[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) This section presents the company's comprehensive financial statements and related disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Ulta Beauty, Inc.'s unaudited consolidated financial statements, including balance sheets, income statements, cash flow statements, and statements of stockholders' equity, along with detailed notes explaining the company's business, accounting policies, revenue recognition, recent acquisition of Space NK, debt, stock-based compensation, income taxes, and share repurchase programs for the periods ended August 2, 2025, and August 3, 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheets (In thousands) | (In thousands) | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :--- | :--- | :--- | :--- | | **Total Assets** | $6,630,648 | $6,001,693 | $5,737,408 | | **Total Liabilities** | $4,026,788 | $3,513,340 | $3,389,248 | | **Total Stockholders' Equity** | $2,603,860 | $2,488,353 | $2,348,160 | - Total assets increased by **$628.9 million (10.5%)** from February 1, 2025, to August 2, 2025, primarily driven by increases in merchandise inventories and property and equipment, net. Total liabilities increased by **$513.4 million (14.6%)** in the same period, mainly due to increases in accounts payable and short-term debt[10](index=10&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This section presents the company's financial performance over specific periods, detailing revenues, expenses, and net income Consolidated Statements of Income (In thousands, except per share data) | (In thousands, except per share data) | 13 Weeks Ended August 2, 2025 | 13 Weeks Ended August 3, 2024 | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $2,788,469 | $2,552,087 | $5,636,836 | $5,277,935 | | **Gross profit** | $1,091,696 | $978,177 | $2,205,915 | $2,047,957 | | **Operating income** | $344,854 | $329,201 | $746,631 | $730,149 | | **Net income** | $260,875 | $252,556 | $565,927 | $565,669 | | **Diluted EPS** | $5.78 | $5.30 | $12.49 | $11.78 | - For the 13 weeks ended August 2, 2025, Net Sales increased by **9.3% YoY**, Gross Profit increased by **11.6% YoY**, Operating Income increased by **4.7% YoY**, and Net Income increased by **3.3% YoY**. Diluted EPS grew by **8.9% YoY**[12](index=12&type=chunk) - For the 26 weeks ended August 2, 2025, Net Sales increased by **6.8% YoY**, Gross Profit increased by **7.7% YoY**, Operating Income increased by **2.3% YoY**, and Net Income increased by **0.05% YoY**. Diluted EPS grew by **6.0% YoY**[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows (In thousands) | (In thousands) | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $316,543 | $358,879 | | **Net cash used in investing activities** | $(559,911) | $(191,392) | | **Net cash used in financing activities** | $(217,088) | $(520,119) | | **Net decrease in cash and cash equivalents** | $(460,456) | $(352,632) | | **Cash and cash equivalents at end of period** | $242,745 | $413,962 | - Net cash provided by operating activities decreased by **$42.3 million (11.8%)** for the 26 weeks ended August 2, 2025, primarily due to a larger increase in merchandise inventories[15](index=15&type=chunk)[115](index=115&type=chunk) - Net cash used in investing activities significantly increased by **$368.5 million (192.5%)** for the 26 weeks ended August 2, 2025, mainly due to the acquisition of Space NK[15](index=15&type=chunk)[117](index=117&type=chunk) - Net cash used in financing activities decreased by **$303.0 million (58.3%)** for the 26 weeks ended August 2, 2025, driven by borrowings from short-term debt and a decrease in share repurchases[15](index=15&type=chunk)[121](index=121&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in the company's equity accounts, including retained earnings, additional paid-in capital, and treasury stock Consolidated Statements of Stockholders' Equity (In thousands) | (In thousands) | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :--- | :--- | :--- | :--- | | **Total Stockholders' Equity** | $2,603,860 | $2,488,353 | $2,348,160 | | **Retained Earnings** | $1,571,575 | $1,473,909 | $1,354,973 | | **Additional Paid-In Capital** | $1,151,858 | $1,120,769 | $1,099,197 | | **Treasury Stock-Common, at cost** | $(120,031) | $(106,793) | $(106,491) | - Total stockholders' equity increased by **$115.5 million** from February 1, 2025, to August 2, 2025, primarily due to net income of **$565.9 million**, partially offset by share repurchases and treasury stock purchases[10](index=10&type=chunk)[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements [1. Business and basis of presentation](index=8&type=section&id=1.%20Business%20and%20basis%20of%20presentation) This section describes Ulta Beauty's core business operations, store presence, and the foundational principles underlying its financial reporting - Ulta Beauty operates specialty retail stores selling cosmetics, fragrance, haircare, skincare, wellness products, and related services, with **1,556 stores worldwide** as of August 2, 2025 (**1,473 in the U.S., 81 in the U.K., and 2 in Ireland**)[24](index=24&type=chunk)[25](index=25&type=chunk) - The business is subject to seasonal fluctuation, with significant portions of net sales and net income realized during the fourth quarter due to the holiday selling season[28](index=28&type=chunk) [2. Summary of significant accounting policies](index=10&type=section&id=2.