8-K
Ulta Beauty, Inc. (ULTA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 11, 2021
ULTA BEAUTY, INC.
(Exact name of registrant as specified in its charter)
| | | |
|---|---|---|
| Delaware | 001-33764 | 38-4022268 |
| (State or Other Jurisdictionof Incorporation) | (CommissionFile Number) | (IRS EmployerIdentification No.) |
| | | |
| | 1000 Remington Blvd. , Suite 120 , Bolingbrook , Illinois **** 60440 | |
| | (Address of Principal Executive Offices and zip code) | |
( 630 ) 410-4800
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| | |
|---|---|
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. §240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. §240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | |
|---|---|---|---|---|
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| Common Stock, par value $0.01 per share | | ULTA | | The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On March 11, 2021, Ulta Beauty, Inc. issued a press release regarding its consolidated financial results for the fourth quarter ended January 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The exhibit listed in the Exhibit Index below is being furnished herewith.
| Exhibit No. | Description | |
|---|---|---|
| 99.1 | | Press release issued by Ulta Beauty, Inc. on March 11, 2021 announcing consolidated financial results for the fourth quarter ended January 30, 2021. |
| 104 | | Cover Page Interactive Data File (the cover page tags are embedded within the Inline XBRL document) |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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|---|---|---|
| | ULTA BEAUTY, INC. | |
| | | |
| Date: March 11, 2021 | By: | /s/ Jodi J. Caro |
| | | Jodi J. Caro |
| | | General Counsel, Chief Compliance Officer &<br><br>Corporate Secretary |
3
Exhibit 99.1
ULTA BEAUTY ANNOUNCES FOURTH QUARTER FISCAL 2020 RESULTS
Net Sales of $2.2 billion compared to $2.3 billion in the year-ago quarter
Comparable Sales decreased (4.8)%
Net income of $171.5 million or $3.03 per diluted share
Adjusted net income of $193.4 million or $3.41 adjusted per diluted share
Bolingbrook, IL – March 11, 2021 – Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period (“Fourth Quarter”) and fifty-two-week period (“Fiscal Year”) ended January 30, 2021 compared to the same periods ended February 1, 2020. During the fourth quarter of fiscal 2020, the Company recorded long-lived asset impairment and restructuring related costs, primarily related to the suspension of the Company’s Canadian expansion and employee severance costs, which reduced reported operating income by $30.4 million and net income by $23.0 million, or $0.40 per diluted share. A reconciliation of non-GAAP financial measures to the respective GAAP measures is included in this release.
“The Ulta Beauty team delivered better-than-expected results for the fourth quarter. Strong, enterprise-wide execution of our plans, combined with improving trends in consumer demand, resulted in solid results across multiple metrics, including sales, transactions and profitability,” said Mary Dillon, chief executive officer. “I want to express my sincere appreciation to all Ulta Beauty associates for their continued flexibility, collaboration and unwavering commitment to our guests and each other.”
“Fiscal 2020 was a difficult year, and I am proud of how our teams navigated the unprecedented challenges with agility and purpose,” continued Dillon. “We begin fiscal 2021 with a strong foundation in place and good operational momentum. We are strategically investing in our business to drive further market share gains, and, as separately announced today, we are beginning to execute a thoughtful succession plan that ensures we continue to benefit from strong, experienced leadership for the next chapter of growth. I remain excited about the long-term opportunity for Ulta Beauty, and I am confident we will continue to shape and lead the beauty industry for many years to come.”
COVID-19 Response and Impact
The Company’s financial results continue to be impacted by the COVID-19 pandemic.
On March 19, 2020, Ulta Beauty temporarily closed all stores in response to the spread of COVID-19. On April 19, 2020, the Company introduced curbside pickup, and on May 11, 2020, the Company started a phased store reopening process. By July 20, 2020, the full fleet of Ulta Beauty stores was operational and by January 30, 2021, salon and brow services had resumed in all stores.
During fiscal 2020, the Company incurred incremental operating costs related to COVID-19 of approximately $188 million and recorded a $52.4 million reduction of selling, general and administrative (SG&A) expenses as a result of the employee retention credits made available under the Coronavirus Aid, Relief and Economic Security Act (CARES Act).
For the Fourth Quarter of Fiscal 2020
| ● | Net sales decreased 4.6% to $2.2 billion compared to $2.3 billion in the fourth quarter of fiscal 2019 due to the impact of COVID-19. |
|---|---|
| ● | Comparable sales (sales for stores open at least 14 months, including stores temporarily closed due to COVID-19, and e-commerce sales) decreased 4.8% compared to an increase of 4.0% in the fourth quarter of fiscal 2019. In the fourth quarter of fiscal 2020, transactions declined 12.2%, and average ticket increased 8.3%. |
| --- | --- |
| ● | Gross profit decreased 4.4% to $771.0 million compared to $806.9 million in the fourth quarter of fiscal 2019. As a percentage of net sales, gross profit increased to 35.1% compared to 35.0% in the fourth quarter of fiscal 2019, primarily due to improvement in merchandise margins driven by lower promotional activity and enhanced merchandising strategies, partially offset by channel mix shifts and deleverage in fixed costs due to lower sales. |
| --- | --- |
| ● | SG&A expenses decreased to $514.1 million compared to $515.5 million in the fourth quarter of fiscal 2019. As a percentage of net sales, SG&A expenses increased to 23.4% compared to 22.4% in the fourth quarter of fiscal 2019, primarily due higher marketing expenses, higher corporate overhead expenses, personal protective equipment (PPE) and COVID-related expenses, and the deleverage of variable store expenses due to lower sales, partially offset by leverage related to the store payroll and benefits. |
| --- | --- |
| ● | Impairment, restructuring and other costs of $30.4 million includes $13.2 million related to the suspension of the planned expansion to Canada, $10.0 million due to employee severance costs, $5.6 million lease termination costs related to the permanent closure of 19 stores, and $1.5 million due to the impairment of tangible long-lived assets and operating lease assets associated with certain retail stores. |
| --- | --- |
| ● | Pre-opening expenses decreased to $2.2 million compared to $3.6 million in the fourth quarter of fiscal 2019 due to current quarter real estate activity and stores expected to open in the first quarter of fiscal 2021. Real estate activity in the fourth quarter of fiscal 2020 included two new stores and two relocations compared to 13 new stores and two relocations in the fourth quarter of fiscal 2019. |
| --- | --- |
| ● | Operating income decreased to $224.3 million, or 10.2% of net sales, compared to $287.8 million, or 12.5% of net sales, in the fourth quarter of fiscal 2019. Adjusted operating income was $254.7 million, or 11.6% of net sales. |
| --- | --- |
| ● | Tax rate increased to 23.4% compared to 22.7% in the fourth quarter of fiscal 2019. The higher effective tax rate is primarily due to less investment tax credits received. |
| --- | --- |
| ● | Net income was $171.5 million compared to $222.7 million in the fourth quarter of fiscal 2019. Adjusted net income was $193.4 million compared to $219.5 million in the fourth quarter of fiscal 2019. |
| --- | --- |
| ● | Diluted earnings per share was $3.03 compared to $3.89 in the fourth quarter of fiscal 2019. Adjusted diluted earnings per share was $3.41 compared to $3.83 in the fourth quarter of fiscal 2019. |
| --- | --- |
For the Full Year of Fiscal 2020
| ● | Net sales decreased 16.8% to $6.2 billion compared to $7.4 billion in fiscal 2019 due to the impact of COVID-19. |
|---|---|
| ● | Comparable sales decreased 17.9% compared to an increase of 5.0% in fiscal 2019. During fiscal 2020, transactions declined 24.5%, and average ticket increased 8.8%. |
| --- | --- |
| ● | Gross profit decreased to $1.9 billion compared to $2.7 billion in fiscal 2019. As a percentage of net sales, gross profit decreased to 31.7% compared to 36.2% in the fiscal 2019, primarily due to channel mix shifts and the deleverage of fixed costs and salon services due to the impact of lower sales. These pressures were partially offset by lower promotional activity. |
| --- | --- |
| ● | SG&A expenses decreased to $1.6 billion compared to $1.8 billion in fiscal 2019. As a percentage of net sales, SG&A expenses increased to 25.7% compared to 23.8% in fiscal 2019, primarily due to higher corporate overhead expenses, PPE and COVID-related expenses, and the deleverage of store payroll and benefits, marketing and variable store expenses due to the impact of lower sales. These increases were partially offset by leverage related to the employee retention credits made available under the CARES Act. |
| --- | --- |
