Ulta Beauty (ULTA) Economic Moat Analysis—

Evidence

​ Ulta U.S. operates more than 1,500 retail stores in the U.S., located predominantly in convenient, high-traffic locations such as power strip centers.

Business — U.S. store footprint · Filed 26/03/2026

In the fiscal year ended January 31, 2026 (“fiscal 2025”), 73% of Ulta U.S.’s loyalty members transacted solely within stores.

Business — loyalty members' store purchasing behavior · Filed 26/03/2026

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 — brand relationships and exclusive products · Filed 26/03/2026

Key points of strategic differentiation include: a differentiated assortment of established and emerging brands across a variety of categories and price points; our convenient omnichannel footprint, offering products and delivering immersive and personalized experiences through our stores and digital platforms, and providing the Ulta Beauty experience internationally through our partnerships; our best-in-class loyalty program that enables members to earn points for products and beauty services and provides us with a deep understanding of our customers and their preferences; and our ability to cultivate human connection with warm and welcoming guest experiences across all of our channels.

MD&A — management's claimed strategic differentiation · Filed 27/08/2026

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

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.

Risk factors — top-ten brand partner concentration · Filed 26/03/2026

Any of our brand partners could in the future decide to scale back or end their partnerships with us and strengthen their relationships with our competitors, which could negatively impact the revenue we earn from the sale of such products.

Risk factors — potential changes in brand partnerships · Filed 26/03/2026

We maintain a customer loyalty program, Ulta Beauty Rewards®, which allows members to earn points based on purchases of merchandise or services.

Accounting policies — loyalty points earned on purchases · 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 — future redemption rights · Filed 26/03/2026

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

MD&A — fiscal 2023 other revenue and loyalty redemptions · Filed 27/03/2025

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 — second-quarter and first-half 2026 operating results · 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 2026 comparable sales and average ticket · Filed 27/08/2026

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

MD&A — fiscal 2023 promotions, mix and prior price benefits · Filed 27/03/2025

May 2, 2026 was driven by a 3.7% increase in average ticket and a 1.6% increase in transactions.

MD&A — first-quarter 2026 average ticket and transaction growth · 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 sales, expenses and net income · Filed 26/03/2026

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.

Liquidity — first-half 2026 cash flows · 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.

Capital allocation — first-half share repurchases · 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.

Liquidity — 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.

Liquidity — purposes of short-term debt · 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 — 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.

Compensation discussion — 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 — discontinuation of performance-based share awards · Filed 22/04/2026

The use of stock options and RSUs emphasizes long-term alignment with stockholder value, as stock options will not have any value unless our share price increases and RSUs will not vest unless the executive is still employed by the Company upon the 3-year cliff vesting of the award.

Compensation discussion — options and RSU vesting · 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 — independence, elections and ownership policies · 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.

Compensation practices — adopted clawback policy · Filed 22/04/2026

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's effectiveness conclusion · Filed 27/08/2026

Publication history

Sources

• filing-1 · Filed 26/03/2026
• filing-2 · Filed 27/08/2026
• filing-3 · Filed 22/04/2026
• filing-4 · Filed 27/03/2025
• filing-5 · Filed 26/03/2024
• filing-6 · Filed 02/06/2026