Financial Analysis

6. Commitments and contingencies The Company is involved in various legal proceedings that are incidental to the conduct of its 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 Companys consolidated financial position, results of operations, or cash flows. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

7. Debt On August 27, 2025, the Company entered into Amendment No. 4 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; and the other lenders party thereto. The Loan Agreement matures on March 13, 2029, 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), and contains a $50,000 subfacility for letters of credit. The Loan Agreement contains a requirement to maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 whenever availability under the Loan Agreement falls below a specified threshold. Substantially all of the Companys assets are pledged as collateral for outstanding borrowings under the Loan Agreement. Outstanding borrowings bear interest, at the Companys election, at either a base rate plus a margin of 0.5% to 1.0% or the Term Secured Overnight Financing Rate plus a margin of 1.5% to 2.0%, and a credit spread adjustment of 0.10%, with such margins based on the Companys borrowing availability. The unused line fee is 0.25% to …

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13 Weeks Ended May 2, May 3, (Percentage of net sales) 2026 2025 Cosmetics 40% 40% Skincare and wellness 24% 25% Haircare 18% 18% Fragrance 12% 11% Services 4% 4% Other 2% 2% 100% 100% …

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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 for the periods indicated: 13 Weeks Ended May 2, May 3, 2026 2025 Volatility rate 34.0% 34.0% Average risk-free interest rate 3.8% 3.9% Average expected life (in years) 3.4 3.4 Dividend yield The expected volatility is based on the historical volatility of the Companys 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 108 and 129 stock options during the 13 weeks ended May 2, 2026 and May 3, 2025, respectively. Stock-based compensation expense for stock options was $1,774 and $3,039 for the 13 weeks ended May …

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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. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analyses of goodwill, other intangible assets, and long-lived tangible assets. These involve fair value measurements on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. The fair value of other intangible assets, net was valued under the relief from royalty method, which is equal to the present value of the after-tax royalty savings attributable to owning the intangible assets as opposed to paying a third party for its use. The fair value measurement was based on significant unobservable inputs (level 3) developed using company-specific information. The key assumptions in applying the relief from royalty method include the applic …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

4. Goodwill and other intangible assets Goodwill Goodwill represents the excess of cost over the fair value of net assets acquired. 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. The changes in the carrying amounts of goodwill during the 13 weeks ended May 2, 2026 and May 3, 2025 were as follows: May 2, May 3, (In thousands) 2026 2025 Beginning balance $ 226,421 $ 10,870 Acquisitions Effect of exchange rate changes (1,793) Ending balance $ 224,628 $ 10,870 Other intangible assets Intangible assets with definite lives are amortized over their useful lives. The recoverability of definite-lived intangible assets is reviewed whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Intangible assets with indefinite lives, which primarily consist of trademarks, are not amortized but instead evaluated for impairment annually or more frequently if events or circumstances indicate that the intangible asset might be impaired. This analysis is dependent upon a number of uncertain factors and is typically performed in conjunction with the goodwill impairment analysis discussed above and is similar to the analysis performed at acquisition. The changes in the carrying amounts of other intangible assets during the 13 weeks ended May 2, 2026 and May 3, 2025 were as follows: May 2, May 3, (In thousand …

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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 $106,860 for the 13 weeks ended May 2, 2026 represents an effective tax rate of 23.9%, compared to $99,644 of income tax expense representing an effective tax rate of 24.6% for the 13 weeks ended May 3, 2025. The lower effective tax rate is primarily due to the purchase of transferable federal tax credits. These federal tax credits were purchased at a negotiated discount, resulting in an income tax benefit recorded during the quarter.

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5. Leases The Company leases retail stores, distribution centers, fast fulfillment centers, market fulfillment centers, corporate offices, and certain equipment under non-cancelable operating leases with various expiration dates through 2041. 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, fast fulfillment centers, and market 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 May 2, May 3, (In thousands) 2026 2025 Operating lease cost $ 104,372 $ 93,466 Other information The following table presents supplemental disclosures of cash flow information related to operating leases: 13 Weeks Ended May 2, May 3, (In thousands) 2026 2025 Cash paid for operating lease liabilities (1) $ 115,473 $ 106,017 Operating lease assets obtained in exchange for operating lease liabilities (non-cash) 128,956 140,069 (1) Exclu …

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3. Revenue Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue. Other revenue includes other revenue sources such as the private label and co-branded credit card programs, deferred revenue related to the loyalty program and gift card breakage, royalties, and commissions. Disaggregated revenue The following table sets forth the approximate percentage of net sales by primary category: 13 Weeks Ended May 2, May 3, (Percentage of net sales) 2026 2025 Cosmetics 40% 40% Skincare and wellness 24% 25% Haircare 18% 18% Fragrance 12% 11% Services 4% 4% Other 2% 2% 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 loyalty points and unredeemed 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 weeks ended May 2, 2026 and May 3, 2025: 13 Weeks Ended May 2, May 3, (In thousands) 2026 2025 Beginning balance $ 574,035 $ 492,907 Additions to contract liabilities (1) 167,485 164,054 Deductions to contract liabilities (2) (209,956) (201,701) Ending balance $ 531,564 $ 455,260 (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 …

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13. Segment reporting The Company has one reportable segment, which includes retail stores, salon services, and e-commerce. Within the reportable segment, there are significant expense categories included in the measure of the segments net income as shown below: 13 Weeks Ended May 2, May 3, (In thousands) 2026 2025 Net sales $ 3,163,857 $ 2,848,367 Less: Cost of sales (1) 1,896,237 1,734,148 Associate expenses (2) 438,018 387,150 Advertising expense, net (3) 93,055 90,609 Pre-opening expenses 4,665 1,829 Other segment expenses (1) (4) 283,626 232,854 Interest income, net (652) (3,547) Income tax expense 106,860 99,644 Equity net loss of affiliate 1,579 628 Net income $ 340,469 $ 305,052 (1) Included within cost of sales and other segment expenses is depreciation and amortization expense of $81,399 and $72,033 for the 13 weeks ended May 2, 2026 and May 3, 2025, respectively. (2) Associate expenses include salaries, wages, bonuses, and other forms of compensation related to associates. (3) Advertising expense, net consists of print, digital and social media, and television and radio advertising, net of vendor income that is a reimbursement of specific, incremental, and identifiable costs. (4) Other segment expenses include other corporate overhead and store operating expenses within SG&A expenses. …

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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 31, 2026. 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 Companys quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31 each year. The first quarters of fiscal 2026 and 2025 ended on May 2, 2026 and May 3, 2025, 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, impairment of goodwill and other intangible assets, loyalty program, income taxes, and business combinations to be the most significant accounting policies that involve management estimates and judgments. S …

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12. Share repurchase program In October 2024, the Board of Directors authorized a share repurchase program (the October 2024 Share Repurchase Program) pursuant to which the Company may repurchase up to $3,000,000 of the Companys common stock. The October 2024 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the share repurchase program that was authorized in March 2024. The October 2024 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: 13 Weeks Ended May 2, May 3, (In thousands) 2026 2025 Shares repurchased 958 987 Total cost of shares repurchased, including excise tax $ 560,338 $ 362,090 …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing