AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 19/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Assortment breadth, exclusives and engagement establish differentiation, but their ability to prevent imitation or sustain superior competitive economics remains unresolved.
durability · — · The catalog does not establish durable protection for customer relationships or exclusive assortment. Supply agreements lack long-term commitments, and one distribution partnership was announced for nonrenewal.
customer dependency · — · Rewards and growing membership support engagement but cannot establish meaningful dependence or switching friction. The moat verdict remains uncertain.
erosion resilience · — · Recent comparable-sales growth and margin recovery coexist with historical promotional pressure and earnings declines. They do not resolve whether a structural advantage withstands competitive erosion.
Pricing power63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Historical price-increase benefits coexist with higher promotions and merchandise-margin pressure. First-quarter ticket rose 3.7% and second-quarter ticket rose 3.9%, but neither isolates realized price from mix or basket size.
retention · 3/4 · Membership rose 5% to 46.7 million, active application users increased 15%, and members accounted for approximately 95% of sales. Rewards rights and positive comparable sales reinforce demonstrated engagement. Repeat demand is assessed indirectly; no cohort retention rate or exclusive loyalty is inferred.
margin resilience · 2/4 · First-half 2026 gross margin improved to 39.6% from 39.1% and operating margin to 13.4% from 13.2%. Second-quarter gross margin slipped slightly, attributed primarily to acquisition mix. Historical promotional pressure and two annual net-income declines temper the recovery; margins do not independently establish pricing power.
contractual freedom · 3/4 · Consumer terms expressly permit price changes, channel-specific pricing and agreement modifications upon notice. This demonstrates strong online transactional flexibility, while supplier restrictions and customers' willingness to accept changes remain unestablished.
Predictability99
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 6.19
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.10
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 53.08
- Current ratio (x)
- 1.41
- cashInterestPaid
- 9.67
- cashInterestCoverage
- 155.36
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -4.45
- 3-year average SBC / revenue (%)
- 0.37
- cashConversionGrade
- 84.30
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half operating cash generation of approximately $381.6 million exceeded $139.5 million of capital expenditure, and inventory remained flat during expansion. However, $798.6 million of repurchases including excise tax accompanied higher borrowings explicitly supporting repurchases among other needs. Acquisition returns and repurchase value creation remain unestablished.
incentive alignment · 2/4 · Actual EBT-linked incentives, ownership requirements, clawbacks and issued performance options support alignment. Discretionary incentive adjustments and discontinuation of operating performance-based share awards temper it. The later quarterly filing confirms option issuance following disclosed performance and service conditions; achievement or vesting is not established.
execution · 2/4 · Positive comparable sales, higher first-half operating income, growing engagement and improved inventory management demonstrate recent execution. Attribution is partly indirect, and acquisition and new-store contributions affect total growth. Two preceding annual net-income declines prevent a strong sustained-execution grade.
governance · 3/4 · Existing independent committees, a nonexecutive chair, annual elections, majority voting, proxy access, ownership requirements, anti-hedging and anti-pledging rules, and an adopted clawback policy demonstrate strong governance arrangements. Management reports effective disclosure controls. Exceptional oversight outcomes are not established.
Evidence
Ulta U.S.’s core assortment offers one of the most extensive product and brand selections in its industry, with approximately 30,000 products from approximately 600 well-established and emerging beauty and wellness brands across all categories and price points offered to guests across Ulta U.S.’s stores, Ulta.com, and mobile applications.
Business / Brand Building and Merchandising Innovation · Filed 26/03/2026
We increased the number of members in our Ulta Beauty Rewards loyalty program by 5% to a record 46.7 million members as of year-end.
Compensation Discussion and Analysis / fiscal 2025 operating achievements · Filed 22/04/2026
With more than 46 million members as of the end of fiscal 2025 and approximately 95% of total sales coming from members in fiscal 2025, Ulta U.S.
Business / Ulta Beauty Rewards membership and sales contribution · Filed 26/03/2026
We delivered strong app engagement with our guests with approximately 60% of online sales for the year made through our app and drove active application users up 15% year-over -year.
Compensation Discussion and Analysis / application engagement · Filed 22/04/2026
We rely on our good relationships with brand partners to purchase prestige, mass, and salon beauty products on reasonable terms, and to offer certain brands or products that are permanently or temporarily exclusive to us.
Risk Factors / access to permanent or temporary exclusive products · Filed 26/03/2026
We have no long-term supply agreements with brand partners, so our success depends on maintaining good relationships with them.
Risk Factors / absence of long-term brand supply agreements · Filed 26/03/2026
On August 14, 2025, Ulta Beauty and Target announced a mutual agreement to not renew the Ulta Beauty at Target shop-in-shop partnership when the current agreement concludes in August 2026.
Business / announced partnership nonrenewal · Filed 26/03/2026
The decrease in gross profit margin was primarily due to:
●
80 basis points of deleverage in merchandise margins driven by higher promotional activity and category mix, as well as lapping of benefits from price increases; and
●
40 basis points of deleverage in inventory shrink; partially offset by
●
50 basis points of leverage in other revenue primarily due to credit card income growth, an increase in royalty income from our partnership with Target, and higher loyalty point redemptions; and
●
20 basis points of leverage of store fixed costs attributed to the impact of higher sales.
MD&A / fiscal 2023 gross-margin drivers and promotional activity · Filed 27/03/2025
The Company’s major competitors for prestige and mass products include traditional department stores, specialty stores, grocery stores, drug stores, mass merchandisers, and the online capabilities of national retailers and brands, as well as pure-play e-commerce companies and online marketplaces.
Business / Competition · Filed 26/03/2026
Points earned are valid for at least one year.
Accounting policies / loyalty point validity · Filed 26/03/2026
The loyalty program represents a material right to the customer and points may be redeemed on future products and services.
Accounting policies / customer redemption rights · Filed 26/03/2026
The following tables present the components of our consolidated results of operations for the periods indicated: 13 Weeks Ended 26 Weeks Ended August 1, August 2, August 1, August 2, (Dollars in thousands) 2026 2025 2026 2025 Net sales $ 3,035,676 $ 2,788,469 $ 6,199,533 $ 5,636,836 Cost of sales 1,848,724 1,696,773 3,744,961 3,430,921 Gross profit 1,186,952 1,091,696 2,454,572 2,205,915 Selling, general and administrative expenses 802,784 741,737 1,617,483 1,452,350 Pre-opening expenses 4,527 5,105 9,192 6,934 Operating income 379,641 344,854 827,897 746,631 Interest expense (income), net 3,684 (1,413) 3,032 (4,960) Income before income taxes and equity net loss of affiliate 375,957 346,267 824,865 751,591 Income tax expense 91,878 84,795 198,738 184,439 Income before equity net loss of affiliate 284,079 261,472 626,127 567,152 Equity net loss of affiliate 2,073 597 3,652 1,225 Net income $ 282,006 $ 260,875 $ 622,475 $ 565,927 Other operating data: Number of stores end of period 1,622 1,556 1,622 1,556 Comparable sales 3.8% 6.7% 4.6% 4.7% 21 Table of Contents 13 Weeks Ended 26 Weeks Ended August 1, August 2, August 1, August 2, (Percentage of net sales) 2026 2025 2026 2025 Net sales 100.0% 100.0% 100.0% 100.0% Cost of sales 60.9% 60.8% 60.4% 60.9% Gross profit 39.1% 39.2% 39.6% 39.1% Selling, general and administrative expenses 26.4% 26.6% 26.1% 25.8% Pre-opening expenses 0.1% 0.2% 0.1% 0.1% Operating income 12.5% 12.4% 13.4% 13.2% Interest expense (income), net 0.1% (0.1%) 0.0% (0.1%) Income before income taxes and equity net loss of affiliate 12.4% 12.4% 13.3% 13.3% Income tax expense 3.0% 3.0% 3.2% 3.3% Income before equity net loss of affiliate 9.4% 9.4% 10.1% 10.1% Equity net loss of affiliate 0.1% 0.0% 0.1% 0.0% Net income 9.3% 9.4% 10.0% 10.0% 22 Table of Contents Comparison of 13 weeks ended August 1, 2026 to 13 weeks ended August 2, 2025 Net sales Net sales increased $247.2 million, or 8.9%, to $3.0 billion for the 13 weeks ended August 1, 2026, compared to $2.8 billion for the 13 weeks ended August 2, 2025.
