AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 31/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Assortment breadth, services and certain exclusive offerings support current differentiation, while positive comparable sales demonstrate demand. However, uniqueness is management's characterization, supply access lacks long-term agreements, and the catalog does not demonstrate replication barriers or superior comparative economics. The structural case remains mixed.
durability · 1/4 · Permanent or temporary exclusivity provides some differentiated access, but the absence of long-term supply agreements leaves its persistence dependent on relationships. The top ten partners supplied approximately 51% of fiscal 2025 net sales. These actual arrangements support fragile durability without implying that partner departures have occurred.
customer dependency · 1/4 · Points valid for at least one year and redeemable on future purchases create a modest return incentive. They establish a customer benefit rather than operational dependency or a substantial migration burden. Transaction growth supports demand indirectly, but does not identify repeat customers or quantify switching friction.
erosion resilience · 2/4 · Positive comparable sales in both reported fiscal 2026 quarters and higher first-half operating income support current resilience. Historical promotional pressure and uncontracted supplier access constrain the conclusion. The improvement is demonstrated, but neither margin recovery nor short-period sales growth establishes durable resistance to competitive erosion.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Fiscal 2023 disclosures identify lapping prior price-increase benefits alongside higher promotional activity and category-mix pressure. First-quarter fiscal 2026 average ticket rose 3.7% and transactions 1.6%, but ticket does not isolate price. Observed outcomes are mixed; sustained premium acceptance is not demonstrated.
retention · 2/4 · Future rewards rights, historical loyalty redemptions and first-quarter fiscal 2026 transaction growth support engagement and repeat-demand incentives indirectly. These are not cohort-retention measurements. Native Checkout's anonymous orders and lack of automatic rewards linkage limit integration in that channel without establishing a company-wide retention failure.
margin resilience · 2/4 · For the 26 weeks ended August 1, 2026, gross margin improved to 39.6% from 39.1% and operating margin to 13.4% from 13.2%. Lower shrink aided first-quarter results; second-quarter gross margin declined with Space NK mix. Historical promotional pressure and nonprice drivers support a mixed assessment.
contractual freedom · 3/4 · Consumer terms retrieved October 24, 2026 permit price changes without notice, different channel prices and cancellation or customer consultation for understated prices. These demonstrate strong transactional pricing discretion within the disclosed scope. They do not establish supplier-term freedom or customers' willingness to accept higher prices.
Predictability99
5 consecutive published 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
- observedAnnualPeriods
- 5.00
Financial strength88
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, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. 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. An original fully reconciled nonnegative liability partition proves the existing endpoint grade across every permitted borrowing amount and original rounding interval. The bounded component does not estimate a debt amount or leverage ratio.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 53.08
- borrowingLowerBound
- 62.29
- borrowingUpperBound
- 394.51
- Current ratio (x)
- 1.41
- cashInterestPaid
- 9.67
- cashInterestCoverage
- 155.36
Capital allocation96
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, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; 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. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Return grade is exactly 100: the minimum three-year average pretax return exceeds 25% even with all reported liabilities as the upper borrowing bound and every input within its original stated accuracy. Exact debt and return percentages remain unknown; no ROIC percentage is imputed. Does not establish acquisition quality or buyback timing.
- operatingReturnGrade
- 100.00
- 3-year average dilution (%)
- -4.45
- 3-year average SBC / revenue (%)
- 0.37
- cashConversionGrade
- 84.30
- operatingReturnLowerBound
- 30.48
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half fiscal 2026 operating cash flow of $381.6 million exceeded $139.5 million of capital expenditure. Repurchases cost $798.6 million including excise tax, while quarter-end short-term debt was $339.6 million, supporting working capital and allocation priorities including repurchases. Observable spending and financing are mixed; investment returns and buyback value creation remain unproven.
incentive alignment · 2/4 · Actual EBT-linked incentives, executive ownership guidelines, compliance among sufficiently tenured NEOs and an adopted clawback support alignment. Fiscal 2025 adjustments excluded acquisition-related items and executive talent-acquisition expenses, adding discretion. These disclosed mechanisms support a mixed assessment without proving exceptional pay-for-performance outcomes or universal ownership compliance.
execution · 2/4 · Positive comparable sales in both reported fiscal 2026 quarters, higher first-half operating income and flat year-over-year inventories during store and assortment expansion show recent progress. Attribution to management is partly indirect, and improved inventory management is management's explanation. The limited period does not demonstrate sustained execution superiority.
governance · 2/4 · Independent committees, a nonexecutive chair, annual elections, majority voting, proxy access and clawback provisions provide concrete oversight mechanisms. Shareholders approved officer-exculpation and exclusive-forum amendments on June 9, 2026, limiting some accountability avenues. The arrangements are mixed; exceptional oversight effectiveness is not established by their existence.
