Ulta Beauty (ULTA) 10-Q25 Aug 222022 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jul. 30, 2022	Aug. 22, 2022
Cover [Abstract]
Entity Registrant Name	ULTA BEAUTY, INC.
Document Quarterly Report	true
Document Transition Report	false
Entity Central Index Key	0001403568
Document Type	10-Q
Document Period End Date	Jul. 30, 2022
Amendment Flag	false
Current Fiscal Year End Date	--01-28
Entity File Number	001-33764
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	38-4022268
Entity Address, Address Line One	1000 Remington Blvd.
Entity Address, Address Line Two	Suite 120
Entity Address, City or Town	Bolingbrook
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60440
City Area Code	630
Local Phone Number	410-4800
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		51,221,498
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Trading Symbol	ULTA

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jul. 30, 2022	Jan. 29, 2022	Jul. 31, 2021
Current assets:
Cash and cash equivalents	$ 434,226	$ 431,560	$ 770,144
Receivables, net	180,514	233,682	154,416
Merchandise inventories, net	1,666,130	1,499,218	1,443,685
Prepaid expenses and other current assets	123,014	110,814	108,145
Prepaid income taxes	39,029	5,909	18,544
Total current assets	2,442,913	2,281,183	2,494,934
Property and equipment, net	912,017	914,476	909,507
Operating lease assets	1,509,246	1,482,256	1,470,166
Goodwill	10,870	10,870	10,870
Other intangible assets, net	1,075	1,538	2,001
Deferred compensation plan assets	33,393	38,409	36,396
Other long-term assets	36,480	35,647	30,711
Total assets	4,945,994	4,764,379	4,954,585
Current liabilities:
Accounts payable	586,851	552,730	535,257
Accrued liabilities	323,939	364,797	313,372
Deferred revenue	316,571	353,579	265,462
Current operating lease liabilities	274,693	274,118	267,442
Accrued income taxes		12,786
Total current liabilities	1,502,054	1,558,010	1,381,533
Non-current operating lease liabilities	1,582,003	1,572,638	1,585,539
Deferred income taxes	40,029	39,693	64,535
Other long-term liabilities	52,840	58,665	43,165
Total liabilities	3,176,926	3,229,006	3,074,772
Commitments and contingencies (Note 6)
Stockholders' equity:
Common stock, $0.01 par value, 400,000 shares authorized; 52,087, 53,049, and 55,160 shares issued; 51,332, 52,311, and 54,446 shares outstanding; at July 30, 2022 (unaudited), January 29, 2022, and July 31, 2021 (unaudited), respectively	521	530	551
Treasury stock-common, at cost	(59,803)	(53,478)	(44,775)
Additional paid-in capital	982,339	934,945	889,206
Retained earnings	846,011	653,376	1,034,831
Total stockholders' equity	1,769,068	1,535,373	1,879,813
Total liabilities and stockholders' equity	$ 4,945,994	$ 4,764,379	$ 4,954,585

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jul. 30, 2022	Jan. 29, 2022	Jul. 31, 2021
Consolidated Balance Sheets
Common stock, par value	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	400,000	400,000	400,000
Common stock, shares issued	52,087	53,049	55,160
Common stock, shares outstanding	51,332	52,311	54,446

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Consolidated Statements of Income (Unaudited)
Net sales	$ 2,297,113	$ 1,967,207	$ 4,643,014	$ 3,905,726
Cost of sales	1,368,949	1,169,244	2,773,824	2,353,975
Gross profit	928,164	797,963	1,869,190	1,551,751
Selling, general and administrative expenses	534,459	464,299	1,035,429	908,174
Pre-opening expenses	2,277	1,357	4,625	5,946
Operating income	391,428	332,307	829,136	637,631
Interest expense (income), net	(108)	425	293	783
Income before income taxes	391,536	331,882	828,843	636,848
Income tax expense	95,859	80,989	201,771	155,666
Net income	$ 295,677	$ 250,893	$ 627,072	$ 481,182
Net income per common share:
Basic	$ 5.73	$ 4.59	$ 12.08	$ 8.71
Diluted	$ 5.70	$ 4.56	$ 12	$ 8.66
Weighted average common shares outstanding:
Basic	51,607	54,675	51,928	55,235
Diluted	51,900	55,014	52,237	55,592

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021
Operating activities
Net income	$ 627,072	$ 481,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	123,721	139,577
Non-cash lease expense	146,251	137,521
Deferred income taxes	336	(824)
Stock-based compensation expense	22,875	19,097
Loss on disposal of property and equipment	2,277	1,703
Change in operating assets and liabilities:
Receivables	53,168	38,693
Merchandise inventories	(166,912)	(275,470)
Prepaid expenses and other current assets	(12,200)	(741)
Income taxes	(45,906)	(61,074)
Accounts payable	40,051	59,360
Accrued liabilities	(49,364)	17,858
Deferred revenue	(37,008)	(8,921)
Operating lease liabilities	(163,302)	(146,892)
Other assets and liabilities	(392)	344
Net cash provided by operating activities	540,667	401,413
Investing activities
Capital expenditures	(120,500)	(57,305)
Other investments	(1,249)
Net cash used in investing activities	(121,749)	(57,305)
Financing activities
Repurchase of common shares	(434,448)	(635,793)
Stock options exercised	24,521	22,808
Purchase of treasury shares	(6,325)	(6,974)
Net cash used in financing activities	(416,252)	(619,959)
Effect of exchange rate changes on cash and cash equivalents		(56)
Net increase (decrease) in cash and cash equivalents	2,666	(275,907)
Cash and cash equivalents at beginning of period	431,560	1,046,051
Cash and cash equivalents at end of period	434,226	770,144
Supplemental information
Cash paid for interest	1,057	1,057
Income taxes paid, net of refunds	246,641	216,831
Non-cash capital expenditures	$ 42,451	$ 18,511

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock	Treasury - Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total
Balance at Jan. 30, 2021	$ 569	$ (37,801)	$ 847,303	$ 1,189,422	$ 56	$ 1,999,549
Balance (in shares) at Jan. 30, 2021	56,952
Treasury--common stock (in shares) at Jan. 30, 2021						(692)
Increase (Decrease) in Stockholders' Equity
Net income				230,289		$ 230,289
Stock-based compensation			8,978			8,978
Foreign currency translation adjustments					(56)	(56)
Stock options exercised and other awards	$ 1		5,031			5,032
Stock options exercised and other awards (in shares)	94
Purchase of treasury shares		(6,766)				$ (6,766)
Purchase of treasury shares (in shares)						(21)
Repurchase of common shares	$ (12)			(392,297)		$ (392,309)
Repurchase of common shares (in shares)	(1,243)
Treasury--common stock (in shares) at May. 01, 2021						(713)
Balance at May. 01, 2021	$ 558	(44,567)	861,312	1,027,414		$ 1,844,717
Balance (in shares) at May. 01, 2021	55,803
Balance at Jan. 30, 2021	$ 569	(37,801)	847,303	1,189,422	$ 56	$ 1,999,549
Balance (in shares) at Jan. 30, 2021	56,952
Treasury--common stock (in shares) at Jan. 30, 2021						(692)
Increase (Decrease) in Stockholders' Equity
Net income						$ 481,182
Repurchase of common shares						$ (635,793)
Repurchase of common shares (in shares)						(1,990)
Treasury--common stock (in shares) at Jul. 31, 2021						(714)
Balance at Jul. 31, 2021	$ 551	(44,775)	889,206	1,034,831		$ 1,879,813
Balance (in shares) at Jul. 31, 2021	55,160					54,446
Balance at May. 01, 2021	$ 558	(44,567)	861,312	1,027,414		$ 1,844,717
Balance (in shares) at May. 01, 2021	55,803
Treasury--common stock (in shares) at May. 01, 2021						(713)
Increase (Decrease) in Stockholders' Equity
Net income				250,893		$ 250,893
Stock-based compensation			10,119			10,119
Stock options exercised and other awards	$ 1		17,775			17,776
Stock options exercised and other awards (in shares)	104
Purchase of treasury shares		(208)				$ (208)
Purchase of treasury shares (in shares)						(1)
Repurchase of common shares	$ (8)			(243,476)		$ (243,484)
Repurchase of common shares (in shares)	(747)
Treasury--common stock (in shares) at Jul. 31, 2021						(714)
Balance at Jul. 31, 2021	$ 551	(44,775)	889,206	1,034,831		$ 1,879,813
Balance (in shares) at Jul. 31, 2021	55,160					54,446
Balance at Jan. 29, 2022	$ 530	(53,478)	934,945	653,376		$ 1,535,373
Balance (in shares) at Jan. 29, 2022	53,049					52,311
Treasury--common stock (in shares) at Jan. 29, 2022						(738)
Increase (Decrease) in Stockholders' Equity
Net income				331,395		$ 331,395
Stock-based compensation			10,356			10,356
Stock options exercised and other awards	$ 1		6,501			6,502
Stock options exercised and other awards (in shares)	73
Purchase of treasury shares		(5,172)				$ (5,172)
Purchase of treasury shares (in shares)						(14)
Repurchase of common shares	$ (3)			(132,831)		$ (132,834)
Repurchase of common shares (in shares)	(332)
Treasury--common stock (in shares) at Apr. 30, 2022						(752)
Balance at Apr. 30, 2022	$ 528	(58,650)	951,802	851,940		$ 1,745,620
Balance (in shares) at Apr. 30, 2022	52,790
Balance at Jan. 29, 2022	$ 530	(53,478)	934,945	653,376		$ 1,535,373
Balance (in shares) at Jan. 29, 2022	53,049					52,311
Treasury--common stock (in shares) at Jan. 29, 2022						(738)
Increase (Decrease) in Stockholders' Equity
Net income						$ 627,072
Repurchase of common shares						$ (434,448)
Repurchase of common shares (in shares)						(1,130)
Treasury--common stock (in shares) at Jul. 30, 2022						(755)
Balance at Jul. 30, 2022	$ 521	(59,803)	982,339	846,011		$ 1,769,068
Balance (in shares) at Jul. 30, 2022	52,087					51,332
Balance at Apr. 30, 2022	$ 528	(58,650)	951,802	851,940		$ 1,745,620
Balance (in shares) at Apr. 30, 2022	52,790
Treasury--common stock (in shares) at Apr. 30, 2022						(752)
Increase (Decrease) in Stockholders' Equity
Net income				295,677		$ 295,677
Stock-based compensation			12,519			12,519
Stock options exercised and other awards	$ 1		18,018			18,019
Stock options exercised and other awards (in shares)	95
Purchase of treasury shares		(1,153)				$ (1,153)
Purchase of treasury shares (in shares)						(3)
Repurchase of common shares	$ (8)			(301,606)		$ (301,614)
Repurchase of common shares (in shares)	(798)
Treasury--common stock (in shares) at Jul. 30, 2022						(755)
Balance at Jul. 30, 2022	$ 521	$ (59,803)	$ 982,339	$ 846,011		$ 1,769,068
Balance (in shares) at Jul. 30, 2022	52,087					51,332