| ● | Impairment, restructuring and other costs of $114.3 million includes $41.9 million due to the impairment of tangible long-lived assets and operating lease assets associated with certain retail stores, $29.1 million related to the suspension of the planned expansion to Canada, $27.5 million related to the permanent closure of 19 stores, and $15.8 million due to employee severance costs. |
| --- | --- |
| ● | Pre-opening expenses decreased to $15.0 million compared to $19.3 million in fiscal 2019 due to current year real estate activity and stores expected to open in the first quarter of fiscal 2021. Real estate activity in fiscal 2020 included 30 new stores and five relocations compared to 86 new stores, 12 remodels, and eight relocations in fiscal 2019. |
| --- | --- |
| ● | Operating income decreased to $236.8 million, or 3.9% of net sales, compared to $901.1 million, or 12.1% of net sales, in fiscal 2019. Adjusted operating income was $352.5 million, or 5.7% of net sales. |
| --- | --- |
| ● | Tax rate increased to 23.9% compared to 22.1% in fiscal 2019. The higher effective tax rate is primarily due to less investment tax credits received and tax expense from the income tax accounting for share-based compensation compared to a benefit in fiscal 2019. |
| --- | --- |
| ● | Net income was $175.8 million compared to $705.9 million in fiscal 2019. Adjusted net income was $264.0 million compared to $688.3 million in fiscal 2019. |
| --- | --- |
| ● | Diluted earnings per share was $3.11 compared to $12.15 in fiscal 2019. Adjusted diluted earnings per share was $4.66 compared to $11.85 in fiscal 2019. |
| --- | --- |
Balance Sheet
The Company ended fiscal 2020 with $1.0 billion in cash and cash equivalents.
Merchandise inventories, net at the end of fiscal 2020 totaled $1.2 billion compared to $1.3 billion at the end of fiscal 2019. The decrease in total inventory was primarily driven by reduced store inventory due to a decline in traffic trends. Average inventory per store decreased 10.4% compared to fiscal 2019.
Share Repurchase Program
During the fourth quarter of 2020, the Company repurchased 147,824 shares of its common stock at a cost of $41.9 million. During fiscal 2020, the Company repurchased 474,794 shares of its common stock at a cost of $114.9 million. As of January 30, 2021, $1.5 billion remained available under the $1.6 billion share repurchase program announced in March 2020.
Store Update
During the fourth quarter of fiscal 2020, the Company opened two stores located in East Rutherford, NJ and Eden Prairie, MN. The Company ended fiscal 2020 with 1,264 stores and square footage of 13,291,838.
Fiscal 2021 Outlook
“We are encouraged by the momentum we are seeing in store traffic trends,” continued Dillon. “Although our visibility as to when demand will fully recover is limited, we are confident our business will continue to strengthen in fiscal 2021, as COVID-19 vaccines become more accessible.”
For fiscal 2021, the Company plans to:
| ● | open approximately 40 net new stores and execute approximately 21 remodel or relocation projects; |
|---|---|
| ● | achieve net revenues of between $7.2 billion and $7.3 billion; |
| --- | --- |
| ● | achieve comparable sales growth of approximately 15% to 17%; |
| --- | --- |
| ● | expand operating margin to approximately 9% of sales, driven by gross margin expansion; |
| --- | --- |
| ● | deliver diluted earnings per share in the range of $8.85 to $9.30, including the impact of approximately $850 million in share repurchases and assuming an effective tax rate of 24.8%; |
| --- | --- |
| ● | incur capital expenditures between $200 million and $250 million; and |
| --- | --- |
| ● | incur depreciation and amortization expense between $270 million and $280 million. |
| --- | --- |
Non-GAAP Financial Information
In this press release, the Company provides information regarding adjusted operating income, adjusted net income, and adjusted diluted earnings per share, which are not recognized terms under U.S. generally accepted accounting principles (GAAP) and do not purport to be alternatives to operating income, net income, and diluted earnings per share as measures of operating performance. A reconciliation of adjusted operating income, adjusted net income, and adjusted diluted earnings per share is provided in this release. The Company believes the presentation of these non-GAAP financial measures provides additional information on comparisons between periods by excluding certain items that affect overall comparability and provides investors with enhanced visibility into its results with respect to the impact of certain costs. Non-GAAP financial measures should be considered in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP.
