What changed in this filing

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Item 1. Financial Statements

2024-08-29 compared with 2024-05-30 · 54 added, 31 removed, 258 unchanged (25% of the section changed)

32 unchanged sentences

47,300 , 48,324 , and 49,341 shares outstanding;

at May 4, 2024 (unaudited), February 3, 2024, and April 29, 2023 (unaudited), respectively

at August 3, 2024 (unaudited), February 3, 2024, and July 29, 2023 (unaudited), respectively

Treasury stock-common, at cost

7 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(In thousands, except per share data)

50 unchanged sentences

(In thousands)

Balance – February 3, 2024

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares, including excise tax

Balance – May 4, 2024

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares, including excise tax

Balance – August 3, 2024

See accompanying notes to consolidated financial statements.

Ulta Beauty, Inc.

Consolidated Statements of Stockholders’ Equity

Stockholders'

(In thousands)

Balance – January 28, 2023

4 unchanged sentences

Balance – April 29, 2023

Balance – February 3, 2024

Stock-based compensation

2 unchanged sentences

Repurchase of common shares, including excise tax

Balance – May 4, 2024

Balance – July 29, 2023

See accompanying notes to consolidated financial statements.

8 unchanged sentences

and its consolidated subsidiaries.

As of May 4, 2024, the Company operated 1,395 stores across 50 states, as shown in the table below.

As of August 3, 2024, the Company operated 1,411 stores across 50 states, as shown in the table below.

New Hampshire

10 unchanged sentences

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

The results for the 13 weeks ended May 4, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending February 1, 2025, or for any other future interim period or for any future year.

The results for the 13 and 26 weeks ended August 3, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending February 1, 2025, or for any other future interim period or for any future year.

These unaudited interim consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended February 3, 2024.

5 unchanged sentences

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

The first quarter in fiscal 2024 and 2023 ended on May 4, 2024 and April 29, 2023, respectively.

The second quarter in fiscal 2024 and 2023 ended on August 3, 2024 and July 29, 2023, respectively.

Use of estimates

22 unchanged sentences

The Company is currently evaluating the impact of adopting this ASU on related disclosures.

SEC Climate-Related Disclosures

Securities and Exchange Commission (SEC) Climate-Related Disclosures

In March 2024, the SEC adopted rules intended to enhance and standardize climate-related disclosures in registration statements and annual reports.

1 unchanged sentence

The rules also require disclosure of material greenhouse gas emissions and any material climate-related targets and goals.

The new rules will be effective for annual reporting periods beginning in fiscal year 2025, except for the greenhouse gas emissions disclosures which will be effective for annual reporting periods beginning in fiscal year 2026, however the new rules have been stayed by the federal courts and, as a result, the SEC has indefinitely delayed their effectiveness.

The Company is currently evaluating the impact of these new rules.

4 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(Percentage of net sales)

3 unchanged sentences

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

The following table provides a summary of the changes included in deferred revenue during the 13 weeks ended May 4, 2024 and April 29, 2023:

The following table provides a summary of the changes included in deferred revenue during the 13 and 26 weeks ended August 3, 2024 and July 29, 2023:

13 Weeks Ended

26 Weeks Ended

(In thousands)

5 unchanged sentences

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

Other amounts included in deferred revenue were $ 7,283 and $ 7,094 at May 4, 2024 and April 29, 2023, respectively.

Other amounts included in deferred revenue were $ 7,170 and $ 8,186 at August 3, 2024 and July 29, 2023, respectively.

Goodwill and other intangible assets

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at May 4, 2024, February 3, 2024, and April 29, 2023.

No additional goodwill was recognized during the 13 weeks ended May 4, 2024.

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at August 3, 2024, February 3, 2024, and July 29, 2023.

No additional goodwill was recognized during the 13 and 26 weeks ended August 3, 2024.

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

9 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(In thousands)

6 unchanged sentences

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

(1) Excludes $ 7,791 and $ 9,593 related to cash received for tenant incentives for the 13 weeks ended May 4, 2024 and April 29, 2023, respectively.

(1) Excludes $ 19,882 and $ 17,450 related to cash received for tenant incentives for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

Commitments and contingencies

11 unchanged sentences

Outstanding borrowings bear interest, at the Company’s election, at either a base rate plus a margin of 0.5 % to 1.0 % or the Term Secured Overnight Financing Rate plus a margin of 1.5 % to 2.0 %, and a credit spread adjustment of 0.10 %, with such margins based on the Company’s borrowing availability, and the unused line fee is 0.25 % to 0.375 % per annum.

As of May 4, 2024, February 3, 2024, and April 29, 2023, there were no borrowings outstanding under the credit facility.

As of May 4, 2024, the Company was in compliance with all terms and covenants of the Loan Agreement.

As of August 3, 2024, February 3, 2024, and July 29, 2023, there were no borrowings outstanding under the credit facility.