%20Summary%20of%20significant%20accounting%20policies) This section outlines the key accounting principles and estimates used in preparing the company's financial statements - The Company's fiscal quarters end on the Saturday closest to April 30, July 31, October 31, and January 31. The second quarter of fiscal 2025 ended on **August 2, 2025**[31](index=31&type=chunk) - Management considers inventory valuations, vendor allowances, impairment of long-lived assets, loyalty program, and income taxes as the most significant accounting policies involving estimates and judgments[32](index=32&type=chunk) - ASU 2023-09, 'Improvements to Income Tax Disclosures,' effective for fiscal years beginning after December 15, 2024, is not expected to materially impact financial statements[33](index=33&type=chunk) [3. Revenue](index=11&type=section&id=3.%20Revenue) This section details the sources and recognition policies for the company's net sales, including merchandise, services, and loyalty programs - Net sales include retail store and e-commerce merchandise sales, salon services, private label/co-branded credit card programs, Target Corporation royalties, and deferred revenue from loyalty programs and gift card breakage[34](index=34&type=chunk) Revenue by Primary Category | Primary Category | 13 Weeks Ended August 2, 2025 | 13 Weeks Ended August 3, 2024 | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Cosmetics** | 38% | 39% | 39% | 40% | | **Skincare and wellness** | 25% | 24% | 25% | 24% | | **Haircare** | 19% | 20% | 19% | 19% | | **Fragrance** | 12% | 11% | 11% | 11% | | **Services** | 4% | 4% | 4% | 4% | | **Other** | 2% | 2% | 2% | 2% | - Deferred revenue, primarily from unredeemed loyalty points and gift cards, had an ending balance of **$451.9 million** for the 26 weeks ended August 2, 2025, up from **$387.8 million** in the prior year[36](index=36&type=chunk) [4. Acquisitions](index=12&type=section&id=4.%20Acquisitions) This section describes the company's recent acquisition of Space NK, including its funding and preliminary purchase price allocation - On July 10, 2025, Ulta Beauty acquired **100% ownership of Space NK**, a luxury beauty retailer in the U.K. and Ireland, funded by cash and existing credit facilities. The acquisition is not material to consolidated financial statements[38](index=38&type=chunk) Preliminary Purchase Price Allocation (In thousands) | (In thousands) | Preliminary Purchase Price Allocation | | :--- | :--- | | **Cash and cash equivalents** | $12,359 | | **Merchandise inventories, net** | $72,747 | | **Property and equipment, net** | $44,678 | | **Other assets** | $22,005 | | **Accounts payable** | $(44,476) | | **Accrued liabilities** | $(52,984) | | **Other liabilities** | $(36,913) | | **Estimated fair value excluding goodwill** | $17,416 | | **Goodwill** | $381,736 | | **Net assets acquired** | $399,152 | [5. Goodwill and other intangible assets](index=13&type=section&id=5.%20Goodwill%20and%20other%20intangible%20assets) This section details the changes in goodwill, primarily driven by the Space NK acquisition - Goodwill increased significantly to **$392.6 million** at August 2, 2025, from **$10.9 million** at February 1, 2025, primarily due to **$381.7 million** recognized from the Space NK acquisition[42](index=42&type=chunk) [6. Leases](index=13&type=section&id=6.%20Leases) This section outlines the company's operating lease arrangements for stores, distribution centers, and equipment, including associated costs - The Company leases retail stores, distribution centers, corporate offices, and equipment under non-cancelable operating leases, with most operating lease costs classified within cost of sales[44](index=44&type=chunk)[45](index=45&type=chunk) Operating Lease Cost (In thousands) | (In thousands) | 13 Weeks Ended August 2, 2025 | 13 Weeks Ended August 3, 2024 | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Operating lease cost** | $94,050 | $88,080 | $187,516 | $176,235 | - Cash paid for operating lease liabilities was **$211.6 million** for the 26 weeks ended August 2, 2025, an increase from **$203.8 million** in the prior year[47](index=47&type=chunk) [7. Commitments and contingencies](index=14&type=section&id=7.%20Commitments%20and%20contingencies) This section addresses potential liabilities from legal proceedings, which management believes will not materially impact the company's financial position - Management believes that the amount of any liability from ongoing legal proceedings will not have a material adverse effect on the Company's financial position, results of operations, or cash flows[48](index=48&type=chunk) [8. Debt](index=14&type=section&id=8.