Conference Call Information
A conference call to discuss fourth quarter of fiscal 2020 results is scheduled for today, March 11, 2021, at 5:00 p.m. Eastern Time / 4:00 p.m. Central Time. Investors and analysts interested in participating in the call are invited to dial (877) 705-6003. The conference call will also be webcast live at http://ir.ultabeauty.com. A replay of the webcast will remain available for 90 days. A replay of the conference call will be available until 11:59 p.m. ET on March 25, 2021 and can be accessed by dialing (844) 512-2921 and entering conference ID number 13716611.
About Ulta Beauty
At Ulta Beauty (NASDAQ: ULTA), the possibilities are beautiful. Ulta Beauty is the largest U.S. beauty retailer and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products and salon services. In 1990, the Company reinvented the beauty retail experience by offering a new way to shop for beauty – bringing together all things beauty, all in one place. Today, Ulta Beauty has grown to become the top national retailer offering the complete beauty experience.
Ulta Beauty was recently added to the Bloomberg Gender Equality Index, which tracks the financial performance of public companies committed to supporting gender equality through policy development, representation and transparency. More information about Ulta Beauty’s corporate responsibility efforts can be found at http://ir.ultabeauty.com/Corporate-Responsibility/.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect the company’s current views with respect to, among other things, future events and financial performance. These statements can be identified by the use of forward-looking words such as “outlook,” “believes,” “expects,” “plans,” “estimates,” “targets,” “strategies” or other comparable words. Any forward-looking statements contained in this press release are based upon the company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the company or any other person that the future plans, estimates, targets, strategies or expectations contemplated by the company will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation:
| ● | The negative impacts the coronavirus (COVID-19) has had, and will continue to have, on the company’s business, financial condition, profitability, cash flows and supply chain, as well as consumer spending (including future uncertain impacts); |
|---|---|
| ● | epidemics, pandemics like COVID-19 or natural disasters that have and could continue to negatively impact the company’s sales; |
| --- | --- |
| ● | changes in the overall level of consumer spending and volatility in the economy, including as a result of the COVID-19 pandemic; |
| --- | --- |
| ● | a decline in operating results that has and may continue to lead to asset impairment and store closures charges; |
| --- | --- |
| ● | the company’s ability to sustain its growth plans and successfully implement its long-range strategic and financial plan; |
| --- | --- |
| ● | the company’s ability to gauge beauty trends and react to changing consumer preferences in a timely manner; |
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| ● | the possibility that the company may be unable to compete effectively in its highly competitive markets; |
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| ● | the company’s ability to execute its Efficiencies for Growth cost optimization program; |
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| ● | the possibility that cybersecurity breaches and other disruptions could compromise the company’s information or result in the unauthorized disclosure of confidential information; |
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| ● | the possibility of material disruptions to the company’s information systems; |
| --- | --- |