Business and basis of presentat

Business and basis of presentation	6 Months Ended
Business and basis of presentation	Jul. 30, 2022
Business and basis of presentation
Business and basis of presentation	1. Business and basis of presentation Ulta Beauty, Inc. was founded in 1990 to operate specialty retail stores selling cosmetics, fragrance, haircare and skincare products, and related accessories and services. The stores also feature full-service salons. As used in these notes and throughout this Quarterly Report on Form 10-Q, all references to “we,” “us,” “our,” “Ulta Beauty,” or the “Company” refer to Ulta Beauty, Inc. and its consolidated subsidiaries. As of July 30, 2022, the Company operated 1,325 stores across 50 states, as shown in the table below. Number of Number of Location stores Location stores Alabama 24 Montana 6 Alaska 3 Nebraska 5 Arizona 31 Nevada 16 Arkansas 11 New Hampshire 8 California 165 New Jersey 44 Colorado 26 New Mexico 7 Connecticut 19 New York 52 Delaware 3 North Carolina 40 Florida 91 North Dakota 4 Georgia 43 Ohio 45 Hawaii 4 Oklahoma 21 Idaho 9 Oregon 16 Illinois 55 Pennsylvania 45 Indiana 24 Rhode Island 4 Iowa 11 South Carolina 24 Kansas 13 South Dakota 3 Kentucky 15 Tennessee 28 Louisiana 18 Texas 120 Maine 3 Utah 15 Maryland 28 Vermont 1 Massachusetts 23 Virginia 32 Michigan 49 Washington 36 Minnesota 19 West Virginia 7 Mississippi 11 Wisconsin 20 Missouri 25 Wyoming 3 Total 1,325 The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and the U.S. Securities and Exchange Commission’s Article 10, Regulation S-X. These financial statements were prepared on a consolidated basis to include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts, transactions, and unrealized profit were eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to fairly state the financial position and results of operations and cash flows for the interim periods presented. The Company’s business is subject to seasonal fluctuation, with significant portions of net sales and net income being realized during the fourth quarter of the fiscal year due to the holiday selling season. The results for the 13 and 26 weeks ended July 30, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending January 28, 2023, or for any other future interim period or for any future year, in particular as a result of the uncertainty around the continuing effects of the COVID-19 pandemic, geo-political events, and inflationary cost pressures on future periods. These unaudited interim consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended January 29, 2022. All amounts are stated in thousands, with the exception of per share amounts and number of stores.

Summary of significant accounti

Summary of significant accounting policies	6 Months Ended
Summary of significant accounting policies	Jul. 30, 2022
Summary of significant accounting policies
Summary of significant accounting policies	2. Summary of significant accounting policies Information regarding significant accounting policies is contained in Note 2, “Summary of significant accounting policies,” to the consolidated financial statements in the Annual Report on Form 10-K for the year ended January 29, 2022. Presented below and in the following notes is supplemental information that should be read in conjunction with “Notes to Consolidated Financial Statements” in the Annual Report. Fiscal quarter The Company’s quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31. The second quarter in fiscal 2022 and 2021 ended on July 30, 2022 and July 31, 2021, respectively. Use of estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the accounting period. Actual results could differ from those estimates. The Company considers its accounting policies relating to inventory valuations, vendor allowances, impairment of long-lived tangible and right-of-use assets, loyalty program and income taxes to be the most significant accounting policies that involve management estimates and judgments. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment, including those related to the impacts of the COVID-19 pandemic, geo-political events, and inflationary cost pressures, will be reflected in the consolidated financial statements in future periods.

Revenue

Revenue	6 Months Ended
Revenue	Jul. 30, 2022
Revenue
Revenue	3 . Revenue Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue. Other revenue includes the private label and co-branded credit card programs, royalties derived from the partnership with Target, and deferred revenue related to the loyalty program and gift card breakage. Disaggregated revenue The following table sets forth the approximate percentage of net sales by primary category: 13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (Percentage of net sales) 2022 2021 2022 2021 Cosmetics 42% 43% 43% 44% Haircare products and styling tools 22% 21% 21% 20% Skincare 17% 17% 17% 18% Fragrance and bath 12% 12% 12% 11% Services 4% 4% 4% 4% Accessories and other 3% 3% 3% 3% 100% 100% 100% 100% Deferred revenue Deferred revenue primarily represents contract liabilities for the obligation to transfer additional goods or services to a guest for which the Company has received consideration, such as unredeemed Ultamate Rewards loyalty points and unredeemed Ulta Beauty gift cards. In addition, breakage on gift cards is recognized proportionately as redemption occurs. The following table provides a summary of the changes included in deferred revenue during the 13 and 26 weeks ended July 30, 2022 and July 31, 2021: 13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (In thousands) 2022 2021 2022 2021 Beginning balance $ 312,359 $ 253,172 $ 345,206 $ 269,032 Additions to contract liabilities (1) 101,904 91,824 213,678 183,929 Deductions to contract liabilities (2) (108,350) (88,769) (252,971) (196,734) Ending balance $ 305,913 $ 256,227 $ 305,913 $ 256,227 (1) Loyalty points and gift cards issued in the current period but not redeemed or expired. (2) Revenue recognized in the current period related to the beginning liability. Other amounts included in deferred revenue were $10,658 and $9,235 at July 30, 2022 and July 31, 2021, respectively.