%20Debt) This section details the company's credit facilities, including outstanding balances and interest rates for both Ulta Beauty and its subsidiary Space NK - The Company's Loan Agreement, amended March 13, 2024, matures March 13, 2029, providing maximum revolving loans of **$800 million** (with an option to increase by **$200 million**). As of August 2, 2025, **$237.7 million** was outstanding with a weighted average interest rate of **6.89%**[49](index=49&type=chunk)[50](index=50&type=chunk) - Space NK, a wholly-owned subsidiary, maintains a multi-currency revolving credit facility of up to **£40 million**, with **$51.4 million** outstanding as of August 2, 2025[51](index=51&type=chunk) [9. Fair value measurements](index=14&type=section&id=9.%20Fair%20value%20measurements) This section discusses the fair value of financial instruments, noting that carrying values approximate fair values due to short maturities - The carrying value of cash, receivables, payables, and debt approximates their fair values due to short maturities. Liabilities related to the non-qualified deferred compensation plan are categorized as **Level 2 fair value measurements**[52](index=52&type=chunk)[53](index=53&type=chunk) [10. Stock-based compensation](index=15&type=section&id=10.%20Stock-based%20compensation) This section details the expenses and unrecognized costs associated with the company's stock option, restricted stock unit, and performance-based restricted stock unit programs Stock-Based Compensation Expense (In thousands) | (In thousands) | 13 Weeks Ended August 2, 2025 | 13 Weeks Ended August 3, 2024 | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Stock options expense** | $2,011 | $1,506 | $5,050 | $3,185 | | **Restricted stock units expense** | $5,626 | $4,997 | $10,972 | $9,385 | | **Performance-based restricted stock units expense** | $1,283 | $2,687 | $4,316 | $6,702 | - Total unrecognized stock-based compensation expense was approximately **$69.8 million** as of August 2, 2025, related to unvested stock options, restricted stock units, and performance-based restricted stock units[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) [11. Income taxes](index=17&type=section&id=11.%20Income%20taxes) This section presents the company's income tax expense and effective tax rates, along with factors influencing tax rate changes Income Tax Expense and Effective Tax Rate (In thousands) | Period | Income Tax Expense (in thousands) | Effective Tax Rate | | :--- | :--- | :--- | | **13 Weeks Ended August 2, 2025** | $84,795 | 24.5% | | **13 Weeks Ended August 3, 2024** | $81,171 | 24.3% | | **26 Weeks Ended August 2, 2025** | $184,439 | 24.5% | | **26 Weeks Ended August 3, 2024** | $175,906 | 23.7% | - The higher effective tax rate for the 26 weeks ended August 2, 2025, is primarily due to a reduced benefit from income tax accounting for stock-based compensation[59](index=59&type=chunk) - The recently signed One Big Beautiful Bill Act (OBBBA) is not expected to have a material impact on the consolidated financial statements[60](index=60&type=chunk) [12. Net income per common share](index=17&type=section&id=12.%20Net%20income%20per%20common%20share) This section provides detailed calculations of basic and diluted net income per common share, along with weighted-average share counts Net Income Per Common Share (In thousands, except per share data) | (In thousands, except per share data) | 13 Weeks Ended August 2, 2025 | 13 Weeks Ended August 3, 2024 | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net income** | $260,875 | $252,556 | $565,927 | $565,669 | | **Weighted-average common shares – Basic** | 44,955 | 47,505 | 45,158 | 47,815 | | **Weighted-average common shares – Diluted** | 45,112 | 47,667 | 45,297 | 48,022 | | **Basic EPS** | $5.80 | $5.32 | $12.53 | $11.83 | | **Diluted EPS** | $5.78 | $5.30 | $12.49 | $11.78 | - Diluted EPS increased by **8.9%** for the 13 weeks and **6.0%** for the 26 weeks ended August 2, 2025, compared to the prior year periods[61](index=61&type=chunk) [13. Share repurchase program](index=17&type=section&id=13.%20Share%20repurchase%20program) This section outlines the company's share repurchase program, including authorization details and the number of shares repurchased - In October 2024, the Board authorized a new share repurchase program for up to **$3.0 billion** of common stock, revoking previous authorizations. As of August 2, 2025, **$2.2 billion** remained available under this program[63](index=63&type=chunk)[142](index=142&type=chunk) Share Repurchase Activity (In thousands) | (In thousands) | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | | **Shares repurchased** | 1,231 | 1,138 | | **Total cost of shares repurchased, including excise tax** | $472,371 | $501,846 | [14. Segment reporting](index=19&type=section&id=14.%20Segment%20reporting) This section confirms that the company operates as a single reportable segment, encompassing all retail and e-commerce activities - The Company operates as a single reportable segment, encompassing retail stores, salon services, and e-commerce[65](index=65&type=chunk) Segment Financial Data (In thousands) | (In thousands) | 13 Weeks Ended August 2, 2025 | 13 Weeks Ended August 3, 2024 | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $2,788,469 | $2,552,087 | $5,636,836 | $5,277,935 | | **Cost of sales** | 1,696,773 | 1,573,910 | 3,430,921 | 3,229,978 | | **Associate expenses** | 407,579 | 351,608 | 794,729 | 707,877 | | **Advertising expense, net** | 80,619 | 74,597 | 171,228 | 160,304 | | **Net income** | $260,875 | $252,556 | $565,927 | $565,669 | [15. Subsequent events](index=20&type=section&id=15.