As of August 3, 2024, the Company was in compliance with all terms and covenants of the Loan Agreement.

Fair value measurements

4 unchanged sentences

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

As of May 4, 2024, February 3, 2024, and April 29, 2023, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 47,849 , $ 42,653 , and $ 40,374 , respectively.

As of August 3, 2024 , February 3, 2024 , and July 29, 2023 , there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 48,720 , $ 42,653 , and $ 42,529 , respectively.

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

14 unchanged sentences

The Company does not currently pay a regular dividend.

The Company granted 56 and 41 stock options during the 13 weeks ended May 4, 2024 and April 29, 2023, respectively.

Stock-based compensation expense for stock options was $ 1,680 and $ 1,470 for the 13 weeks ended May 4, 2024 and April 29, 2023, respectively.

The weighted-average grant date fair value of these stock options was $ 157.66 and $ 200.67 for the 13 weeks ended May 4, 2024 and April 29, 2023, respectively.

At May 4, 2024, there was approximately $ 16,803 of unrecognized stock-based compensation expense related to unvested stock options.

There were 44 and 38 restricted stock units issued during the 13 weeks ended May 4, 2024 and April 29, 2023, respectively.

Stock-based compensation expense for restricted stock units was $ 4,388 and $ 4,359 for the 13 weeks ended May 4, 2024 and April 29, 2023, respectively.

At May 4, 2024, there was approximately $ 43,539 of unrecognized stock-based compensation expense related to restricted stock units.

There were 71 and 32 performance-based restricted stock units issued during the 13 weeks ended May 4, 2024 and April 29, 2023.

Stock-based compensation expense for performance-based restricted stock units was $ 4,014 and $ 3,892 for the 13 weeks ended May 4, 2024 and April 29, 2023, respectively.

At May 4, 2024, there was approximately $ 34,998 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

The Company granted 56 and 42 stock options during the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

Stock-based compensation expense for stock options was $ 1,506 and $ 1,749 for the 13 weeks ended August 3, 2024 and July 29, 2023, respectively.

Stock-based compensation expense for stock options was $ 3,185 and $ 3,219 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

The weighted-average grant date fair value of these stock options was $ 157.66 and $ 199.15 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

At August 3, 2024, there was approximately $ 15,252 of unrecognized stock-based compensation expense related to unvested stock options.

There were 51 and 45 restricted stock units issued during the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

Stock-based compensation expense for restricted stock units was $ 4,997 and $ 4,934 for the 13 weeks ended August 3, 2024 and July 29, 2023, respectively.

Stock-based compensation expense for restricted stock units was $ 9,385 and $ 9,293 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

At August 3, 2024, there was approximately $ 39,738 of unrecognized stock-based compensation expense related to restricted stock units.

There were 71 and 33 performance-based restricted stock units issued during the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 2,687 and $ 5,135 for the 13 weeks ended August 3, 2024 and July 29, 2023, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 6,702 and $ 9,027 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

At August 3, 2024, there was approximately $ 25,089 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

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

Income tax expense of $ 94,735 for the 13 weeks ended May 4, 2024 represents an effective tax rate of 23.2 %, compared to $ 102,367 of income tax expense representing an effective tax rate of 22.8 % for the 13 weeks ended April 29, 2023.

The higher effective tax rate is primarily due to a reduced benefit from income tax accounting for stock-based compensation.

Income tax expense of $ 81,171 for the 13 weeks ended August 3, 2024 represents an effective tax rate of 24.3 %, compared to $ 95,989 of tax expense representing an effective tax rate of 24.2 % for the 13 weeks ended July 29, 2023.

Income tax expense of $ 175,906 for the 26 weeks ended August 3, 2024 represents an effective tax rate of 23.7 %, compared to $ 198,356 of tax expense representing an effective tax rate of 23.5 % for the 26 weeks ended July 29, 2023.

On August 16, 2022, the Inflation Reduction Act of 2022 was enacted into law, which, among other things, introduced a 15 % corporate alternative minimum tax on book income of certain large corporations and created a 1 % excise tax on net share repurchases.

The corporate alternative minimum tax is effective beginning in fiscal 2024 and did not have a

material impact on the consolidated financial statements for the 13 weeks ended May 4, 2024.

The corporate alternative minimum tax is effective beginning in fiscal 2024 and did not have a material impact on the consolidated financial statements for the 13 and 26 weeks ended August 3, 2024.

The excise tax applies to share repurchases made after December 31, 2022.

2 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(In thousands, except per share data)

3 unchanged sentences

Net income per common share:

The denominator for diluted net income per common share for the 13 weeks ended May 4, 2024 and April 29, 2023 excludes 150 and 79 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 13 weeks ended August 3, 2024 and July 29, 2023 excludes 184 and 127 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 26 weeks ended August 3, 2024 and July 29, 2023 excludes 195 and 133 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

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

12 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements