty category are evolving, in 2021 we refreshed our strategic framework to position Ulta Beauty for continued success.
We are focused on six key strategic pillars designed to expand our market leadership and drive longer-term profitable growth.
4 unchanged sentences
maximizing growth in core categories, including makeup, skincare, haircare, and fragrance;
−Removed: 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: 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, the Wellness Shop, and SPARKED at Ulta Beauty;
differentiating our assortment through exclusive brands and products, including our private label, Ulta Beauty Collection;
8 unchanged sentences
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.
−Removed: 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: In addition, with more than 95% of total sales coming from our 40.2 million active Ultamate Rewards loyalty program members, we have unique insights about customer preferences and behavior.
Based on our proprietary insights, we know beauty enthusiasts have an emotional, personal, and deep connection with beauty.
1 unchanged sentence
To expand Ulta Beauty’s reach, relevancy, and guest engagement, we intend to amplify our brand purpose;
−Removed: build a creator and content ecosystem to deliver compelling, relevant beauty-tainment;
−Removed: leverage the power of live streaming and social selling;
+Added: build a creator and content ecosystem to deliver compelling, relevant beauty entertainment;
drive further innovation in our Ultamate Rewards program;
−Removed: and use our member data to increase personalization and drive conversion.
+Added: and use our member data to increase personalization, drive conversion, and support our brands.
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.
Drive operational excellence and optimization.
−Removed: Similar to other retailers, we are experiencing cost pressures from macroeconomic trends, including rising wage rates and higher transportation and shipping costs.
−Removed: In addition, we are managing ongoing headwinds from channel and category mix shifts.
+Added: Similar to other retailers, we are experiencing persistent cost pressures from macroeconomic trends, including rising wage rates and higher transportation and shipping costs.
+Added: In addition, we anticipate ongoing headwinds from channel and category mix shifts.
To mitigate the impact of these pressures and
7 unchanged sentences
We value and encourage collaboration and enterprise thinking, and we respect and listen to our associates to continually improve as a company.
−Removed: 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: We have an experienced leadership team and passionate associates committed to living our values while caring for our guests and for each other.
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.
2 unchanged sentences
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.
−Removed: 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 empower and inspire guests to make informed and sustainable product choices through our unique Conscious Beauty at Ulta Beauty ® platform, 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.
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.
7 unchanged sentences
We estimate that Ulta Beauty had less than 1% share of this industry.
−Removed: 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 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.
−Removed: 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.
−Removed: 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: We have full-service hair salons in substantially every store and operate brow bars in most of our stores, as well as makeup services through our salons.
+Added: In addition, we offer skin services in approximately 150 locations.
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.
2 unchanged sentences
Our retail channels
−Removed: 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: 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, digital platform, and partnerships.
Our member data suggests our guests prefer to transact in physical stores, where they can discover and interact with products and other beauty enthusiasts.
−Removed: In fiscal 2021, 75% of our loyalty members only shopped in Ulta Beauty stores.
+Added: In our fiscal year ended January, 28, 2023 (fiscal 2022), 76% of our loyalty members transacted with us solely in one of our stores.
Our retail stores are predominantly located in convenient, high-traffic locations such as power strip centers.
1 unchanged sentence
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.
−Removed: We offer a full range of beauty services in all of our stores, focusing on hair, skin, makeup, and brow services.
−Removed: 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.
−Removed: In addition, most of our stores offer brow services on the sales floor.
+Added: We offer a full range of beauty services in our stores, focusing on hair, makeup, brow, and skin services.
+Added: Our current Ulta Beauty store format includes an open and modern salon area, with most of our stores offering brow services on the salon floor.
+Added: In addition, stores offering skin services include a skin treatment room or dedicated skin treatment area on the sales floor.
The salon features a concierge desk, approximately five to ten stations, and a shampoo and hair color processing area.
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 ongoing COVID-19 restrictions, we operated at less-than-full capacity for salon and brow services for most of fiscal 2021.
−Removed: 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.
−Removed: We have plans to resume these services as soon as it is safe to do so.
−Removed: During fiscal 2021, 71% of new stores opened in existing shopping centers and 29% opened in new shopping centers.
−Removed: All new stores were opened in existing markets.
−Removed: As of January 29, 2022, we operated 1,308 stores across 50 states.
−Removed: 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:
+Added: In addition to opening new stores, we also remodeled and relocated certain stores, as shown in the following table:
Fiscal year ended
7 unchanged sentences
Stores relocated
−Removed: Stores refreshed
−Removed: 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.
+Added: Our real estate vision is to make Ulta Beauty accessible and convenient to more consumers across a variety of markets, and is a key driver of how we plan to expand our market share over time.
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.
−Removed: In addition, over the long term we expect to open up to 800 Ulta Beauty at Target shops.
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.
This insight-led, analytical approach to site selection has resulted in 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-
−Removed: opening expenses, and initial inventory, net of payables.
+Added: The average investment required to open a new Ulta Beauty store is approximately $1.7 million, which includes capital investments, net of landlord contributions, pre-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.
+Added: As part of our ongoing efforts to enhance and evolve our in-store experience to best engage our guests, we are introducing a new layout in our new and remodeled stores.
+Added: While our traditional layout is organized by price point, with prestige makeup and skincare on one side of the store and mass makeup and skincare on the other, our new layout brings together like categories with intuitive adjacencies to magnify our differentiated assortment.
+Added: In the new layout, categories flow from prestige to mass with delineated fixturing showcasing each segment.
+Added: In addition, we are adding several features including elevated gondolas to showcase key, iconic, and service brands and new Beauty Bars that offer our brow and makeup services as well as supporting in-store events and highlight beauty-in-action.
+Added: We believe this new layout better reflects how our guests shop and will simplify exploration and shopping.
Digital platform
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.
−Removed: In fiscal 2021, 17% of our loyalty members shopped in Ulta Beauty stores and through our digital platforms.
+Added: In fiscal 2022, 17% of our loyalty members shopped both in Ulta Beauty stores and through our digital platforms.
Our e-commerce platform has two key roles:
3 unchanged sentences
We continue to develop and add new website and mobile features and functionality, marketing programs, 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, with 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), and select retail stores, and through more efficient processes designed for e-commerce order fulfillment.
+Added: We intend to establish ourselves as a leading online beauty resource by providing our guests with a unique, 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, through more efficient processes designed for e-commerce order fulfillment, and starting in 2023, our first market fulfillment center.
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.
−Removed: In fiscal 2021, we launched same-day delivery for e-commerce orders in select markets.
+Added: In addition, we offer same-day delivery for e-commerce orders in select markets.
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 60 established and emerging prestige brands across a variety of categories.
−Removed: 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: Co-designed by Ulta Beauty and Target, the Ulta Beauty at Target shop is intended to reflect 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.
The shop is staffed by Target team members who are trained by Ulta Beauty to provide recommendations and answer product questions.
−Removed: Members in our loyalty program, Ultamate Rewards, can accumulate points (but not redeem) for purchases made in the Ulta Beauty at Target shop.
+Added: Members in our loyalty program, Ultamate Rewards, can earn points (but not redeem) for purchases made in the Ulta Beauty at Target shop.
Loyalty points can only be redeemed in Ulta Beauty stores, on Ulta.com or through our mobile applications.
−Removed: As of January 29, 2022, Ulta Beauty at Target was available in approximately 100 Target locations and on target.com.
−Removed: Over time, we believe Ulta Beauty at Target can be in up to 800 Target locations.
+Added: As of January 28, 2023, Ulta Beauty at Target was available in over 350 Target locations and on target.com.
+Added: Over time, we expect Ulta Beauty at Target to be in up to 800 Target locations, in addition to our freestanding Ulta Beauty stores.
Merchandising
2 unchanged sentences
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.
−Removed: We believe our broad selection of merchandise, from moderate-priced brands to higher-end prestige brands, creates a unique shopping experience for our guests.
+Added: We believe our broad selection of merchandise, from moderately-priced brands to higher-end prestige brands, creates a unique shopping experience for our guests.
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.
−Removed: 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.
+Added: Reflecting the 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.
4 unchanged sentences
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.
−Removed: During the past few years there has been a growing focus for consumers on self-care.
−Removed: Based on internal proprietary research, 65% of consumers see the beauty category as being significantly connected to wellness.
−Removed: In response to this trend, we launched The Wellness Shop in select stores and online that offers an assortment of products across five platforms:
−Removed: everyday care, supplements and ingestibles, relax and renew, down there care, and spa at home.
+Added: During the past few years consumers have increased their focus on self-care.
+Added: Based on internal proprietary research, approximately 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 six platforms:
+Added: everyday care, supplements and ingestibles, relax and renew, down there care, spa at home, and intimate wellness (online only).
We have a long tradition of being a diversity-forward company.
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.
−Removed: 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.
+Added: During fiscal 2022, we increased our assortment of Black-owned and Black-founded brands by 34% with the addition of 12 Black-owned and Black-founded brands, supporting our progress towards our commitment to dedicate 15% of our brand 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.
16 unchanged sentences
(Percentage of net sales)
−Removed: Cosmetics (1)
Haircare products and styling tools
1 unchanged sentence
Accessories and other
−Removed: (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.
18 unchanged sentences
We have strong, active relationships with our brand partners.
−Removed: 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.
+Added: Our top ten brand partners, such as L’Oréal and Estée Lauder Companies, among others, represented 56% and 54% of our total net sales in fiscal 2022 and our fiscal year ended January 29, 2022 (fiscal 2021), 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.
−Removed: All brand partners and respective subcontractors and their facilities are subject to Ulta Vendor Standards, as applicable, which set forth the ethical, legal, social, and workplace standards to meet in order to do business with Ulta Beauty.
+Added: All brand partners and respective subcontractors and their facilities are subject to the applicable Ulta Vendor Standards, which set forth the ethical, legal, social, and workplace standards to meet in order to do business with Ulta Beauty.
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.
2 unchanged sentences
We employ a multi-faceted marketing strategy to increase brand awareness, drive traffic to our stores, website, and mobile applications, acquire new loyalty program members, improve guest retention, increase frequency of shopping, and increase spend per member.
−Removed: We communicate with our guests and prospective guests through multiple vehicles, including print advertising, digital and social media, and television and radio.
+Added: We communicate with our guests and prospective guests through multiple vehicles, including print advertising, digital and social media, television and radio.
These vehicles highlight the breadth of our selection of prestige, mass and salon beauty products, new products and services, and special offers, as well as build our emotional connection with guests.
3 unchanged sentences
Our data demonstrates that loyalty members spend more per visit as compared to non-members.
−Removed: The 37 million active loyalty program members generated more than 95% of total net sales in fiscal 2021.
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.
8 unchanged sentences
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.
+Added: Retail media network
+Added: We have a deep understanding of our Ultamate Rewards loyalty members and their preferences.
+Added: This unique understanding combined with our ongoing investment in data analytics and CRM capabilities enables us to create personalized experiences and value for our guests and has unlocked new ways for us to support our brand partners and drive additional vendor income.
+Added: As we look to elevate our position as the premier beauty retailer, in May 2022 we launched our retail media network, UB Media, to transform the way our brand partners can connect with beauty enthusiasts.
+Added: UB Media offers brands a suite of media capabilities that aim to personalize guest engagement and drive the acquisition of 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-eight 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 28 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.
6 unchanged sentences
Salon services
−Removed: A typical salon is staffed with five to ten licensed salon professionals, including six or more stylists and one or two estheticians.
+Added: A typical salon is staffed with five to ten licensed salon professionals, including six or more stylists, and select stores have an esthetician.
Our most productive salons have a guest coordinator and an assistant manager.
2 unchanged sentences
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
−Removed: support e-commerce orders only.
+Added: We operate four distribution centers that support both stores and e-commerce demand, and two fast fulfillment centers that support e-commerce orders only.
In addition, 115 stores fulfill e-commerce orders as part of our ship-from-store program.
−Removed: 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.
+Added: Starting in fiscal 2023, we are introducing a fourth type of facility, a market fulfillment center, which will focus on our most productive products and support ecommerce sales and store demand, 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.
5 unchanged sentences
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.
−Removed: The following table sets forth the approximate number of associates employed as of:
+Added: The following table sets forth the approximate number of associates employed as of January 28, 2023:
Total associates
7 unchanged sentences
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 quarterly 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
+Added: 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.
+Added: In fiscal 2022, associates participated in our Inclusion in Action training to reinforce inclusivity and address unconscious bias.
The following table sets forth key metrics as of January 28, 2023:
4 unchanged sentences
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, 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.
+Added: Our human capital objectives and initiatives, including the risks related to compensation policies and practices, management development and leadership succession, DEI 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.
−Removed: We regularly conduct an associate engagement survey to take the pulse of associates’ satisfaction with their roles, their leaders, and company as a whole.
−Removed: 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.
+Added: We regularly conduct an associate engagement survey to take the pulse of associates’ satisfaction with their roles, their leaders, and the Company as a whole, which our executive team reviews and monitors.
Our leadership team also hosts roundtable sessions to dive deeper on specific topics as well as additional forums, including department town halls, store and distribution center visits, and other small group gatherings.
