What changed in this filing

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Item 1. Financial Statements

2025-05-29 compared with 2024-12-05 · 57 added, 100 removed, 237 unchanged (40% of the section changed)

22 unchanged sentences

Accrued income taxes

Short-term debt

Total current liabilities

8 unchanged sentences

45,042 , 45,965 , and 47,845 shares outstanding;

at November 2, 2024 (unaudited), February 3, 2024, and October 28, 2023 (unaudited), respectively

at May 3, 2025 (unaudited), February 1, 2025, and May 4, 2024 (unaudited), respectively

Treasury stock-common, at cost

7 unchanged sentences

13 Weeks Ended

39 Weeks Ended

(In thousands, except per share data)

4 unchanged sentences

Interest income, net

Income before income taxes

Income before income taxes and equity net loss of affiliate

Income tax expense

Income before equity net loss of affiliate

Equity net loss of affiliate

Net income per common share:

12 unchanged sentences

Loss on disposal of property and equipment

Equity net loss of affiliate

Change in operating assets and liabilities:

12 unchanged sentences

Financing activities

Borrowings from credit facility

Repurchase of common shares

8 unchanged sentences

Income taxes paid, net of refunds

Non-cash investing and financing activities:

Non-cash capital expenditures

Repurchase of common shares in accrued liabilities

See accompanying notes to consolidated financial statements.

9 unchanged sentences

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

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares, including excise tax

Balance – November 2, 2024

See accompanying notes to consolidated financial statements.

Ulta Beauty, Inc.

Consolidated Statements of Stockholders’ Equity

Stockholders'

(In thousands)

Balance – January 28, 2023

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares, including excise tax

Balance – April 29, 2023

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares, including excise tax

Balance – July 29, 2023

Balance – February 1, 2025

Stock-based compensation

2 unchanged sentences

Repurchase of common shares, including excise tax

Balance – October 28, 2023

Balance – May 3, 2025

See accompanying notes to consolidated financial statements.

8 unchanged sentences

and its consolidated subsidiaries.

As of November 2, 2024, the Company operated 1,437 stores across 50 states, as shown in the table below.

As of May 3, 2025, the Company operated 1,451 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 and 39 weeks ended November 2, 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 weeks ended May 3, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending January 31, 2026, 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 1, 2025.

5 unchanged sentences

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

The third quarter in fiscal 2024 and 2023 ended on November 2, 2024 and October 28, 2023, respectively.

The first quarter in fiscal 2025 and 2024 ended on May 3, 2025 and May 4, 2024, respectively.

Use of estimates

4 unchanged sentences

Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Recent accounting pronouncements not yet adopted

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure.

The guidance updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance.

The ASU is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023-07 on related disclosures.

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

3 unchanged sentences

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

The new rules will require disclosure of material climate-related risks, including disclosure of Board of Directors' oversight and risk management activities, the material impacts of these risks to us and the quantification of material impacts to us as a result of severe weather events and other natural conditions.

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.

Income Statement – Reporting Comprehensive Income (Topic 220-40):

Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income (Topic 220-40):

Expense Disaggregation Disclosures.

This update requires, among other things, more detailed disclosure about types of expenses in commonly presented expense captions such as cost of sales and SG&A and is intended to improve the disclosures about an entity’s expenses including purchases of inventory, employee compensation, depreciation, and amortization.

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The Company is currently evaluating the impact of adopting ASU 2024-03 on the consolidated financial statements and disclosures.

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

3 unchanged sentences

13 Weeks Ended

39 Weeks Ended

(Percentage of net sales)

Certain sales departments were reclassified between categories in the prior year to conform to current year presentation, including moving the bath category from Fragrance to Skincare.

Skincare and wellness

Deferred revenue

1 unchanged sentence

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

The following table provides a summary of the changes included in deferred revenue during the 13 and 39 weeks ended November 2, 2024 and October 28, 2023:

13 Weeks Ended

The following table provides a summary of the changes included in deferred revenue during the 13 weeks ended May 3, 2025 and May 4, 2024:

13 Weeks Ended

6 unchanged sentences

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

Other amounts included in deferred revenue were $ 7,106 and $ 6,546 at November 2, 2024 and October 28, 2023, respectively.

Other amounts included in deferred revenue were $ 7,583 and $ 7,283 at May 3, 2025 and May 4, 2024, 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 November 2, 2024, February 3, 2024, and October 28, 2023.

No additional goodwill was recognized during the 13 and 39 weeks ended November 2, 2024.

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 10,870 at May 3, 2025, February 1, 2025, and May 4, 2024.

No additional goodwill was recognized during the 13 weeks ended May 3, 2025.

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

39 Weeks Ended

(In thousands)

6 unchanged sentences

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

(1) Excludes $ 27,737 and $ 27,682 related to cash received for tenant incentives for the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

(1) Excludes $ 15,782 and $ 7,791 related to cash received for tenant incentives for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

Commitments and contingencies

9 unchanged sentences

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

Substantially all of the Company’s assets are pledged as collateral for outstanding borrowings under the Loan Agreement.

Substantially all

of the Company’s assets are pledged as collateral for outstanding borrowings under the Loan Agreement.

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 November 2, 2024 and October 28, 2023, there was $ 199,700 and $ 195,400 , respectively, outstanding under the credit facility.

The weighted average interest rate was 7.15 % and 8.21 % for the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

As of February 3, 2024, there were no borrowings outstanding under the credit facility.