%20Subsequent%20events) This section discloses significant events occurring after the reporting period, including the termination of a partnership and an amendment to the loan agreement - Ulta Beauty and Target Corporation mutually agreed not to renew their shop-in-shop partnership when the current agreement concludes in **August 2026**[66](index=66&type=chunk) - On August 27, 2025, the Company amended its Loan Agreement, increasing the revolving facility by an additional **$200 million** to a maximum of **$1.0 billion**[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Ulta Beauty's financial condition and operational results, highlighting key performance drivers, current industry trends, and the impact of macroeconomic factors. It includes a detailed comparison of financial results for the 13 and 26 weeks ended August 2, 2025, versus the prior year, and discusses liquidity, capital resources, and critical accounting policies [Overview](index=23&type=section&id=Overview) This section introduces Ulta Beauty as a leading specialty beauty retailer, outlining its market position, growth strategy, and international presence - Ulta Beauty is the largest specialty beauty retailer in the U.S., offering a differentiated assortment of approximately **29,000 beauty products and services** across **1,500 stores**, Ulta.com, and mobile applications[73](index=73&type=chunk) - The Company's growth strategy focuses on four foundational areas: Assortment, Experience, Loyalty, and Access, aiming to drive profitable growth and market share leadership in beauty and wellness[74](index=74&type=chunk) - International expansion includes a joint venture in Mexico, a franchise in the Middle East, and the subsidiary Space NK in the U.K. and Ireland[73](index=73&type=chunk) [Current Trends](index=24&type=section&id=Current%20Trends) This section discusses the overall beauty market expansion and the potential impact of macroeconomic pressures on consumer spending and profitability - The overall beauty market expanded in **2024** and into **Q2 2025**, with Ulta Beauty confident in driving market share gains through its business model and strategic investments[78](index=78&type=chunk) - Persistent inflationary and macroeconomic pressures, including tariffs, are impacting consumer spending and could lead to lower sales trends and affect profitability in fiscal **2025**[79](index=79&type=chunk) [Basis of presentation](index=24&type=section&id=Basis%20of%20presentation) This section explains the company's revenue recognition policies for merchandise, salon services, and gift cards, along with factors influencing comparable sales - Revenue from merchandise is recognized at the point of sale in stores or upon shipment/guest pickup for e-commerce. Salon service revenue is recognized when provided, and gift card sales are deferred until redemption[81](index=81&type=chunk) - Comparable sales include sales from stores operating for at least **14 months**, salon services, and e-commerce, and are influenced by economic conditions, merchandise strategy, and marketing activities[82](index=82&type=chunk)[83](index=83&type=chunk) [Results of operations](index=26&type=section&id=Results%20of%20operations) This section analyzes the company's financial performance, comparing key metrics across different reporting periods [Comparison of 13 weeks ended August 2, 2025 to 13 weeks ended August 3, 2024](index=29&type=section&id=Comparison%20of%2013%20weeks%20ended%20August%202%2C%202025%20to%2013%20weeks%20ended%20August%203%2C%202024) This section provides a detailed financial comparison for the 13-week periods, highlighting changes in net sales, gross profit, SG&A, operating income, net income, and comparable sales Financial Performance (13 Weeks Ended) (Dollars in thousands) | (Dollars in thousands) | 13 Weeks Ended August 2, 2025 | 13 Weeks Ended August 3, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $2,788,469 | $2,552,087 | $236,382 | 9.3% | | **Gross profit** | $1,091,696 | $978,177 | $113,519 | 11.6% | | **SG&A expenses** | $741,737 | $644,821 | $96,916 | 15.0% | | **Operating income** | $344,854 | $329,201 | $15,653 | 4.7% | | **Net income** | $260,875 | $252,556 | $8,319 | 3.3% | | **Comparable sales** | 6.7% | (1.2%) | 7.9% pts | - | - The **6.7%** comparable sales increase was driven by a **3.7%** increase in transactions and a **2.9%** increase in average ticket[93](index=93&type=chunk) - Gross profit margin increased to **39.2%** (from **38.3%**) due to lower inventory shrink and higher merchandise margin, partially offset by deleverage of supply chain costs[94](index=94&type=chunk)[92](index=92&type=chunk) - SG&A expenses as a percentage of net sales increased to **26.6%** (from **25.3%**) due to higher incentive compensation, store payroll and benefits, and corporate overhead[95](index=95&type=chunk)[92](index=92&type=chunk) [Comparison of 26 weeks ended August 2, 2025 to 26 weeks ended August 3, 2024](index=29&type=section&id=Comparison%20of%2026%20weeks%20ended%20August%202%2C%202025%20to%2026%20weeks%20ended%20August%203%2C%202024) This section