Evidence
We have no long-term supply agreements with brand partners, so our success depends on maintaining good relationships with them.
2026-03-26 filed Form 10-K; brand-partner supply agreements · Filed 26/03/2026
During fiscal 2025 and fiscal 2024, merchandise supplied by our top ten brand partners accounted for approximately 51% and 54% of our net sales, respectively.
2026-03-26 filed Form 10-K; fiscal 2025 and fiscal 2024 supplier concentration · Filed 26/03/2026
Loyalty program
We maintain a customer loyalty program, Ulta Beauty Rewards®, which allows members to earn points based on purchases of merchandise or services.
2026-03-26 filed Form 10-K; loyalty-program purchase points · Filed 26/03/2026
Points earned are valid for at least one year.
2026-03-26 filed Form 10-K; 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.
2026-03-26 filed Form 10-K; loyalty rights and future redemption · Filed 26/03/2026
We developed a unique specialty retail concept that offers a broad range of brands and price points, select beauty services, and a convenient and welcoming shopping environment.
2025-03-27 filed Form 10-K; retail concept and assortment · Filed 27/03/2025
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.
2025-03-27 filed Form 10-K; brand relationships and permanent or temporary exclusivity · Filed 27/03/2025
Gross profit as a percentage of net sales decreased 50 basis points to 39.1% in fiscal 2023 compared to 39.6% in fiscal 2022.
2025-03-27 filed Form 10-K; fiscal 2023 versus fiscal 2022 gross margin · Filed 27/03/2025
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.
2025-03-27 filed Form 10-K; fiscal 2023 gross-margin drivers, promotions, prior price increases and loyalty redemptions · Filed 27/03/2025
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.
2026-08-27 filed Form 10-Q; cash flows for 26 weeks ended August 1, 2026 and August 2, 2025, in thousands · Filed 27/08/2026
A summary of common stock repurchase activity is presented in the following table:
26 Weeks Ended
August 1,
August 2,
(In thousands)
2026
2025
Shares repurchased
1,439
1,231
Total cost of shares repurchased, including excise tax
$
798,633
$
472,371
16
Table of Contents
13.
2026-08-27 filed Form 10-Q; repurchases for 26 weeks ended August 1, 2026 and August 2, 2025, including excise tax, in thousands · Filed 27/08/2026
Consolidated Statements of Income
(In thousands, except per share data)
26 Weeks Ended
August 1,
August 2,
2026
2025
(Unaudited)
Net sales
$
6,199,533
100.0%
$
5,636,836
100.0%
Cost of sales
3,744,961
60.4%
3,430,921
60.9%
Gross profit
2,454,572
39.6%
2,205,915
39.1%
Selling, general and administrative expenses
1,617,483
26.1%
1,452,350
25.8%
Pre-opening expenses
9,192
0.1%
6,934
0.1%
Operating income
827,897
13.4%
746,631
13.2%
Interest expense (income), net
3,032
0.0%
(4,960)
(0.1%)
Income before income taxes and equity net loss of affiliate
824,865
13.3%
751,591
13.3%
Income tax expense
2026-08-27 filed earnings exhibit; consolidated income statement for 26 weeks ended August 1, 2026 and August 2, 2025, unaudited, in thousands except per-share data · 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.
2026-08-27 filed earnings exhibit; second-quarter fiscal 2026 versus fiscal 2025 gross-margin mix effect · Filed 27/08/2026
During the first six months of fiscal 2026, the Company invested $139.5 million in capital expenditures to support new stores, relocations, remodels, and investments in information technology.
2026-08-27 filed earnings exhibit; first-six-month fiscal 2026 capital expenditures · Filed 27/08/2026
Short-term debt at the end of the second quarter of fiscal 2026 was $339.6 million, primarily to support working capital needs and ongoing capital allocation priorities, including share repurchases.
2026-08-27 filed earnings exhibit; second-quarter fiscal 2026 ending short-term debt and uses · Filed 27/08/2026
Merchandise inventories, net at the end of the second quarter of fiscal 2026 were $2.4 billion, remaining flat compared to the prior year primarily due to improved inventory management, partially offset by inventory to support new brand launches and the addition of new stores.
2026-08-27 filed earnings exhibit; second-quarter fiscal 2026 ending inventories and management's explanation · Filed 27/08/2026
●
Comparable sales increased 5.3%, driven by a 3.7% increase in average ticket and a 1.6% increase in transactions.
2026-06-02 filed earnings exhibit; first-quarter fiscal 2026 comparable sales, average ticket and transactions · Filed 02/06/2026
As a percentage of net sales, gross profit increased to 40.1% compared to 39.1%, primarily due to lower inventory shrink and higher merchandise margin.
2026-06-02 filed earnings exhibit; first-quarter fiscal 2026 versus fiscal 2025 gross-margin drivers · Filed 02/06/2026
●
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.
2026-04-22 filed proxy; annual incentive EBT metric · 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.
2026-04-22 filed proxy; approved fiscal 2025 incentive adjustments · Filed 22/04/2026
The Compensation Committee has established the following share ownership guidelines to strengthen the focus of our senior officers on our long-term goals and further align their interests with those of our stockholders:
Position
Required Amount
CEO
6X Base Salary
Other NEOs
3X Base Salary
Non-NEO Chief-level officers
2X Base Salary
In addition to shares held directly, shares of common stock held in brokerage accounts for the executive’s benefit in trust, through tax qualified retirement plans, PBSs (which have been earned based on performance, but which are still subject to time vesting and the TSR modifier), and RSUs are included in determining whether the ownership requirement has been met and sustained.
2026-04-22 filed proxy; executive ownership guidelines and qualifying holdings · Filed 22/04/2026
All NEOs who have been in role for at least five years are in compliance with our share ownership guidelines.
2026-04-22 filed proxy; ownership compliance for NEOs in role at least five years · Filed 22/04/2026
Under the Clawback Policy, if the Company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements under the securities laws, we will be required to recover from current and former executive officers any excess of (1) the amount of any incentive compensation received during the three years preceding the date that the Company is required to prepare such restatement over (2) the amount of any such incentive compensation that would have been received had it been determined based on the restated amounts, computed without regard to any taxes paid, unless the Compensation Committee determines that such recovery would be impracticable.
2026-04-22 filed proxy; adopted clawback-policy recovery provisions · Filed 22/04/2026
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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
2026-04-22 filed proxy; board independence, elections, ownership restrictions and oversight · Filed 22/04/2026
At the Annual Meeting, the Company’s stockholders approved amendments to the Company’s certificate of incorporation, as amended (the “Certificate of Incorporation”), to (i) provide for the exculpation of certain officers of the Company against personal liability, to the extent permitted by the Delaware General Corporation Law (the “Exculpation Amendment”), and (ii) add exclusive forum provisions that designate that courts located in Delaware will be the exclusive forum for certain legal actions and that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Forum Selection Amendment”).
2026-06-09 filed Form 8-K; shareholder-approved officer-exculpation and forum-selection amendments · Filed 09/06/2026
●
Comparable sales increased 3.8%.
●
Gross profit increased 8.7% to $1.2 billion.
2026-08-27 filed earnings exhibit; second-quarter fiscal 2026 comparable sales and gross-profit growth · Filed 27/08/2026
Price and availability information contained on this site is subject to change without notice.
Consumer terms retrieved 2026-10-24; site price and availability changes; publication date unspecified · Retrieved 24/10/2026
If the correct price of an item sold by Ulta Beauty is higher than our stated price, we will at our discretion, either contact your for instructions before shipping or cancel your order.
Consumer terms retrieved 2026-10-24; discretion over orders with understated prices; publication date unspecified · Retrieved 24/10/2026
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 retrieved 2026-10-24; channel pricing differences and mobile checkout confirmation; publication date unspecified · Retrieved 24/10/2026
Transactions in the Native Checkout experience are processed as anonymous guest orders.
Consumer terms retrieved 2026-10-24; Native Checkout anonymous guest-order scope; publication date unspecified · Retrieved 24/10/2026
They do not automatically create an Ulta Beauty account, link to an existing Ulta Beauty Rewards® account or program, or provide access to prior order history on the Sites.
Consumer terms retrieved 2026-10-24; Native Checkout account and rewards-linkage limitations; publication date unspecified · Retrieved 24/10/2026