MD&A / quarterly and first-half operating results and margins · Filed 27/08/2026
The comparable sales increase of 3.8% for the 13 weeks ended August 1, 2026 was primarily driven by a 3.9% increase in average ticket.
MD&A / second-quarter comparable sales and average ticket · Filed 27/08/2026
The total comparable sales increase of 5.3% for the 13 weeks ended
20
Table of Contents
May 2, 2026 was driven by a 3.7% increase in average ticket and a 1.6% increase in transactions.
MD&A / first-quarter comparable sales, ticket and transactions · Filed 02/06/2026
81 Table of Contents Within the reportable segment, there are significant expense categories regularly provided to the CODM and included in the measure of the segment’s net income as shown below: Fiscal Year Ended January 31, February 1, February 3, (In thousands) 2026 2025 2024 Net sales $ 12,392,820 $ 11,295,654 $ 11,207,303 Less: Cost of sales (1) 7,547,596 6,908,401 6,826,203 Associate expenses (2) 1,714,677 1,459,231 1,391,175 Advertising expense, net (3) 490,980 431,455 422,779 Pre-opening expenses 15,821 13,689 8,510 Other segment expenses (1) (4) 1,090,754 917,906 880,607 Interest expense (income), net 1,787 (15,094) (17,622) Income tax expense 373,869 378,948 404,646 Equity net loss of affiliate 3,857 — — Net income $ 1,153,479 $ 1,201,118 $ 1,291,005 (1) Included within cost of sales and other segment expenses is depreciation and amortization expense of $300,772, $267,042, and $243,840 is fiscal years 2025, 2024, and 2023, respectively, as described in Note 2, “Summary of significant accounting policies.”
Segment reporting / fiscal 2023–2025 results · Filed 26/03/2026
Price and availability information contained on this site is subject to change without notice.
Consumer terms / price and availability changes · Retrieved 19/10/2026
Pricing for items on Ulta.com may be different from prices available in ULTA stores or on ULTA mobile applications (pricing and availability remain subject to confirmation at checkout for mobile users).
Consumer terms / pricing differences across channels · Retrieved 19/10/2026
Changes to This Agreement
Ulta Beauty reserves the right, at any time, to modify or update the terms of this Agreement, upon notice to the Customer in writing to the last address supplied by the Customer, by email or posting on the site or by any other reasonable means of communication.
Consumer terms / modification of agreement · Retrieved 19/10/2026
The following table presents a summary of our cash flows: 26 Weeks Ended August 1, August 2, (In thousands) 2026 2025 Net cash provided by operating activities $ 381,591 $ 316,543 Net cash used in investing activities (133,980) (559,911) Net cash used in financing activities (512,914) (217,088) Effect of exchange rate changes on cash and cash equivalents (489) — Net decrease in cash and cash equivalents $ (265,792) $ (460,456) Operating activities Operating activities consist of net income adjusted for certain non-cash items, including depreciation and amortization, non-cash lease expense, deferred income taxes, stock-based compensation expense, realized gains or losses on disposal of property and equipment, and the effect of working capital changes.
MD&A / first-half cash flows · Filed 27/08/2026
Investing activities for capital expenditures were $139.5 million during the 26 weeks ended August 1, 2026, compared to $156.0 million during the 26 weeks ended August 2, 2025.
MD&A / actual capital expenditures · Filed 27/08/2026
A summary of common stock repurchase activity is presented in the following table: 26 Weeks Ended August 1, August 2, (Dollars in millions) 2026 2025 Shares repurchased 1,438,761 1,231,292 Total cost of shares repurchased, including excise tax $ 798.6 $ 472.4 26 Table of Contents Credit facilities On August 27, 2025, we entered into Amendment No.
MD&A / actual share repurchases including excise tax · Filed 27/08/2026
As of August 1, 2026, January 31, 2026, and August 2, 2025, we had $339.6 million, $62.3 million, and $289.1 million, respectively, outstanding under our credit facilities.
MD&A / outstanding credit facility borrowings · Filed 27/08/2026
Short-term debt at the end of the second quarter of fiscal 2026 was primarily to support working capital needs and ongoing capital allocation priorities, including share repurchases.
MD&A / borrowing purposes including repurchases · Filed 27/08/2026
Merchandise inventories, net were $2.4 billion at August 1, 2026, remaining flat as compared to $2.4 billion at August 2, 2025, primarily due improved inventory management, partially offset by inventory to support new brand launches and the addition of new stores.