5 unchanged sentences
The majority of our promotions are internal.
−Removed: As we continue to promote and develop from within, we are building a bench of associates and leaders who know our company inside and out.
+Added: As we continue to promote and develop from within, we are building a bench of associates and leaders who know our business inside and out and support our values-driven culture.
All of our associates participate in an interactive new-hire orientation through which each associate becomes acquainted with Ulta Beauty’s mission, vision, and values.
14 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, financial wellness planning and guidance, and health apps and educational resources for soon-to-be parents.
−Removed: Since 2017, the Ulta Beauty Charitable Foundation (UBCF) has supported the Associate Relief Program to assist associates facing unforeseen financial hardship.
−Removed: The Associate Relief Program provides short-term financial support to pay off medical bills or support temporary housing.
+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 mobile applications, financial wellness planning and guidance, and health mobile applications and educational resources for soon-to-be parents.
+Added: The Ulta Beauty Charitable Foundation (UBCF) supports the Associate Relief Program to assist associates facing unforeseen financial hardship.
+Added: The Associate Relief Program provides short-term financial support to reimburse medical bills or support temporary housing.
Sustainability
10 unchanged sentences
Our Board of Directors is actively engaged in oversight of cybersecurity, and it is part of the charter of our Audit Committee.
−Removed: Our Chief Executive Officer keeps the Board informed on cybersecurity and privacy matters throughout the year.
+Added: Our Chief Information Officer and Chief Executive Officer keep the Board informed on cybersecurity and privacy matters throughout the year.
Our Security Operations Center constantly and proactively monitors our network and application landscape for threats and anomalies.
12 unchanged sentences
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).
+Added: The majority of our trademark registrations contain the ULTA mark, including Ulta Beauty and two related designs, Ulta.com and Ulta Salon, Cosmetics &
+Added: Fragrance (and design).
We maintain our marks and monitor filing deadlines for renewal and continued validity.
6 unchanged sentences
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, 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: The products we sell, such as cosmetics (including products with cannabidiol), 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.
Food and Drug Administration (FDA), the U.S.
2 unchanged sentences
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, manufacturing, and holding requirements.
+Added: Cosmetics, OTC drugs, medical devices, and dietary supplements have specific regulatory requirements, including but not limited to ingredient, labeling, manufacturing, and holding requirements.
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.
+Added: Finally, products such as styling tools (e.g., blow dryers and curling irons) are regulated by the CPSC, which has strict requirements including the requirement to report certain product defects.
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.
2 unchanged sentences
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.
+Added: Our services operations are subject to state board regulations and state licensing requirements.
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).
9 unchanged sentences
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
−Removed: 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 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
14 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: 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.
+Added: Any significant interruption in the operations of our distribution and fast fulfillment 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.
We distribute products to our stores without supplementing such deliveries with direct-to-store arrangements from vendors or wholesalers.
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, labor disagreements, inventory availability, or shipping and transportation problems, could drastically reduce our ability to
−Removed: 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: 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 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.
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.
6 unchanged sentences
Offering products through our internet channel or through our mobile applications could also cause some of our current or potential vendors to consider competing internet or mobile offerings of their products either on their own or through competing distributors.
−Removed: Additionally, omnichannel retailing is rapidly evolving, and we must keep pace with changing guest expectations and new developments by our competitors.
+Added: Additionally, omnichannel retailing continues to rapidly evolve, and we must keep pace with changing guest expectations and new developments by our competitors.
As we continue to grow our e-commerce platform, the impact of attracting existing rather than new guests, conflicts between product offerings online or through our mobile applications and through our stores, and opening up our channels to increased competition from pure-play e-commerce companies could have a material adverse effect on our business, financial condition, profitability, and cash flows.
3 unchanged sentences
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, 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.
+Added: Any event causing a disruption of manufacturing or imports from such foreign countries, including the imposition of import restrictions, geopolitical 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.
Our business is also subject to a variety of other risks generally associated with sourcing goods from abroad, such as political instability, disruption of imports by labor disputes, and local business practices.
−Removed: Our sourcing operations may also be hurt by health concerns regarding infectious diseases in countries in which our merchandise is produced (such as COVID-19), adverse weather conditions or natural disasters that may occur overseas, or acts of war or terrorism in the United States or worldwide, to the extent these acts affect the production, shipment, or receipt of merchandise.
+Added: Our sourcing operations may also be hurt by health
+Added: concerns regarding infectious diseases in countries in which our merchandise is produced, adverse weather conditions or natural disasters that may occur overseas, or acts of war or terrorism, to the extent these acts affect the production, shipment, or receipt of merchandise.
