What changed in this filing

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Item 1. Financial Statements

2025-08-28 compared with 2025-05-29 · 109 added, 35 removed, 259 unchanged (36% of the section changed)

22 unchanged sentences

Accrued income taxes

Short-term debt

Total current liabilities

8 unchanged sentences

44,875 , 45,965 , and 47,300 shares outstanding;

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

at August 2, 2025 (unaudited), February 1, 2025, and August 3, 2024 (unaudited), respectively

Treasury stock-common, at cost

7 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(In thousands, except per share data)

34 unchanged sentences

Capital expenditures

Acquisitions, net of cash acquired

Other investments

1 unchanged sentence

Financing activities

Borrowings from short-term debt

Payments on short-term debt

Repurchase of common shares

22 unchanged sentences

Balance – May 3, 2025

Stock-based compensation

Stock options exercised and other awards

Purchase of treasury shares

Repurchase of common shares, including excise tax

Balance – August 2, 2025

See accompanying notes to consolidated financial statements.

Ulta Beauty, Inc.

Consolidated Statements of Stockholders’ Equity

Stockholders'

(In thousands)

Balance – February 3, 2024

4 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

See accompanying notes to consolidated financial statements.

4 unchanged sentences

Ulta Beauty, Inc.

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

Nearly every store features a full-service salon.

and its subsidiaries operate specialty retail stores selling cosmetics, fragrance, haircare products, skincare and wellness products, and related accessories and services.

Nearly every store in the United States (U.S.) features a full-service salon.

As used in these notes and throughout this Quarterly Report on Form 10-Q, all references to “we,” “us,” “our,” “Ulta Beauty,” or the “Company” refer to Ulta Beauty, Inc.

and its consolidated subsidiaries.

As of May 3, 2025, the Company operated 1,451 stores across 50 states, as shown in the table below.

As of August 2, 2025, the Company operated 1,556 stores worldwide:

1,473 in the U.S.

located in 50 states (detailed below), 81 in the United Kingdom (U.K.), and two in Ireland.

New Hampshire

7 unchanged sentences

These financial statements were prepared on a consolidated basis to include the accounts of the Company and its wholly owned subsidiaries.

All significant intercompany accounts, transactions, and unrealized profit were eliminated in consolidation.

significant intercompany accounts, transactions, and unrealized profit were eliminated in consolidation.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to fairly state the financial position and results of operations and cash flows for the interim periods presented.

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 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.

The results for the 13 and 26 weeks ended August 2, 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 first quarter in fiscal 2025 and 2024 ended on May 3, 2025 and May 4, 2024, respectively.

The second quarter in fiscal 2025 and 2024 ended on August 2, 2025 and August 3, 2024, respectively.

Use of estimates

12 unchanged sentences

Early adoption is permitted.

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

The adoption of ASU 2023-09 is not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

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

3 unchanged sentences

13 Weeks Ended

26 Weeks Ended

(Percentage of net sales)

Skincare and wellness

(1) Excludes the impact of Space NK Limited (Space NK) net sales for the 13 and 26 weeks ended August 2, 2025.

Deferred revenue

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

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

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

The following table provides a summary of the changes included in deferred revenue during the 13 and 26 weeks ended August 2, 2025 and August 3, 2024:

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 $ 7,583 and $ 7,283 at May 3, 2025 and May 4, 2024, respectively.

Other amounts included in deferred revenue were $ 8,219 and $ 7,170 at August 2, 2025 and August 3, 2024, respectively.

On July 10, 2025, the Company acquired 100 % ownership in Space NK, a luxury beauty retailer operating in the U.K.

The acquisition was funded with cash on hand and borrowings under the Company’s existing credit facility.

The acquisition is not material to the Company’s consolidated financial statements.

Preliminary Allocation of the Purchase Price

The Company has not yet finalized the process of measuring the fair value of assets acquired and liabilities assumed in accordance with Accounting Standards Codification Topic 805, “Business Combinations” as of August 2, 2025.

Accordingly, the purchase price allocation is preliminary.

The Company expects to obtain the information necessary to finalize the purchase price allocation during the measurement period, not to exceed one year from the acquisition date.

Any changes to the preliminary estimates of the fair value during the measurement period will be recorded as adjustments to those assets and liabilities with a corresponding adjustment to goodwill.

The preliminary allocation of the purchase price consideration to the estimated fair value of the assets acquired and liabilities assumed on July 10, 2025 are as follows:

(In thousands)

Cash and cash equivalents

Merchandise inventories, net

Property and equipment, net

Other assets (1)

Accounts payable

Accrued liabilities

Other liabilities (2)

Estimated fair value excluding goodwill

Net assets acquired

(1) Includes amounts primarily related to receivables, prepaid expenses and other currents assets, and other intangible assets on the consolidated balance sheets.

(2) Includes amounts primarily related to deferred revenue, short-term debt, and deferred income taxes on the consolidated balance sheets.

Transaction costs related to the acquisition of Space NK were expensed as incurred and are included in selling, general and administrative expenses in the consolidated statements of income.

The results of operations of Space NK are included in the consolidated financial statements since the date of the acquisition.

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 3, 2025, February 1, 2025, and May 4, 2024.

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

Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $ 392,606 , $ 10,870 , and $ 10,870 at August 2, 2025, February 1, 2025, and August 3, 2024, respectively.

Goodwill of $ 381,736 was recognized during the 13 and 26 weeks ended August 2, 2025 related to the Company’s acquisition of Space NK.

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 $ 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.

(1) Excludes $ 27,376 and $ 19,882 related to cash received for tenant incentives for the 26 weeks ended August 2, 2025 and August 3, 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 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.