provides a detailed financial comparison for the 26-week periods, highlighting changes in net sales, gross profit, SG&A, operating income, net income, and comparable sales Financial Performance (26 Weeks Ended) (Dollars in thousands) | (Dollars in thousands) | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $5,636,836 | $5,277,935 | $358,901 | 6.8% | | **Gross profit** | $2,205,915 | $2,047,957 | $157,958 | 7.7% | | **SG&A expenses** | $1,452,350 | $1,310,734 | $141,616 | 10.8% | | **Operating income** | $746,631 | $730,149 | $16,482 | 2.3% | | **Net income** | $565,927 | $565,669 | $258 | 0.05% | | **Comparable sales** | 4.7% | 0.2% | 4.5% pts | - | - The **4.7%** comparable sales increase was driven by a **2.6%** increase in average ticket and a **2.1%** increase in transactions[100](index=100&type=chunk) - Gross profit margin increased to **39.1%** (from **38.8%**) due to lower inventory shrink, higher merchandise margin, and favorable channel mix shifts, partially offset by lower other revenue and deleverage of supply chain costs[101](index=101&type=chunk)[92](index=92&type=chunk) - SG&A expenses as a percentage of net sales increased to **25.8%** (from **24.8%**) due to deleverage of store payroll and benefits, higher incentive compensation, and higher store expenses[102](index=102&type=chunk)[92](index=92&type=chunk) [Liquidity and capital resources](index=31&type=section&id=Liquidity%20and%20capital%20resources) This section discusses the company's sources of liquidity, cash needs, working capital requirements, and capital allocation strategies - Primary liquidity sources are cash and cash equivalents, cash flows from operations, and credit facility borrowings. Cash and cash equivalents were **$242.7 million** as of August 2, 2025[107](index=107&type=chunk) - Key cash needs include rent, capital expenditures for new/remodeled stores, inventory, supply chain improvements, share repurchases, and IT system investments[108](index=108&type=chunk) - Working capital needs are highest from August through November due to inventory build-up for the holiday season[109](index=109&type=chunk)[110](index=110&type=chunk) [Cash flows](index=33&type=section&id=Cash%20flows) This section analyzes the company's cash flow performance from operating, investing, and financing activities Cash Flow Summary (In thousands) | (In thousands) | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $316,543 | $358,879 | | **Net cash used in investing activities** | $(559,911) | $(191,392) | | **Net cash used in financing activities** | $(217,088) | $(520,119) | - The decrease in operating cash flow was mainly due to a larger increase in merchandise inventories (**$408.8 million increase YoY**) and other assets/liabilities, partially offset by timing of accounts payable and accrued liabilities[115](index=115&type=chunk)[116](index=116&type=chunk) - The increase in cash used in investing activities was primarily due to the acquisition of Space NK[117](index=117&type=chunk) [Share repurchase program](index=34&type=section&id=Share%20repurchase%20program) This section details the company's share repurchase program, including authorized amounts and recent repurchase activity - The October 2024 Share Repurchase Program authorizes up to **$3.0 billion** in common stock repurchases, with **$2.2 billion** remaining as of August 2, 2025[123](index=123&type=chunk)[142](index=142&type=chunk) Share Repurchase Activity (Dollars in millions) | (Dollars in millions) | 26 Weeks Ended August 2, 2025 | 26 Weeks Ended August 3, 2024 | | :--- | :--- | :--- | | **Shares repurchased** | 1,231,292 | 1,137,856 | | **Total cost of shares repurchased** | $472.4 | $501.8 | [Credit facility](index=34&type=section&id=Credit%20facility) This section describes the company's credit facilities, including outstanding balances, interest rates, and recent amendments - As of August 2, 2025, Ulta Beauty had **$237.7 million** outstanding under its **$800 million** credit facility (amended to **$1.0 billion** post-period), with a weighted average interest rate of **6.89%** for the 26 weeks ended August 2, 2025[125](index=125&type=chunk)[127](index=127&type=chunk) - Space NK had **$51.4 million** outstanding under its **£40 million** multi-currency revolving credit facility as of August 2, 2025[128](index=128&type=chunk) [Seasonality](index=36&type=section&id=Seasonality) This section highlights the significant seasonal fluctuations in the company's business, with the fourth quarter being the most impactful - The business experiences significant seasonal fluctuations, with the fourth quarter (holiday selling season) contributing the largest portions of net sales and profits[129](index=129&type=chunk) [Critical accounting policies and estimates](index=36&type=section&id=Critical%20accounting%20policies%20and%20estimates) This section confirms that there have been no significant changes to the company's critical accounting policies and estimates since the last annual report - There have been no significant changes to the critical accounting policies and estimates since the Annual Report on Form 10-K for the fiscal year ended February 1, 2025[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines Ulta Beauty's exposure to market risks, primarily focusing on interest rate fluctuations and foreign currency exchange rates, and assesses their potential impact on the company's financial position [Interest rate risk](index=36&type=section&id=Interest%20rate%20risk) This section addresses the company's exposure to interest rate fluctuations from variable-rate borrowings and assesses their potential financial impact - The Company is exposed to interest rate risks through variable-rate borrowings under its credit facilities, with **$289.1 million** outstanding as of August 2, 2025[132](index=132&type=chunk) - A hypothetical **1%** increase in interest rates on variable debt would not have a material impact on operating income for the 26 weeks ended August 2, 2025[133](index=133&type=chunk) [Foreign currency exchange rate risk](index=38&type=section&id=Foreign%20currency%20exchange%20rate%20risk) This section assesses the company's exposure to foreign currency exchange rate fluctuations, concluding that the impact is not material - Exposure to foreign currency exchange rate fluctuations from foreign operations is not material to the Company's financial condition or results of operations[134](index=134&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Ulta Beauty's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter [Evaluation of disclosure controls and procedures over financial reporting](index=38&type=section&id=Evaluation%20of%20disclosure%20controls%20and%20procedures%20over%20financial%20reporting) This section confirms the effectiveness of the company's disclosure controls and procedures as evaluated by senior management - As of August 2, 2025, the Chief Executive Officer and Interim Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective[136](index=136&type=chunk) [Changes in internal control over financial reporting](index=38&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting) This section reports that no material changes occurred in internal control over financial reporting during the reporting period - There were no changes to internal controls over financial reporting during the 13 weeks ended August 2, 2025, that materially affected or are reasonably likely to materially affect them[137](index=137&type=chunk) [Part II - Other Information](index=38&type=section&id=Part%20II%20-%20Other%20Information) This section provides additional disclosures not covered in the financial statements, including legal proceedings, risk factors, and equity security sales [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 7 of the consolidated financial statements for information regarding legal proceedings and commitments - Information on legal proceedings is provided in **Note 7** to the consolidated financial statements[139](index=139&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - No material changes have occurred from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended February 1, 2025[140](index=140&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's common stock repurchase activity during the second quarter of fiscal 2025, including the number of shares purchased and the remaining authorization under the current program Common Stock Repurchase Activity | Period | Total number of shares purchased (1) | Average price paid per share | Approximate dollar value of shares that may yet be purchased (in thousands) (2) | | :--- | :--- | :--- | :--- | | **13 weeks ended August 2, 2025** | 245,256 | $450.99 | $2,227,465 | - As of August 2, 2025, **$2.2 billion** remained available under the October 2024 Share Repurchase Program[142](index=142&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[143](index=143&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - There are no mine safety disclosures[143](index=143&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section confirms that no director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the 13 weeks ended August 2, 2025 - No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the 13 weeks ended August 2, 2025[143](index=143&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, loan agreements, certifications, and XBRL data files - The report includes various exhibits such as the Certificate of Incorporation, Bylaws, Amendment No. 4 to the Loan Agreement, CEO/CFO certifications, and Inline XBRL data files[144](index=144&type=chunk)[146](index=146&type=chunk) [SIGNATURES](index=41&type=section&id=SIGNATURES) This section contains the required signatures for the Quarterly Report on Form 10-Q, confirming its submission on behalf of Ulta Beauty, Inc - The report was signed on **August 28, 2025**, by Christopher Lialios, Interim Chief Financial Officer[148](index=148&type=chunk)[150](index=150&type=chunk)

Exhibit 99.1 ULTA BEAUTY ANNOUNCES SECOND QUARTER FISCAL 2025 RESULTS Net Sales Increased 9.3% to $2.8 Billion Compared to $2.6 Billion in the Prior Year Quarter Comparable Sales Increased 6.7% Net Income Increased to $260.9 Million or $5.78 Per Diluted Share Bolingbrook, IL – August 28, 2025 – Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period ("second quarter") and twenty- six-week period ("first six months") ended August 2, 2025, compared to the same periods e ...

Core Insights - Ulta Beauty, Inc. (ULTA) is expected to report second-quarter fiscal 2025 earnings on August 28, after market close [1] Revenue and Earnings Estimates - The Zacks Consensus Estimate for fiscal second-quarter revenues is $2.65 billion, reflecting a 4% increase from the prior-year quarter [2] - The consensus estimate for quarterly earnings has risen by 2.3% in the last 30 days to $4.98 per share, indicating a decline of 6% from the figure reported in the year-ago quarter [2] - Ulta Beauty has delivered a trailing four-quarter earnings surprise of 11.9%, on average [2] Growth Drivers - Ulta Beauty is a leader in beauty retail, integrating mass, prestige, and luxury brands into a unique shopping experience [3] - The company's omnichannel strategy combines physical retail with digital innovations, enhancing customer engagement and sales through upgraded mobile app features and AI-driven personalized experiences [3] - Continued investments in marketing and social platforms are enhancing brand visibility, while a focus on product assortment and loyalty engagement is driving traffic [4] - The emphasis on skincare, particularly strong performances from brands like Sol de Janeiro and Tatcha, is contributing to growth [4] Challenges - Ulta Beauty's fiscal second-quarter performance is under pressure from rising selling, general and administrative (SG&A) expenses, which are expected to increase by 180 basis points to 27.1% of net sales [5] - Margin performance is likely to be affected by increased supply-chain expenses [5] - A persistent decline in the makeup category poses a risk to the company's growth momentum [5] Earnings Prediction - The model predicts an earnings beat for Ulta Beauty, supported by a positive Earnings ESP of +1.19% and a Zacks Rank of 2 (Buy) [6][7]

Core Insights - Ulta Beauty is expected to report fiscal Q2 results on August 28, 2025, with analysts forecasting earnings of $4.98 per share and revenue of $2.66 billion, reflecting a 6% decline in earnings year-over-year and a 4% increase in sales compared to the previous year [2] - Historically, Ulta's stock has dropped post-earnings announcements 65% of the time, with a median one-day decline of 3.5% and a maximum drop of 13% [2] Financial Performance - In Q1, Ulta demonstrated strong performance with solid growth, stable margins, and an EPS exceedance, supported by the "Unleashed" strategy and robust consumer demand in wellness and fragrance [3] - The company has a market capitalization of $23 billion, with $11 billion in revenue over the past twelve months, $1.6 billion in operating profits, and net income of $1.2 billion [3] Historical Earnings Trends - Over the last five years, Ulta has recorded 20 earnings data points, with 9 positive and 11 negative one-day returns, resulting in positive returns approximately 45% of the time [6] - This percentage increases to 50% when examining the last three years, with a median positive return of 9.0% and a median negative return of -3.5% [6] Trading Strategies - Event-driven traders can leverage historical trends to position themselves ahead of earnings or respond to market movements post-release [4] - A lower-risk strategy involves understanding the correlation between short-term and medium-term returns following earnings, allowing traders to position themselves accordingly based on 1D and 5D return correlations [7]

Core Viewpoint - Ulta Beauty Inc. is entering its second-quarter earnings report with strong sales momentum and international expansion plans, despite facing margin pressures and changing consumer spending patterns [1]. Financial Performance - The company is expected to report second-quarter fiscal 2025 results on August 28, with earnings projected at $5.07 per share, an increase from the previous estimate of $4.87 but down from $5.30 a year ago [3]. - Revenue is forecasted to rise by 4.7% year-over-year to $2.67 billion, slightly above consensus estimates of $2.66 billion [4]. - Gross margins are anticipated to narrow by 20 basis points to 38.1%, while operating margins are expected to contract by 160 basis points to 11.3% [4]. Analyst Ratings and Forecasts - Telsey Advisory Group analyst Dana Telsey raised her price forecast for Ulta to $590 from $520, reflecting a 21.4x multiple on forward earnings, which is above recent trading levels but below Ulta's 10-year average [2]. - For fiscal 2025, Ulta reaffirmed guidance with sales expected between $11.5 billion and $11.7 billion and earnings per share between $22.65 and $23.30, while Telsey raised her EPS estimate to $23.45 [6]. Strategic Developments - Recent corporate updates include the planned conclusion of Ulta's Target shop-in-shop program in 2026, the acquisition of U.K.-based retailer Space NK, and international expansion initiatives in Mexico and the Middle East [5]. - Leadership changes are ongoing under new CEO Kecia Steelman, who took over in June following the departure of CFO Paula Oyibo [5]. Market Sentiment - Analysts from JPMorgan, Barclays, Oppenheimer, Canaccord, and DA Davidson have raised their price forecasts for Ulta, reflecting optimism despite margin challenges [8]. - Telsey highlighted consumer spending trends as a significant risk for the latter half of the year, with fragrance being a standout category while skincare, wellness, and makeup show mixed performance [7].