Goodwill and other intangible a

Goodwill and other intangible assets	6 Months Ended
Goodwill and other intangible assets	Jul. 30, 2022
Goodwill and Other Intangible Assets
Goodwill and other intangible assets	4. Goodwill and other intangible assets Goodwill, which represents the excess of cost over the fair value of net assets acquired, was $10,870 at July 30, 2022, January 29, 2022, and July 31, 2021. No additional goodwill was recognized during the 13 and 26 weeks ended July 30, 2022. The recoverability of goodwill is reviewed annually during the fourth quarter or more frequently if an event occurs or circumstances change that would indicate that impairment may exist. Other definite-lived intangible assets are amortized over their useful lives. The recoverability of intangible assets is reviewed whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.

Leases

Leases	6 Months Ended
Leases	Jul. 30, 2022
Leases
Leases	5. Leases The Company leases retail stores, distribution centers, fast fulfillment centers, corporate offices, and certain equipment under non-cancelable operating leases with various expiration dates through 2034. All leases are classified as operating leases and generally have initial lease terms of 10 years and, when determined applicable, include renewal options under substantially the same terms and conditions as the original leases. Leases do not contain any material residual value guarantees or material restrictive covenants. Lease cost The majority of operating lease cost relates to retail stores, distribution centers, and fast fulfillment centers and is classified within cost of sales. Operating lease cost for corporate offices is classified within selling, general and administrative expenses. Operating lease cost from the control date through store opening date is classified within pre-opening expenses. The following table presents a summary of operating lease costs: 13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (In thousands) 2022 2021 2022 2021 Operating lease cost $ 79,094 $ 76,776 $ 159,995 $ 155,512 Other information The following table presents supplemental disclosures of cash flow information related to operating leases: 26 Weeks Ended July 30, July 31, (In thousands) 2022 2021 Cash paid for operating lease liabilities (1) $ 189,938 $ 182,161 Operating lease assets obtained in exchange for operating lease liabilities (non-cash) 173,241 103,073 (1) Excludes $13,363 and $16,923 related to cash received for tenant incentives for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

Commitments and contingencies

Commitments and contingencies	6 Months Ended
Commitments and contingencies	Jul. 30, 2022
Commitments and contingencies
Commitments and contingencies	6. Commitments and contingencies The Company is involved in various legal proceedings that are incidental to the conduct of the business including both class action and single plaintiff litigation. In the opinion of management, the amount of any liability with respect to these proceedings, either individually or in the aggregate, will not have a material adverse effect on the consolidated financial position, results of operations or cash flows.

Debt

Debt	6 Months Ended
Debt	Jul. 30, 2022
Debt
Debt	7. Debt On March 11, 2020, the Company entered into Amendment No. 1 to the Second Amended and Restated Loan Agreement (as so amended, the Loan Agreement) with Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent and a Lender thereunder; Wells Fargo Bank, National Association and JPMorgan Chase Bank, N.A., as Lead Arrangers and Bookrunners; JPMorgan Chase Bank, N.A., as Syndication Agent and a Lender; PNC Bank, National Association, as Documentation Agent and a Lender; and the other lenders party thereto. The Loan Agreement matures on March 11, 2025, provides maximum revolving loans equal to the lesser of $1,000,000 or a percentage of eligible owned inventory and eligible owned receivables (which borrowing base may, at the election of the Company and satisfaction of certain conditions, include a percentage of qualified cash), contains a $50,000 subfacility for letters of credit and allows the Company to increase the revolving facility by an additional $100,000, subject to the consent by each lender and other conditions. The Loan Agreement contains a requirement to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 during such periods when availability under the Loan Agreement falls below a specified threshold. Substantially all of the Company’s assets are pledged as collateral for outstanding borrowings under the Loan Agreement. Outstanding borrowings bear interest, at the Company’s election, at either a base rate plus a margin of 0% to 0.125% or the London Interbank Offered Rate plus a margin of 1.125% to 1.250%, with such margins based on the Company’s borrowing availability, and the unused line fee is 0.20% per annum. As of July 30, 2022, January 29, 2022, and July 31, 2021, there were no borrowings outstanding under the credit facility. As of July 30, 2022, the Company was in compliance with all terms and covenants of the Loan Agreement.

Fair value measurements

Fair value measurements	6 Months Ended
Fair value measurements	Jul. 30, 2022
Fair value measurements
Fair value measurements	8. Fair value measurements The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates their estimated fair values due to the short maturities of these instruments. Fair value is measured using inputs from the three levels of the fair value hierarchy, which are described as follows: ● Level 1 – observable inputs such as quoted prices for identical instruments in active markets. ● Level 2 – inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data. ● Level 3 – unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions. As of July 30, 2022, January 29, 2022, and July 31, 2021, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $36,071, $40,839, and $38,077, respectively. The liabilities are categorized as Level 2 as they are based on third-party reported values, which are based primarily on quoted market prices of underlying assets of the funds within the plan.