As of August 2, 2025, the Company had $ 237,700 of borrowings outstanding under this credit facility.

The weighted average interest rate was 6.89 % for the 26 weeks ended August 2, 2025.

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

As of August 2, 2025, the Company was in compliance with all terms and covenants of the Loan Agreement.

Ulta Beauty’s wholly owned subsidiary, Space NK, maintains a multi-currency revolving credit facility (the Facility Agreement) with National Westminster Bank plc, providing up to £ 40,000 for working capital requirements.

The Facility Agreement, maturing on April 17, 2028, allows Space NK to increase the revolving facility by an additional £ 10,000 with lender consent.

The facility is secured by the assets of Space NK and contains a requirement to maintain an interest coverage ratio not less than 4.0 to 1.0 and a leverage ratio not to exceed 2.0 to 1.0 for any relevant period.

Borrowings bear interest at either the compound or term Sterling Overnight Index Average plus a margin of 1.75 %, and an unused line fee of 0.60 % per annum.

As of August 2, 2025, there was $ 51,401 outstanding under this credit facility.

As of August 2, 2025, Space NK was in compliance with all terms and covenants of the Facility Agreement.

Fair value measurements

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

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

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

2 unchanged sentences

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

As of 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.

As of August 2, 2025 , February 1, 2025 , and August 3, 2024 , there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $ 48,417 , $ 43,117 , and $ 48,720 , 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 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.

The Company granted 134 and 56 stock options during the 26 weeks ended August 2, 2025 and August 3, 2024, respectively.

Stock-based compensation expense for stock options was $ 2,011 and $ 1,506 for the 13 weeks ended August 2, 2025 and August 3, 2024, respectively.

Stock-based compensation expense for stock options was $ 5,050 and $ 3,185 for the 26 weeks ended August 2, 2025 and August 3, 2024, respectively.

The weighted-average grant date fair value of these stock options was $ 109.39 and $ 157.66 for the 26 weeks ended August 2, 2025 and August 3, 2024, respectively.

At August 2, 2025, there was approximately $ 16,480 of unrecognized stock-based compensation expense related to unvested stock options.

There were 106 and 51 restricted stock units issued during the 26 weeks ended August 2, 2025 and August 3, 2024, respectively.

Stock-based compensation expense for restricted stock units was $ 5,626 and $ 4,997 for the 13 weeks ended August 2, 2025 and August 3, 2024, respectively.

Stock-based compensation expense for restricted stock units was $ 10,972 and $ 9,385 for the 26 weeks ended August 2, 2025 and August 3, 2024, respectively.

At August 2, 2025, there was approximately $ 48,603 of unrecognized stock-based compensation expense related to restricted stock units.

There were no performance-based restricted stock units issued during the 26 weeks ended August 2, 2025.

There were 71 performance-based restricted stock units issued during the 26 weeks ended August 3, 2024.

Stock-based compensation expense for performance-based restricted stock units was $ 1,283 and $ 2,687 for the 13 weeks ended August 2, 2025 and August 3, 2024, respectively.

Stock-based compensation expense for performance-based restricted stock units was $ 4,316 and $ 6,702 for the 26 weeks ended August 2, 2025 and August 3, 2024, respectively.

At August 2, 2025, there was approximately $ 4,752 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 $ 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.

Income tax expense of $ 84,795 for the 13 weeks ended August 2, 2025 represents an effective tax rate of 24.5 %, compared to $ 81,171 of tax expense representing an effective tax rate of 24.3 % for the 13 weeks ended August 3, 2024.

Income tax expense of $ 184,439 for the 26 weeks ended August 2, 2025 represents an effective tax rate of 24.5 %, compared to $ 175,906 of tax expense representing an effective tax rate of 23.7 % for the 26 weeks ended August 3, 2024.

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

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, which includes a broad range of tax reform provisions.

Among other things, the OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation.

The Company expects further guidance may be issued by the U.S.

government with respect to certain OBBBA tax provisions and is in the process of evaluating the impact of the OBBBA.

However, it is not expected to have a material impact on the consolidated financial statements.

Net income per common share

1 unchanged sentence

13 Weeks Ended

26 Weeks Ended

(In thousands, except per share data)

3 unchanged sentences

Net income per common share:

The denominator for diluted net income per common share for the 13 weeks ended 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.

The denominator for diluted net income per common share for the 13 weeks ended August 2, 2025 and August 3, 2024 excludes 217 and 184 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 2, 2025 and August 3, 2024 excludes 343 and 195 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.

15 unchanged sentences

13 Weeks Ended

(In thousands, except per share data)

26 Weeks Ended

(In thousands)

Cost of sales (1)

6 unchanged sentences

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.

Included within cost of sales and other segment expenses is depreciation and amortization expense of $ 71,165 and $ 65,314 for the 13 weeks ended August 2, 2025 and August 3, 2024, respectively, and $ 143,198 and $ 130,053 for the 26 weeks ended August 2, 2025 and August 3, 2024, respectively.

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

1 unchanged sentence

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

Subsequent events

On August 14, 2025, the Company and Target Corporation mutually agreed not to renew the Ulta Beauty at Target shop-in-shop partnership when the current agreement concludes in August 2026.

Until then, the Ulta Beauty at Target experience will continue in Target stores and on Target.com.

On August 27, 2025, the Company entered into Amendment No.

4 to its Second Amended and Restated Loan Agreement, which amended and restated the existing agreement.

The new loan agreement increases the revolving facility by an additional $ 200,000 and provides maximum revolving loans equal to the lesser of $ 1,000,000 or a percentage of eligible owned inventory and eligible owned receivables.

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