MD&A / inventory management outcomes · Filed 27/08/2026
● Annual Incentive Award: Awards under the annual incentive plan are tied solely to the Company’s performance relative to a full-year Earnings Before Taxes (“EBT”) metric.
Compensation Discussion and Analysis / actual annual incentive design · Filed 22/04/2026
During fiscal 2025, the Compensation Committee approved adjustments to operating income consistent with these criteria by (1) excluding expenses related to the acquisition of Space NK as well as EBT associated with Space NK’s results after its acquisition and (2) excluding expenses related to executive talent acquisition.
Compensation Discussion and Analysis / fiscal 2025 incentive adjustments · Filed 22/04/2026
In connection with this work, the Compensation Committee made the following changes to the LTIP design in 2025 intended to better align equity incentives with the Company’s ongoing transformation: o Discontinuing the use of performance-based share (“PBS”) awards: The Compensation Committee chose to discontinue the use of PBS awards because the Compensation Committee did not want to establish goals and long-term incentive opportunities that were not clearly aligned with the Company’s strategy and both near- and long-term objectives.
Compensation Discussion and Analysis / discontinued performance-based share awards · Filed 22/04/2026
1 Table of Contents Corporate Governance GOVERNANCE AT A GLANCE The Board recognizes that strong corporate governance contributes to long-term stockholder value and is committed to sound governance practices, including the following: INDEPENDENCE ● All of our director nominees, except our President and CEO, are independent ● Our non-executive Board Chair ensures strong Board independence and management accountability ● All standing Board committees are composed entirely of independent directors ● Independent directors meet regularly in executive session without management present BEST PRACTICES ● Directors may not stand for re-election after their 75th birthdays absent Board approval ● Directors may not serve on more than three other public company boards, and the Company’s CEO may not serve on more than one other public company board ● Members of the Audit Committee may not serve on the audit committees of more than two other public companies ● Directors and executives are subject to stock ownership requirements ● Directors and executives are prohibited from hedging or pledging their Company stock ACCOUNTABILITY ● All of our directors are elected annually ● In uncontested elections, directors are elected by majority vote ● The Board and each standing Board committee conducts an annual performance self-evaluation ● Stockholders have the ability to include nominees in our proxy statement (so-called “proxy access” rights) RISK OVERSIGHT ● The Board oversees the Company’s overall risk management structure ● Individual Board committees oversee certain risks related to their specific areas of responsibility ● The Company maintains a robust enterprise risk management program Board Leadership Structure The Company’s Corporate Governance Guidelines provide that the offices of the Chief Executive Officer (“CEO”) and the Chair of the Board (“Chair”) may be either combined or separated at the discretion of the Board.
Corporate Governance / existing independence, ownership and accountability practices · Filed 22/04/2026
Clawback Policy: We have adopted a clawback policy that provides for the mandatory recovery of incentive compensation in the event of a financial restatement and permits the recovery of incentive compensation in the event of other misconduct not involving financial restatements and for breaches of non-compete and other restrictive covenants.
Executive Compensation Policies and Practices / adopted clawback policy · Filed 22/04/2026
There were 68 performance stock options issued during the 26 weeks ended August 1, 2026.
Stock-based compensation / performance stock options issued · Filed 27/08/2026
Steelman, the Company’s President and Chief Executive Officer, consisting of an option to purchase 68,000 shares of our common stock (the “Option Award”), effective on March 31, 2026 (the “Grant Date”), which is subject to both achievement of stock price hurdles and a five (5)-year service vesting condition.
Other Information / CEO option award performance and service conditions · Filed 26/03/2026
Based on management’s evaluation as of August 1, 2026, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that the information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Controls and Procedures / management effectiveness conclusion · Filed 27/08/2026
The net sales increase was primarily due to increased comparable sales, the acquisition of Space NK, and sales from new stores.
MD&A / acquisition, comparable sales and new-store growth contributions · Filed 27/08/2026
As a percentage of net sales, gross profit decreased to 39.1% compared to 39.2%, primarily due to the impact of the Space NK business mix.
Second-quarter results / gross-margin effect of acquired business mix · Filed 27/08/2026