Our future operations and performance will be subject to these factors, and these factors could have a material adverse effect on our business, financial condition, profitability, and cash flows or may require us to modify our current business practices and incur increased costs.
−Removed: Diversion of exclusive salon products, or a decision by manufacturers of exclusive salon products to utilize other distribution channels, could negatively impact our revenue from the sale of such products, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: The retail products that we sell in our salons are meant to be sold exclusively by professional salons and authorized professional retail outlets.
−Removed: However, incidents of product diversion occur, which involve the selling of salon exclusive haircare products to unauthorized channels such as drug stores, grocery stores, or mass merchandisers.
−Removed: Diversion could result in adverse publicity that harms the commercial prospects of our products (if diverted products are old, tainted, or damaged), as well as lower product revenues should consumers choose to purchase diverted product from these channels rather than purchasing from one of our salons.
−Removed: 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 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 only).
−Removed: 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 expected future growth and to maintain the efficient operation of our business, it is likely additional distribution facilities will be added in the future.
−Removed: 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: We rely on our good relationships with brand partners to purchase prestige, mass, and salon beauty products on reasonable terms, and to offer certain brands or products that are permanently or temporarily exclusive to us.
+Added: If these relationships were to be impaired, or if certain brand partners were to change their distribution model or are unable to supply sufficient merchandise to keep pace with our growth plans, we may not be able to obtain a sufficient selection or volume of merchandise on reasonable terms, and we may not be able to respond promptly to changing trends in beauty products, either of which could have a material adverse effect on our competitive position, business, financial condition, profitability, and cash flows.
+Added: We have no long-term supply agreements with brand partners and, therefore, our success depends on maintaining good relationships with our brand partners.
+Added: Our business depends to a significant extent on the willingness and ability of our brand partners to supply us with a sufficient selection and volume of products to stock our stores.
+Added: Some of our prestige brand partners may not have the capacity to supply us with sufficient merchandise to keep pace with our growth plans.
+Added: We also have strategic partnerships with certain core brands, which have allowed us to benefit from the growing popularity of such brands.
+Added: Any of our other core brands could in the future decide to scale back or end its partnership with us and strengthen its relationship with our competitors, which could negatively impact the revenue we earn from the sale of such products.
+Added: If we fail to maintain strong relationships with our existing brand partners, or if we fail to continue acquiring and strengthening relationships with additional brand partners of beauty products, our ability to obtain a sufficient amount and variety of merchandise on reasonable terms may be limited, which could have a negative impact on our competitive position.
+Added: During fiscal 2022 and fiscal 2021, merchandise supplied to Ulta Beauty by our top ten brand partners accounted for approximately 56% and 54% of our net sales, respectively.
+Added: There continues to be vendor consolidation within the beauty products industry.
+Added: The loss of or a reduction in the amount of merchandise made available to us by any one of these key vendors, or by any of our other brand partners, could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: We also offer products that are permanently exclusive to us and offer a number of brands and products that are exclusive to us for a limited period of time or are offered in advance of our competitors.
+Added: If our brand partners ceased granting us permanent or temporary exclusive rights our net sales could be negatively impacted, which could have a material adverse effect on our business, financial condition and profitability.
+Added: If we are unable to protect against inventory shrink , our results of operations and financial condition could be adversely affected.
+Added: Our business depends on our ability to effectively manage our inventory.
+Added: Risk of inventory loss (also called shrink) is inherent in the retail business.
+Added: We have historically experienced inventory shrink due to damage, theft (including from organized retail crime), and other causes.
+Added: While some level of inventory shrink is unavoidable, we continue to experience elevated levels of inventory shrink relative to historical levels, which have adversely affected, and could continue to adversely affect, our results of operations and financial condition.
+Added: To protect against rising inventory shrink, we have taken, and may continue to take, certain operational and strategic actions that could adversely affect our reputation, guest experience, and results of operations.
Our 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.
11 unchanged sentences
● actions by our existing or new competitors;
−Removed: ● hurricanes, tornadoes, wildfires, earthquakes, mudslides, other natural disasters, epidemics or pandemics, and geo-political events.
+Added: ● hurricanes, tornadoes, wildfires, earthquakes, mudslides, other natural disasters, epidemics or pandemics, and geopolitical events.
Accordingly, our results for any one fiscal quarter are not necessarily indicative of the results to be expected for any other quarter, and comparable sales for any particular future period may decrease.