As of November 2, 2024, the Company was in compliance with all terms and covenants of the Loan Agreement.

As of May 3, 2025, February 1, 2025, and May 4, 2024, there were no borrowings outstanding under the credit facility.

As of May 3, 2025, 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 November 2, 2024 , February 3, 2024 , and October 28, 2023 , there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 51,916 , $ 42,653 , and $ 41,633 , respectively.

As of May 3, 2025, February 1, 2025, and May 4, 2024, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 44,712 , $ 43,117 , and $ 47,849 , 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 42 stock options during the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

Stock-based compensation expense for stock options was $ 1,531 and $ 1,742 for the 13 weeks ended November 2, 2024 and October 28, 2023, respectively.

Stock-based compensation expense for stock options was $ 4,716 and $ 4,961 for the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

The weighted-average grant date fair value of these stock options was $ 157.66 and $ 199.15 for the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

At November 2, 2024, there was approximately $ 13,690 of unrecognized stock-based compensation expense related to unvested stock options.

There were 53 and 48 restricted stock units issued during the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

Stock-based compensation expense for restricted stock units was $ 5,176 and $ 4,959 for the 13 weeks ended November 2, 2024 and October 28, 2023, respectively.

Stock-based compensation expense for restricted stock units was $ 14,561 and $ 14,252 for the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

At November 2, 2024, there was approximately $ 33,877 of unrecognized stock-based compensation expense related to restricted stock units.

There were 71 and 33 performance-based restricted stock units issued during the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 1,712 and $ 5,237 for the 13 weeks ended November 2, 2024 and October 28, 2023, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 8,414 and $ 14,264 for the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

At November 2, 2024, there was approximately $ 17,805 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

The Company granted 129 and 56 stock options during the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

Stock-based compensation expense for stock options was $ 3,039 and $ 1,680 for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

The weighted-average grant date fair value of these stock options was $ 107.99 and $ 157.66 for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

At May 3, 2025, there was approximately $ 18,931 of unrecognized stock-based compensation expense related to unvested stock options.

There were 99 and 44 restricted stock units issued during the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

Stock-based compensation expense for restricted stock units was $ 5,346 and $ 4,388 for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

At May 3, 2025, there was approximately $ 53,478 of unrecognized stock-based compensation expense related to restricted stock units.

There were no performance-based restricted stock units issued during the 13 weeks ended May 3, 2025.

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

Stock-based compensation expense for performance-based restricted stock units was $ 3,033 and $ 4,014 for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

At May 3, 2025, there was approximately $ 6,699 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 $ 77,997 for the 13 weeks ended November 2, 2024 represents an effective tax rate of 24.4 %, compared to $ 80,241 of tax expense representing an effective tax rate of 24.3 % for the 13 weeks ended October 28, 2023.

Income tax expense of $ 253,903 for the 39 weeks ended November 2, 2024 represents an effective tax rate of 23.9 %, compared to $ 278,597 of tax expense representing an effective tax rate of 23.7 % for the 39 weeks ended October 28, 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 and 39 weeks ended November 2, 2024.

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

Income tax expense of $ 99,644 for the 13 weeks ended May 3, 2025 represents an effective tax rate of 24.6 %, compared to $ 94,735 of income tax expense representing an effective tax rate of 23.2 % for the 13 weeks ended May 4, 2024.

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

Net income per common share

1 unchanged sentence

13 Weeks Ended

39 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 November 2, 2024 and October 28, 2023 excludes 176 and 124 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

The denominator for diluted net income per common share for the 39 weeks ended November 2, 2024 and October 28, 2023 excludes 206 and 144 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 May 3, 2025 and May 4, 2024 excludes 354 and 150 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects.

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

Share repurchase program

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

The 2022 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the earlier share repurchase program.

The 2022 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.

In March 2024, the Board of Directors authorized a share repurchase program (the March 2024 Share Repurchase Program) pursuant to which the Company could repurchase up to $ 2,000,000 of the Company’s common stock.

The March 2024 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the 2022 Share Repurchase Program.

The March 2024 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the earlier share repurchase program.

The March 2024 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.

In October 2024, the Board of Directors authorized a new share repurchase program (the October 2024 Share Repurchase Program) pursuant to which the Company may repurchase up to $ 3,000,000 of the Company’s common stock.

In October 2024, the Board of Directors authorized a share repurchase program (the October 2024 Share Repurchase Program) pursuant to which the Company may repurchase up to $ 3,000,000 of the Company’s common stock.

The October 2024 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the March 2024 Share Repurchase Program.

5 unchanged sentences

Total cost of shares repurchased, including excise tax

Segment reporting

The Company has one reportable segment, which includes retail stores, salon services, and e-commerce.

Within the reportable segment, there are significant expense categories included in the measure of the segment’s net income as shown below:

13 Weeks Ended

(In thousands, except per share data)

Cost of sales (1)

Associate expenses (2)

Advertising expense, net (3)

Pre-opening expenses

Other segment expenses (1) (4)

Interest income, net

Income tax expense

Equity net loss of affiliate

Included within cost of sales and other segment expenses is depreciation and amortization expense of $ 72,033 and $ 64,739 for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

Associate expenses include salaries, wages, bonus, and other forms of compensation related to associates.

Advertising expense, net consists of print, digital and social media, and television and radio advertising, net of vendor income that is a reimbursement of specific, incremental, and identifiable costs.

(4) Other segment expenses include other corporate overhead and store opening expenses within SG&A expenses.

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