Group 1 - The stock of Ulta Beauty, Inc. (ULTA) is experiencing significant attention due to high implied volatility in the options market, particularly the Sep 19, 2025 $180 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Ulta Beauty's stock price, potentially due to an upcoming event [2] - Analysts have a generally positive outlook on Ulta Beauty, with four analysts raising their earnings estimates for the current quarter, resulting in an increase in the Zacks Consensus Estimate from $4.87 to $4.97 per share [3] Group 2 - The high implied volatility surrounding Ulta Beauty may indicate a developing trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility [4]

Core Insights - Analysts project Ulta Beauty (ULTA) will report quarterly earnings of $4.97 per share, a decline of 6.2% year over year, with revenues expected to reach $2.64 billion, an increase of 3.5% from the same quarter last year [1] Earnings Projections - The consensus EPS estimate for the quarter has been revised upward by 0.3% over the past 30 days, indicating a collective reassessment by analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior and have a strong correlation with short-term stock price performance [3] Key Metrics Estimates - Total stores open at the end of the quarter are projected to be 1,466, up from 1,411 a year ago [5] - The number of stores opened during the quarter is estimated at 13, compared to 17 in the same quarter last year [5] - Total gross square feet at the end of the quarter is forecasted to reach 15,294 million square feet, an increase from 14,783 million square feet in the previous year [6] - Net sales per average total square footage is estimated at $175.52, up from $172.64 a year ago [6] - Total stores open at the beginning of the quarter are expected to be 1,451, compared to 1,395 a year ago [7] Market Performance - Over the past month, Ulta shares have recorded returns of +2.8%, slightly outperforming the Zacks S&P 500 composite's +2.7% change [7] - Based on its Zacks Rank 3 (Hold), Ulta is expected to perform in line with the overall market in the upcoming period [7]

Core Viewpoint - Ulta Beauty Inc. is experiencing positive momentum ahead of its earnings report, driven by stronger sales trends, tighter promotions, and increased product innovation, leading to expectations of robust growth and higher profitability in the upcoming quarters [1] Group 1: Sales and Earnings Forecast - JP Morgan analyst Christopher Horvers raised his second-quarter comparable sales forecast to 4.8%, significantly above the Street's expectation of 2.5% and his previous estimate of 2% [2] - If Ulta meets the forecast, earnings could exceed the original full-year EPS guidance by approximately $1.40 in the first half [4] - Horvers projects EPS of $24.85 in 2025, $28.03 in 2026, and $31.64 in 2027, supported by a 3.5% same-store sales growth [4] Group 2: Product Innovation and Promotions - Product innovation has nearly quadrupled year over year, with the introduction of eight new K-Beauty brands, while Ulta has narrowed promotions to exclude fragrance and prestige categories [3] Group 3: Analyst Ratings and Price Forecasts - Horvers reaffirmed an Overweight rating on Ulta and raised his price forecast from $525 to $600, citing stronger comps and higher EPS [1] - Other analysts have also turned positive on Ulta, with Barclays upgrading the stock from Equal-Weight to Overweight and raising its forecast from $518 to $589 [6] - Oppenheimer reiterated an Outperform rating and increased its forecast from $510 to $600, while Canaccord Genuity maintained a Buy rating and boosted its forecast from $542 to $600 [7] Group 4: Market Position and Future Outlook - Ulta's unique mass-prestige mix, loyalty program data, and market-leading assortment position the company for sustainable margin expansion, share gains, and earnings growth [5] - The company is expected to provide a more meaningful full-year raise after modestly lifting first-quarter guidance [4]

Group 1 - Ulta Beauty Inc shares increased by 1.4% to $527.27 after receiving an upgrade to "overweight" from "equal weight" at Barclays, which also raised the price target to $589 from $518 due to a positive outlook on same-store sales and resilience against tariff challenges [1] - The stock has rebounded above $520 after a decline from its 52-week high of $534.10, with a 40.7% increase over the past 12 months and a third consecutive daily gain following an 11.8% rise post-earnings on May 30 [2] - The upcoming second-quarter report is anticipated on August 28, with 15 out of 27 brokerages currently holding a "hold" or "strong sell" rating, indicating potential for more bullish notes if bearish sentiment diminishes [3] Group 2 - Options traders have shown increased bearish sentiment recently, with a 10-day put/call volume ratio of 1.03, ranking higher than 80% of readings from the past year, indicating a prevailing put-bias among short-term traders [4] - The Schaeffer's put/call open interest ratio (SOIR) stands at 1.73, placing it in the 99th percentile of readings from the past 12 months, further reflecting the bearish outlook among traders [4]

Core Viewpoint - Ulta Beauty (ULTA) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended July 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Financial Expectations - The upcoming earnings report is expected to reveal quarterly earnings of $4.97 per share, reflecting a year-over-year decrease of 6.2%, while revenues are projected to reach $2.64 billion, representing a 3.5% increase from the previous year [3]. - The consensus EPS estimate has been revised 0.34% higher in the last 30 days, indicating a slight positive adjustment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that Ulta has a positive Earnings ESP of +1.39%, suggesting a likelihood of beating the consensus EPS estimate [12]. - The stock currently holds a Zacks Rank of 3, which, when combined with the positive Earnings ESP, indicates a strong potential for an earnings beat [12]. Historical Performance - In the last reported quarter, Ulta exceeded the expected earnings of $5.77 per share by delivering $6.70, resulting in a surprise of +16.12% [13]. - Over the past four quarters, Ulta has surpassed consensus EPS estimates three times [14]. Industry Context - Another player in the retail sector, Five Below (FIVE), is expected to report earnings of $0.61 per share for the same quarter, indicating a year-over-year increase of 13%, with revenues projected at $997.33 million, up 20.2% from the previous year [18]. - Despite a significant downward revision of 130.8% in the consensus EPS estimate for Five Below over the last 30 days, a higher Most Accurate Estimate has resulted in an Earnings ESP of +13.35%, suggesting a likely earnings beat [19].