In that event, the price of our common stock may decline.
−Removed: We rely on our good relationships with brand partners to purchase prestige, mass, and salon beauty products on reasonable terms.
−Removed: If these relationships were to be impaired, or if certain brand partners were to change their distribution model, or are unable to supply sufficient merchandise to keep pace with our growth plans, we may not be able to obtain a sufficient selection or volume of merchandise on reasonable terms, and we may not be able to respond promptly to changing trends in beauty products, either of which could have a material adverse effect on our competitive position, business, financial condition, profitability, and cash flows.
−Removed: We have no long-term supply agreements with brand partners and, therefore, our success depends on maintaining good relationships with our brand partners.
−Removed: Our business depends to a significant extent on the willingness and ability of our brand partners to supply us with a sufficient selection and volume of products to stock our stores.
−Removed: Some of our prestige brand partners may not have the capacity to supply us with sufficient merchandise to keep pace with our growth plans.
−Removed: We also have strategic partnerships with certain core brands, which have allowed us to benefit from the growing popularity of such brands.
−Removed: Any of our other core brands could in the future decide to scale back or end its partnership with us and strengthen its relationship with our competitors, which could negatively impact the revenue we earn from the sale of such products.
−Removed: If we fail to maintain strong relationships with our existing brand partners, or if we fail to continue acquiring and strengthening relationships with additional brand partners of beauty products, our ability to obtain a sufficient amount and variety of merchandise on reasonable terms may be limited, which could have a negative impact on our competitive position.
−Removed: During fiscal 2021 and fiscal 2020, merchandise supplied to Ulta Beauty by our top ten brand partners accounted for approximately 54% and 56% of our net sales, respectively.
−Removed: There continues to be vendor consolidation within the beauty products industry.
−Removed: The loss of or a reduction in the amount of merchandise made available to us by any one of these key vendors, or by any of our other brand partners, could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+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 future growth, 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).
+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.
+Added: 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: If our marketing, advertising and promotional programs are unsuccessful, our results of operations and financial condition could be adversely affected.
+Added: Customer traffic and demand for our merchandise are influenced by our advertising, marketing and promotional activities.
+Added: We use marketing, advertising and promotional programs to attract customers through various media, including social media, websites, mobile applications, email, and print.
+Added: Our future growth and profitability will depend in part upon the effectiveness and efficiency of our advertising and marketing programs.
+Added: Further, disruption to certain media channels could have a material adverse effect on our results of operations and financial condition.
Use of social media may adversely impact our reputation.
5 unchanged sentences
For example, we maintain Facebook, Twitter, Instagram, TikTok, and Pinterest accounts.
−Removed: 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.
+Added: As laws and regulations 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.
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.
2 unchanged sentences
If we were to lose the benefit of the experience, efforts, and abilities of key executive personnel, it could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: 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 personnel and store and distribution center associates.
+Added: Furthermore, our ability to manage our retail expansion requires us to continue to train, motivate, and manage our associates.
+Added: We also need to attract, motivate, and retain additional qualified executive, managerial, and merchandising personnel and store and distribution center associates.
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.
−Removed: 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.
+Added: In addition, fluctuations in the cost of labor, including as a result of inflationary pressures on wages, may negatively impact our profitability and cash flows.
Our secured revolving credit facility contains certain restrictive covenants that could limit our operational flexibility, including our ability to open stores.
1 unchanged sentence
Substantially all of our assets are pledged as collateral for outstanding borrowings under the agreement.
−Removed: Outstanding borrowings bear interest 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 1.25% and the unused line fee is 0.20% per annum.
−Removed: The credit facility agreement contains usual and customary restrictive covenants relating to our management and the operation of our business.
−Removed: These covenants, among other things, limit our ability to grant liens on our assets, incur additional indebtedness, pay cash dividends and redeem our stock, enter into transactions with affiliates, and merge or consolidate with another entity.
+Added: The credit facility agreement contains usual and customary restrictive covenants that, among other things, limit our ability to incur additional indebtedness, pay cash dividends and repurchase our stock, and merge or consolidate with another entity, and requires us to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 during such periods when availability under the agreement falls below a specified threshold.
These covenants could restrict our operational flexibility and any failure to comply with these covenants or our payment obligations would limit our ability to borrow under the credit facility and, in certain circumstances, may allow the lenders thereunder to require repayment.
Economic, Market and Other External Risks
+Added: Macroeconomic conditions could have a material adverse impact on our business, financial condition, profitability, and cash flows.
+Added: Macroeconomic conditions, including inflation, rising interest rates and recessionary concerns, as well as ongoing labor cost pressures, transportation and shipping cost pressures, and the COVID-19 pandemic, have had, and may continue to have, a negative impact on our business, financial condition, profitability, and cash flows.
+Added: For instance, we were negatively impacted in fiscal 2022 by persistent cost pressures, including supply chain and labor costs.
+Added: We expect inflationary cost pressures to continue in 2023 and we continue to closely monitor macroeconomic conditions, including customer behavior, and the impact of these factors on customer demand.
+Added: Continuing or worsening inflation, recessionary concerns and/or supply chain and labor challenges, as well as the current turmoil in the banking industry, may have a material adverse impact on our business, financial condition, profitability, and/or cash flows.
+Added: Although we do not have any operations outside the United States, geopolitical events, including the ongoing conflict between Russia and Ukraine and the related economic sanctions by Western governments on Russia, has caused greater uncertainty in the global economy and exacerbated the inflation situation.
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.
−Removed: We appeal to a wide demographic consumer profile and offer an extensive selection of beauty products sold directly to retail consumers and premium salon services.
+Added: We appeal to a wide demographic consumer profile and offer an extensive selection of beauty products sold directly to retail
+Added: consumers and premium salon services.
Uncertainty in the economy could adversely impact consumer purchases of discretionary items across all of our product categories, including prestige beauty products and premium salon services.
Factors that could affect consumers’ willingness to make such discretionary purchases include:
−Removed: 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.
−Removed: 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.
+Added: general business conditions, inflationary pressures, recessionary concerns, 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 and geopolitical events.
+Added: In the event of a prolonged period of inflation, an economic downturn or a recession, consumer spending habits could be adversely affected, and we could experience lower than expected net sales.
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.
2 unchanged sentences
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.
−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: 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.
−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 in fiscal 2020.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−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, 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 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.
8 unchanged sentences
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.
−Removed: 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.
+Added: 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, 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
−Removed: promotions, or transferring product to other stores to reduce excess inventory, which would further decrease our gross profits and net income.
−Removed: 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, inflationary pressures and other unpredictable factors.
−Removed: As a retailer engaged in an active building and remodeling program, we are particularly vulnerable to increases in construction and remodeling costs.
−Removed: As a result, increases in the demand for, or the price of, raw materials could have a material adverse effect on our business, financial condition, profitability, and cash flows.
−Removed: Our stock repurchase programs could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.
+Added: 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: The COVID-19 pandemic continues to negatively affect our business, financial condition, profitability, cash flows and supply chain.
+Added: Since the first quarter of 2020, there has been a worldwide impact from the COVID 19 pandemic.
+Added: Government authorities have taken measures to try to contain the virus, such as limiting or closing business activities, transportation and person-to-person interactions, resulting in the temporary closing of all of our stores across the U.S.
+Added: on March 19, 2020.
+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 our in-store services, the potential of temporary restrictions in operating hours, in-store services or reclosing of certain stores in the future is possible.
+Added: Global trade conditions and customer trends that originated during the pandemic continue to persist and may also have a long-lasting adverse impact on us independently of the progress on the pandemic.
+Added: For example, the COVID-19 pandemic and its various impacts changed consumer behavior and consumption of beauty products, at least temporarily, due to the closures of offices, retail stores and other businesses and the significant decline in social gatherings, and also resulted in inflationary pressures on wages, transportation and shipping costs, and wholesale costs, recessionary concerns and other evolving macroeconomic conditions.
+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 and cannot be predicted.
+Added: Future epidemics, pandemics, natural disasters, or other catastrophes or crises could 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 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 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 in the future, it could have a material adverse effect on our business, financial condition, profitability, and cash flows or may require us to incur increased costs.
+Added: Our stock repurchase programs could affect the price of our common stock and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.
We may have in place from time to time, a stock repurchase program.
Any such stock repurchase program adopted will not obligate the Company to repurchase any dollar amount or number of shares of common stock and may be suspended or discontinued at any time, which could cause the market price of our common stock to decline.
−Removed: The timing and actual number of shares repurchased under any such stock repurchase program depends on a variety of factors including the timing of open trading windows, price, corporate and regulatory requirements, and other market conditions.
−Removed: We may affect repurchases under any stock repurchase program from time to time in the open market, in privately negotiated transactions or otherwise, including accelerated stock repurchase arrangements.
−Removed: Repurchases pursuant to any such stock repurchase program could affect our stock price and increase its volatility.
−Removed: The existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
+Added: Repurchases pursuant to any such stock repurchase program could affect our stock price and the existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program.
There can be no assurance that any stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of common stock.
−Removed: Although our stock repurchase program is intended to enhance stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.
Climate change might adversely impact our business operations and/or our supply chain.
2 unchanged sentences
These weather events could also lead to an increased rate of temporary store closures and reduced customer traffic at our stores.
−Removed: 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: 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
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.
13 unchanged sentences
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.
−Removed: 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: We also are expanding and upgrading our information systems (including replacing our enterprise resource planning platform through Project SOAR) to support historical and expected future growth.
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.
2 unchanged sentences
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.
−Removed: 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.
+Added: As the importance of our website, mobile applications, and e-commerce operations to our business continues to grow, we are increasingly vulnerable to
+Added: downtime and other technical failures.
Our failure to successfully respond to these risks could reduce e-commerce sales and damage our brand’s reputation.
3 unchanged sentences
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.
−Removed: In addition, our failure to comply with applicable laws and regulations or other obligations to which we may be subject relating to
−Removed: 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.
+Added: In addition, our failure to comply with applicable laws and regulations or other obligations to which we may be subject relating to 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.
From time to time, we are subject to litigation, including potential class action and single-plaintiff litigation and other legal or regulatory proceedings or claims in the ordinary course of our business operations regarding, but not limited to, employment matters, consumer claims, security of consumer and employee personal information, contractual relations with suppliers, marketing and infringement of trademarks, and other intellectual property rights.
−Removed: Litigation to defend ourselves against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could absorb significant management time, result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: Litigation to defend ourselves against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could absorb significant management time and/or result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition, profitability, and cash flows.
We establish accruals for potential liability arising from litigation and other legal or regulatory proceedings or claims when potential liability is probable and the amount of the loss can be reasonably estimated based on currently available information.
10 unchanged sentences
The inability to enter into licenses could harm our business significantly.
−Removed: If our manufacturers are unable to produce products manufactured uniquely for Ulta Beauty, including Ulta Beauty branded products and gifts with purchase and other promotional products, consistent with applicable regulatory requirements, we could suffer lost sales and be required to take costly corrective action, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
+Added: If our manufacturers are unable to produce products manufactured uniquely for Ulta Beauty, including the Ulta Beauty Collection and Ulta Beauty branded gifts with purchase and other promotional products, consistent with applicable regulatory requirements, we could suffer lost sales and be required to take costly corrective action, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.
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, content, labeling and/or quality and may not continue to produce products that are consistent with applicable regulatory requirements.
+Added: The FDA does not currently have a pre-market approval system for cosmetics, but requires safety and efficacy substantiation.
If we or our third-party manufacturers fail to comply with applicable regulatory requirements, we could be required to take costly corrective action.
In addition, sanctions under various laws may include seizure of products, injunctions against future shipment of products, restitution and disgorgement of profits, operating restrictions, and criminal prosecution.
−Removed: The FDA does not have a pre-market approval system for cosmetics, and we believe we are permitted to market our cosmetics and have them manufactured without submitting safety or efficacy data to the FDA.
−Removed: 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
−Removed: 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 branded 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.
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.
17 unchanged sentences
Misconduct by associates, independent contractors, or agents could include inadvertent or intentional failures to comply with our policies and procedures, the laws and regulations to which we are subject, and/or ethical, social, product, labor, and environmental standards.
−Removed: Our current and former associates or independent contractors may also become subject to allegations of sexual harassment, racial and gender discrimination, or other similar misconduct, which, regardless or the ultimate outcome, may result in adverse publicity that could significantly harm our brand, reputation, and operations.
+Added: Our current and former associates or independent contractors may also become subject to allegations of sexual harassment, racial and gender discrimination, or other similar misconduct, which, regardless of the ultimate outcome, may result in adverse publicity that could significantly harm our brand, reputation, and operations.
Associate misconduct could also involve improper use of information obtained in the course of the associate’s prior or current employment, which could result in legal or regulatory action and harm to our reputation.
22 unchanged sentences
● prohibiting our stockholders from calling a special meeting of stockholders;
−Removed: ● prohibiting our stockholders from making certain changes to our certificate of incorporation or bylaws except with a two-thirds majority stockholder approval;
● requiring advance notice for raising business matters or nominating directors at stockholders’ meetings.
3 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.