Stock-based compensation

Stock-based compensation	6 Months Ended
Stock-based compensation	Jul. 30, 2022
Stock-based compensation
Stock-based compensation	9. Stock-based compensation Stock-based compensation expense is measured on the grant date based on the fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period for awards expected to vest. The estimated grant date fair value of stock options was determined using a Black-Scholes valuation model using the following weighted-average assumptions: 26 Weeks Ended July 30, July 31, 2022 2021 Volatility rate 49.0% 46.9% Average risk-free interest rate 2.4% 0.4% Average expected life (in years) 3.4 3.9 Dividend yield None None The expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is based on the United States Treasury yield curve in effect on the date of grant for the respective expected life of the option. The expected life represents the time the options granted are expected to be outstanding. The expected life of options granted is derived from historical data on Ulta Beauty stock option exercises. Forfeitures of stock options are estimated at the grant date based on historical rates of stock option activity and reduce the stock-based compensation expense recognized. The Company does not currently pay a regular dividend. The Company granted 48 and 61 stock options during the 26 weeks ended July 30, 2022 and July 31, 2021, respectively. Stock-based compensation expense for stock options was $2,164 and $3,101 for the 13 weeks ended July 30, 2022 and July 31, 2021, respectively. Stock-based compensation expense for stock options was $4,506 and $5,998 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively. The weighted-average grant date fair value of these stock options was $149.14 and $109.72 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively. At July 30, 2022, there was approximately $13,822 of unrecognized stock-based compensation expense related to unvested stock options. There were 56 and 58 restricted stock units issued during the 26 weeks ended July 30, 2022 and July 31, 2021, respectively. Stock-based compensation expense for restricted stock units was $4,987 and $5,149 for the 13 weeks ended July 30, 2022 and July 31, 2021, respectively. Stock-based compensation expense for restricted stock units was $9,439 and $9,984 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively. At July 30, 2022, there was approximately $32,535 of unrecognized stock-based compensation expense related to restricted stock units. There were 37 and 46 performance-based restricted stock units issued during the 26 weeks ended July 30, 2022 and July 31, 2021, respectively. Stock-based compensation expense for performance-based restricted stock units was $5,368 and $1,869 for the 13 weeks ended July 30, 2022 and July 31, 2021, respectively. Stock-based compensation expense for performance-based restricted stock units was $8,930 and $3,115 for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively. At July 30, 2022, there was approximately $29,861 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

Income taxes

Income taxes	6 Months Ended
Income taxes	Jul. 30, 2022
Income Taxes
Income taxes	10. Income taxes Income tax expense reflects the federal statutory tax rate and the weighted average state statutory tax rate for the states in which the Company operates stores. Income tax expense of $95,859 for the 13 weeks ended July 30, 2022 represents an effective tax rate of 24.5%, compared to $80,989 of tax expense representing an effective tax rate of 24.4% for the 13 weeks ended July 31, 2021. Income tax expense of $201,771 for the 26 weeks ended July 30, 2022 represents an effective tax rate of 24.3%, compared to $155,666 of tax expense representing an effective tax rate of 24.4% for the 26 weeks ended July 31, 2021.

Net income per common share

Net income per common share	6 Months Ended
Net income per common share	Jul. 30, 2022
Net income per common share
Net income per common share	11. Net income per common share The following is a reconciliation of net income 13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (In thousands, except per share data) 2022 2021 2022 2021 Numerator: Net income $ 295,677 $ 250,893 $ 627,072 $ 481,182 Denominator: Weighted-average common shares – Basic 51,607 54,675 51,928 55,235 Dilutive effect of stock options and non-vested stock 293 339 309 357 Weighted-average common shares – Diluted 51,900 55,014 52,237 55,592 Net income per common share: Basic $ 5.73 $ 4.59 $ 12.08 $ 8.71 Diluted $ 5.70 $ 4.56 $ 12.00 $ 8.66 The denominator for diluted net income per common share for the 13 weeks ended July 30, 2022 and July 31, 2021 excludes 67 and 152 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects. The denominator for diluted net income per common share for the 26 weeks ended July 30, 2022 and July 31, 2021 excludes 125 and 207 employee stock options and restricted stock units, respectively, due to their anti-dilutive effects. Outstanding performance-based restricted stock units are included in the computation of dilutive shares only to the extent that the underlying performance conditions are satisfied prior to the end of the reporting period or would be considered satisfied if the end of the reporting period were the end of the related contingency period and the results would be dilutive under the treasury stock method.

Share repurchase program

Share repurchase program	6 Months Ended
Share repurchase program	Jul. 30, 2022
Share repurchase program
Share repurchase program	12. Share repurchase program In March 2020, the Board of Directors authorized a share repurchase program (the 2020 Share Repurchase Program) pursuant to which the Company could repurchase up to $1,600,000 of the Company’s common stock. The 2020 Share Repurchase Program authorization revoked the previously authorized but unused amount of $177,805 from the earlier share repurchase program. The 2020 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time. In March 2022, the Board of Directors authorized a new share repurchase program (the 2022 Share Repurchase Program) pursuant to which the Company may repurchase up to $2,000,000 of the Company’s common stock. The 2022 Share Repurchase Program revokes the previously authorized but unused amounts from the 2020 Share Repurchase Program. The 2022 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time. A summary of common stock repurchase activity is presented in the following table: 26 Weeks Ended July 30, July 31, (In thousands) 2022 2021 Shares repurchased 1,130 1,990 Total cost of shares repurchased $ 434,448 $ 635,793

Summary of significant accoun_2

Summary of significant accounting policies (Policies)	6 Months Ended
Summary of significant accounting policies (Policies)	Jul. 30, 2022
Summary of significant accounting policies
Fiscal quarter	Fiscal quarter The Company’s quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31. The second quarter in fiscal 2022 and 2021 ended on July 30, 2022 and July 31, 2021, respectively.
Use of estimates	Use of estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the accounting period. Actual results could differ from those estimates. The Company considers its accounting policies relating to inventory valuations, vendor allowances, impairment of long-lived tangible and right-of-use assets, loyalty program and income taxes to be the most significant accounting policies that involve management estimates and judgments. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment, including those related to the impacts of the COVID-19 pandemic, geo-political events, and inflationary cost pressures, will be reflected in the consolidated financial statements in future periods.
Recent adopted accounting pronouncements

Business and basis of present_2

Business and basis of presentation (Tables)	6 Months Ended
Business and basis of presentation (Tables)	Jul. 30, 2022
Business and basis of presentation
Schedule of stores operated by geographic area	Number of Number of Location stores Location stores Alabama 24 Montana 6 Alaska 3 Nebraska 5 Arizona 31 Nevada 16 Arkansas 11 New Hampshire 8 California 165 New Jersey 44 Colorado 26 New Mexico 7 Connecticut 19 New York 52 Delaware 3 North Carolina 40 Florida 91 North Dakota 4 Georgia 43 Ohio 45 Hawaii 4 Oklahoma 21 Idaho 9 Oregon 16 Illinois 55 Pennsylvania 45 Indiana 24 Rhode Island 4 Iowa 11 South Carolina 24 Kansas 13 South Dakota 3 Kentucky 15 Tennessee 28 Louisiana 18 Texas 120 Maine 3 Utah 15 Maryland 28 Vermont 1 Massachusetts 23 Virginia 32 Michigan 49 Washington 36 Minnesota 19 West Virginia 7 Mississippi 11 Wisconsin 20 Missouri 25 Wyoming 3 Total 1,325

Revenue (Tables)

Revenue (Tables)	6 Months Ended
Revenue (Tables)	Jul. 30, 2022
Revenue
Schedule of approximate percentage of net sales by primary category	The following table sets forth the approximate percentage of net sales by primary category: 13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (Percentage of net sales) 2022 2021 2022 2021 Cosmetics 42% 43% 43% 44% Haircare products and styling tools 22% 21% 21% 20% Skincare 17% 17% 17% 18% Fragrance and bath 12% 12% 12% 11% Services 4% 4% 4% 4% Accessories and other 3% 3% 3% 3% 100% 100% 100% 100%
Summary of changes in deferred revenue	13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (In thousands) 2022 2021 2022 2021 Beginning balance $ 312,359 $ 253,172 $ 345,206 $ 269,032 Additions to contract liabilities (1) 101,904 91,824 213,678 183,929 Deductions to contract liabilities (2) (108,350) (88,769) (252,971) (196,734) Ending balance $ 305,913 $ 256,227 $ 305,913 $ 256,227 (1) Loyalty points and gift cards issued in the current period but not redeemed or expired. (2) Revenue recognized in the current period related to the beginning liability.

Leases (Tables)

Leases (Tables)	6 Months Ended
Leases (Tables)	Jul. 30, 2022
Leases
Summary of information related to lease costs for operating leases	The following table presents a summary of operating lease costs: 13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (In thousands) 2022 2021 2022 2021 Operating lease cost $ 79,094 $ 76,776 $ 159,995 $ 155,512
Schedule of cash flow information related to operating leases	The following table presents supplemental disclosures of cash flow information related to operating leases: 26 Weeks Ended July 30, July 31, (In thousands) 2022 2021 Cash paid for operating lease liabilities (1) $ 189,938 $ 182,161 Operating lease assets obtained in exchange for operating lease liabilities (non-cash) 173,241 103,073 (1) Excludes $13,363 and $16,923 related to cash received for tenant incentives for the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

Stock-based compensation (Table

Stock-based compensation (Tables)	6 Months Ended
Stock-based compensation (Tables)	Jul. 30, 2022
Stock-based compensation
Schedule of weighted average assumptions to determine grant date fair value of employee stock options	26 Weeks Ended July 30, July 31, 2022 2021 Volatility rate 49.0% 46.9% Average risk-free interest rate 2.4% 0.4% Average expected life (in years) 3.4 3.9 Dividend yield None None

Net income per common share (Ta

Net income per common share (Tables)	6 Months Ended
Net income per common share (Tables)	Jul. 30, 2022
Net income per common share
Schedule reconciliation of net income and the number of shares of common stock used in the computation of net income per basic and diluted common share	13 Weeks Ended 26 Weeks Ended July 30, July 31, July 30, July 31, (In thousands, except per share data) 2022 2021 2022 2021 Numerator: Net income $ 295,677 $ 250,893 $ 627,072 $ 481,182 Denominator: Weighted-average common shares – Basic 51,607 54,675 51,928 55,235 Dilutive effect of stock options and non-vested stock 293 339 309 357 Weighted-average common shares – Diluted 51,900 55,014 52,237 55,592 Net income per common share: Basic $ 5.73 $ 4.59 $ 12.08 $ 8.71 Diluted $ 5.70 $ 4.56 $ 12.00 $ 8.66

Share repurchase program (Table

Share repurchase program (Tables)	6 Months Ended
Share repurchase program (Tables)	Jul. 30, 2022
Share repurchase program
Summary of the Company's common stock repurchase activity	A summary of common stock repurchase activity is presented in the following table: 26 Weeks Ended July 30, July 31, (In thousands) 2022 2021 Shares repurchased 1,130 1,990 Total cost of shares repurchased $ 434,448 $ 635,793

Business and basis of present_3

Business and basis of presentation (Details)	Jul. 30, 2022 store state
Stores by state
Number of stores operated	1,325
Number of states in which entity operates \| state	50
Alabama
Stores by state
Number of stores operated	24
Alaska
Stores by state
Number of stores operated	3
Arizona
Stores by state
Number of stores operated	31
Arkansas
Stores by state
Number of stores operated	11
California
Stores by state
Number of stores operated	165
Colorado
Stores by state
Number of stores operated	26
Connecticut
Stores by state
Number of stores operated	19
Delaware
Stores by state
Number of stores operated	3
Florida
Stores by state
Number of stores operated	91
Georgia
Stores by state
Number of stores operated	43
Hawaii
Stores by state
Number of stores operated	4
Idaho
Stores by state
Number of stores operated	9
Illinois
Stores by state
Number of stores operated	55
Indiana
Stores by state
Number of stores operated	24
Iowa
Stores by state
Number of stores operated	11
Kansas
Stores by state
Number of stores operated	13
Kentucky
Stores by state
Number of stores operated	15
Louisiana
Stores by state
Number of stores operated	18
Maine
Stores by state
Number of stores operated	3
Maryland
Stores by state
Number of stores operated	28
Massachusetts
Stores by state
Number of stores operated	23
Michigan
Stores by state
Number of stores operated	49
Minnesota
Stores by state
Number of stores operated	19
Mississippi
Stores by state
Number of stores operated	11
Missouri
Stores by state
Number of stores operated	25
Montana
Stores by state
Number of stores operated	6
Nebraska
Stores by state
Number of stores operated	5
Nevada
Stores by state
Number of stores operated	16
New Hampshire
Stores by state
Number of stores operated	8
New Jersey
Stores by state
Number of stores operated	44
New Mexico
Stores by state
Number of stores operated	7
New York
Stores by state
Number of stores operated	52
North Carolina
Stores by state
Number of stores operated	40
North Dakota
Stores by state
Number of stores operated	4
Ohio
Stores by state
Number of stores operated	45
Oklahoma
Stores by state
Number of stores operated	21
Oregon
Stores by state
Number of stores operated	16
Pennsylvania
Stores by state
Number of stores operated	45
Rhode Island
Stores by state
Number of stores operated	4
South Carolina
Stores by state
Number of stores operated	24
South Dakota
Stores by state
Number of stores operated	3
Tennessee
Stores by state
Number of stores operated	28
Texas
Stores by state
Number of stores operated	120
Utah
Stores by state
Number of stores operated	15
Vermont
Stores by state
Number of stores operated	1
Virginia
Stores by state
Number of stores operated	32
Washington
Stores by state
Number of stores operated	36
West Virginia
Stores by state
Number of stores operated	7
Wisconsin
Stores by state
Number of stores operated	20
Wyoming
Stores by state
Number of stores operated	3

Summary of significant accoun_3

Summary of significant accounting policies (Details)	3 Months Ended
Summary of significant accounting policies (Details)	Jul. 30, 2022	Jul. 31, 2021
Summary of significant accounting policies
Fiscal quarter	91 days	91 days

Revenue - Disaggregated revenue

Revenue - Disaggregated revenue (Details) - Sales Revenue - Product concentration	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Disaggregated revenue
Concentration (as a percent)	100%	100%	100%	100%
Cosmetics
Disaggregated revenue
Concentration (as a percent)	42%	43%	43%	44%
Haircare products and styling tools
Disaggregated revenue
Concentration (as a percent)	22%	21%	21%	20%
Skincare
Disaggregated revenue
Concentration (as a percent)	17%	17%	17%	18%
Fragrance and bath
Disaggregated revenue
Concentration (as a percent)	12%	12%	12%	11%
Services
Disaggregated revenue
Concentration (as a percent)	4%	4%	4%	4%
Accessories and other
Disaggregated revenue
Concentration (as a percent)	3%	3%	3%	3%

Revenue - Deferred revenue (Det

Revenue - Deferred revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Summary of changes in deferred revenue
Balance at beginning of period	$ 312,359	$ 253,172	$ 345,206	$ 269,032
Additions to contract liabilities	101,904	91,824	213,678	183,929
Deductions to contract liabilities	(108,350)	(88,769)	(252,971)	(196,734)
Balance at end of period	305,913	256,227	305,913	256,227
Other amounts included in deferred revenue	$ 10,658	$ 9,235	$ 10,658	$ 9,235

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 30, 2022	Jul. 30, 2022	Jan. 29, 2022	Jul. 31, 2021
Goodwill and Other Intangible Assets
Goodwill	$ 10,870	$ 10,870	$ 10,870	$ 10,870
Additional goodwill recognized	$ 0	$ 0

Leases - Lease cost and Other i

Leases - Lease cost and Other information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Leases
Initial lease term	10 years		10 years
Operating lease cost	$ 79,094	$ 76,776	$ 159,995	$ 155,512
Cash paid for operating lease liabilities			189,938	182,161
Operating lease assets obtained in exchange for operating lease liabilities (non-cash)			173,241	103,073
Excluded cash received for tenant incentives			$ 13,363	$ 16,923

Debt (Details)

Debt (Details) $ in Thousands	6 Months Ended
Debt (Details) $ in Thousands	Jul. 30, 2022 USD ($)	Jan. 29, 2022 USD ($)	Jul. 31, 2021 USD ($)
Revolving Credit Facility
Notes payable
Outstanding borrowings under credit facility	$ 0	$ 0	$ 0
Amendment No. 1 to the Second Amended and Restated Loan Agreement
Notes payable
Unused line fee (as a percent)	0.20%
Amendment No. 1 to the Second Amended and Restated Loan Agreement \| Minimum
Notes payable
Fixed charge coverage ratio covenant	1
Amendment No. 1 to the Second Amended and Restated Loan Agreement \| London Interbank Offered Rate (LIBOR) \| Minimum
Notes payable
Interest rate margin (as a percent)	1.125%
Amendment No. 1 to the Second Amended and Restated Loan Agreement \| London Interbank Offered Rate (LIBOR) \| Maximum
Notes payable
Interest rate margin (as a percent)	1.25%
Amendment No. 1 to the Second Amended and Restated Loan Agreement \| Base Rate \| Minimum
Notes payable
Interest rate margin (as a percent)	0%
Amendment No. 1 to the Second Amended and Restated Loan Agreement \| Base Rate \| Maximum
Notes payable
Interest rate margin (as a percent)	0.125%
Amendment No. 1 to the Second Amended and Restated Loan Agreement \| Revolving Credit Facility
Notes payable
Maximum borrowing capacity	$ 1,000,000
Contingent increase to revolving facility	100,000
Amendment No. 1 to the Second Amended and Restated Loan Agreement \| Letters of credit
Notes payable
Maximum borrowing capacity	$ 50,000

Fair value measurements (Detail

Fair value measurements (Details) - USD ($) $ in Thousands	Jul. 30, 2022	Jan. 29, 2022	Jul. 31, 2021
Fair Value, Inputs, Level 2 \| Non-qualified deferred compensation plan
Fair value measurements
Fair value of financial liabilities	$ 36,071	$ 40,839	$ 38,077

Stock-based compensation - Assu

Stock-based compensation - Assumptions to Estimate Fair Value of Stock Options (Details) - Stock options	6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021
Weighted-average assumptions to estimate fair value
Volatility rate (as a percent)	49%	46.90%
Average risk-free interest rate (as a percent)	2.40%	0.40%
Average expected life	3 years 4 months 24 days	3 years 10 months 24 days
Dividend yield (as a percent)	0%	0%

Stock-based compensation - Stoc

Stock-based compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Share-based compensation
Weighted-average grant date fair value (in dollars per share)			$ 149.14	$ 109.72
Stock options
Stock compensation expense	$ 2,164	$ 3,101	$ 4,506	$ 5,998
Unrecognized compensation expense	$ 13,822		$ 13,822
Number of options
Granted (in shares)			48	61

Stock-based compensation - Rest

Stock-based compensation - Restricted Stock Units (Details) - Restricted stock units - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Restricted stock units
Unrecognized compensation cost	$ 32,535		$ 32,535
Stock compensation expense	$ 4,987	$ 5,149	$ 9,439	$ 9,984
Number of shares
Granted (in shares)			56	58

Stock-based compensation - Perf

Stock-based compensation - Performance-based Restricted Stock Units (Details) - Performance Based Restricted Stock Units - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Performance-based restricted stock units
Unrecognized compensation cost	$ 29,861		$ 29,861
Stock compensation expense	$ 5,368	$ 1,869	$ 8,930	$ 3,115
Number of shares
Granted (in shares)			37	46

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income taxes (Details) - USD ($) $ in Thousands	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Income taxes
Income tax expense	$ 95,859	$ 80,989	$ 201,771	$ 155,666
Effective tax rate (as a percent)	24.50%	24.40%	24.30%	24.40%

Net income per common share - R

Net income per common share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Numerator:
Net income	$ 295,677	$ 250,893	$ 627,072	$ 481,182
Denominator:
Weighted-average common shares - Basic	51,607	54,675	51,928	55,235
Dilutive effect of stock options and non-vested stock	293	339	309	357
Weighted-average common shares - Diluted	51,900	55,014	52,237	55,592
Net income per common share:
Basic	$ 5.73	$ 4.59	$ 12.08	$ 8.71
Diluted	$ 5.70	$ 4.56	$ 12	$ 8.66

Net income per common share - A

Net income per common share - Anti-dilutive Shares (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 30, 2022	Jul. 31, 2021	Jul. 30, 2022	Jul. 31, 2021
Net income per common share
Employee stock options and restricted stock units excluded from the computation of net income per common share	67	152	125	207

Share repurchase program (Detai

Share repurchase program (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 30, 2022	Apr. 30, 2022	Jul. 31, 2021	May 01, 2021	Jul. 30, 2022	Jul. 31, 2021	Mar. 31, 2022	Mar. 12, 2020
Share repurchase program
Shares repurchased (in shares)					1,130	1,990
Common stock repurchased and retired	$ 301,614	$ 132,834	$ 243,484	$ 392,309	$ 434,448	$ 635,793
2020 Share Repurchase Program
Share repurchase program
Authorized amount of share repurchase program								$ 1,600,000
Remaining authorized amount from earlier share repurchase program								$ 177,805
2022 Share Repurchase Program
Share repurchase program
Authorized amount of share repurchase program							$ 2,000,000