| ● | the possibility that the capacity of the company’s distribution and order fulfillment infrastructure and the performance of its newly opened and to be opened distribution centers may not be adequate to support its recent growth and expected future growth plans; |
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| ● | changes in the wholesale cost of the company’s products; |
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| ● | the possibility that new store openings and existing locations may be impacted by developer or co-tenant issues; |
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| ● | the company’s ability to attract and retain key executive personnel; |
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| ● | the company’s ability to successfully execute its common stock repurchase program or implement future common stock repurchase programs; and |
| --- | --- |
| ● | other risk factors detailed in the company’s public filings with the Securities and Exchange Commission (the SEC), including risk factors contained in its Annual Report on Form 10-K for the fiscal year ended February 1, 2020, as such were amended and supplemented in the Company’s Quarterly Report of Form 10-Q for the quarterly period ended May 2, 2020, and which may be further amended or supplemented in its subsequently filed Quarterly Reports on Form 10-Q. |
| --- | --- |
The company’s filings with the SEC are available at www.sec.gov. Except to the extent required by the federal securities laws, the Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contacts:
Kiley Rawlins, CFA
Vice President, Investor Relations
krawlins@ulta.com
(331) 757-2206
Patrick Flaherty
Senior Manager, Investor Relations
pflaherty@ulta.com
(331) 253-3521
Media Contact:
Eileen Ziesemer
Vice President, Public Relations
eziesemer@ulta.com
(708) 305-4479
Exhibit 1
Ulta Beauty, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | 13 Weeks Ended | ||||||||
| | | January 30, | | February 1, | ||||||
| | | 2021 | | 2020 | ||||||
| | | (Unaudited) | | (Unaudited) | ||||||
| Net sales | | $ | 2,198,701 | | 100.0% | | $ | 2,305,918 | | 100.0% |
| Cost of sales | | 1,427,673 | 64.9% | | | 1,499,033 | 65.0% | |||
| Gross profit | | | 771,028 | | 35.1% | | | 806,885 | | 35.0% |
| | | | | | | | | | | |
| Selling, general and administrative expenses | | | 514,140 | | 23.4% | | | 515,542 | | 22.4% |
| Impairment, restructuring and other costs | | | 30,398 | | 1.4% | | | — | | 0.0% |
| Pre-opening expenses | | | 2,218 | | 0.1% | | | 3,587 | | 0.2% |
| Operating income | | | 224,272 | | 10.2% | | | 287,756 | | 12.5% |
| Interest expense (income), net | | | 463 | | 0.0% | | | (439) | | (0.0)% |
| Income before income taxes | | | 223,809 | | 10.2% | | | 288,195 | | 12.5% |
| Income tax expense | | | 52,315 | | 2.4% | | | 65,476 | | 2.8% |
| Net income | | $ | 171,494 | | 7.8% | | $ | 222,719 | | 9.7% |
| | | | | | | | | | | |
| Net income per common share: | | | | | | | | | | |
| Basic | | $ | 3.04 | | | | $ | 3.91 | | |
| Diluted | | $ | 3.03 | | | | $ | 3.89 | | |
| | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | |
| Basic | | | 56,341 | | | | | 56,992 | | |
| Diluted | | | 56,682 | | | | | 57,195 | | |
Exhibit 2
Ulta Beauty, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | 52 Weeks Ended | ||||||||
| | | January 30, | | February 1, | ||||||
| | | 2021 | | 2020 | ||||||
| | | (Unaudited) | | | ||||||
| Net sales | | $ | 6,151,953 | | 100.0% | | $ | 7,398,068 | | 100.0% |
| Cost of sales | | | 4,202,794 | | 68.3% | | | 4,717,004 | | 63.8% |
| Gross profit | | 1,949,159 | | 31.7% | | | 2,681,064 | | 36.2% | |
| | | | | | | | | | | |
| Selling, general and administrative expenses | | | 1,583,017 | | 25.7% | | | 1,760,716 | 23.8% | |
| Impairment, restructuring and other costs | | | 114,322 | | 1.9% | | | — | 0.0% | |
| Pre-opening expenses | | | 15,000 | | 0.2% | | | 19,254 | | 0.3% |
| Operating income | | | 236,820 | | 3.9% | | | 901,094 | | 12.1% |
| Interest expense (income), net | | | 5,735 | | 0.1% | | | (5,056) | | (0.1)% |
| Income before income taxes | | | 231,085 | | 3.8% | | | 906,150 | | 12.2% |
| Income tax expense | | | 55,250 | | 0.9% | | | 200,205 | | 2.7% |
| Net income | | $ | 175,835 | | 2.9% | | $ | 705,945 | | 9.5% |
| | | | | | | | | | | |
| Net income per common share: | | | | | | | | | | |
| Basic | | $ | 3.12 | | | | $ | 12.21 | | |
| Diluted | | $ | 3.11 | | | | $ | 12.15 | | |
| | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | |
| Basic | | | 56,351 | | | | | 57,840 | | |
| Diluted | | | 56,558 | | | | | 58,105 | | |
Exhibit 3
Ulta Beauty, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | | January 30, | | February 1, | | ||
| | | 2021 | | 2020 | | ||
| | | (Unaudited) | | | | | |
| Assets | **** | | | | | ||
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 1,046,051 | | $ | 392,325 | |
| Short-term investments | | | — | | | 110,000 | |
| Receivables, net | | | 193,109 | | | 139,337 | |
| Merchandise inventories, net | | | 1,168,215 | | | 1,293,701 | |
| Prepaid expenses and other current assets | | | 107,402 | | | 103,567 | |
| Prepaid income taxes | | | — | | | 16,387 | |
| Total current assets | | | 2,514,777 | | | 2,055,317 | |
| | | | | | | | |
| Property and equipment, net | | | 995,795 | | | 1,205,524 | |
| Operating lease assets | | | 1,504,614 | | | 1,537,565 | |
| Goodwill | | | 10,870 | | | 10,870 | |
| Other intangible assets, net | | | 2,465 | | | 3,391 | |
| Deferred compensation plan assets | | | 33,223 | | | 27,849 | |
| Other long-term assets | | | 28,225 | | | 23,356 | |
| Total assets | | $ | 5,089,969 | | $ | 4,863,872 | |
| | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 477,052 | | $ | 414,009 | |
| Accrued liabilities | | | 296,334 | | | 246,088 | |
| Deferred revenue | | | 274,383 | | | 237,535 | |
| Current operating lease liabilities | | | 253,415 | | | 239,629 | |
| Accrued income taxes | | | 42,529 | | | — | |
| Total current liabilities | | | 1,343,713 | | | 1,137,261 | |
| | | | | | | | |
| Non-current operating lease liabilities | | | 1,643,386 | | | 1,698,718 | |
| Deferred income taxes | | | 65,359 | | | 89,367 | |
| Other long-term liabilities | | | 37,962 | | | 36,432 | |
| Total liabilities | | | 3,090,420 | | | 2,961,778 | |
| | | | | | | | |
| Commitments and contingencies | | | | | | | |
| | | | | | | | |
| Total stockholders’ equity | | | 1,999,549 | | | 1,902,094 | |
| Total liabilities and stockholders’ equity | | $ | 5,089,969 | | $ | 4,863,872 | |
Exhibit 4
Ulta Beauty, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | 52 Weeks Ended | ||||
| | | January 30, | | February 1, | ||
| | | 2021 | | 2020 | ||
| | | (Unaudited) | | | | |
| Operating activities | | | | | | |
| Net income | | $ | 175,835 | | $ | 705,945 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
| Depreciation and amortization | | | 297,772 | | | 295,599 |
| Non-cash lease expense | | | 268,071 | | | 278,820 |
| Long-lived asset impairment charge | | | 72,533 | | | — |
| Deferred income taxes | | | (24,008) | | | 5,503 |
| Stock-based compensation expense | | | 27,583 | | | 25,045 |
| Loss on disposal of property and equipment | | | 6,827 | | | 5,850 |
| Change in operating assets and liabilities: | | | | | | |
| Receivables | | | (53,772) | | | (20,637) |
| Merchandise inventories | | | 125,486 | | | (79,372) |
| Prepaid expenses and other current assets | | | (4,363) | | | 9,289 |
| Income taxes | | | 58,916 | | | 610 |
| Accounts payable | | | 62,324 | | | 9,993 |
| Accrued liabilities | | | 58,599 | | | 28,183 |
| Deferred revenue | | | 36,848 | | | 38,481 |
| Operating lease liabilities | | | (297,513) | | | (256,910) |
| Other assets and liabilities | | | (783) | | | 54,894 |
| Net cash provided by operating activities | | | 810,355 | | | 1,101,293 |
| | | | | | | |
| Investing activities | | | | | | |
| Short-term investments, net | | | 110,000 | | | (110,000) |
| Capital expenditures | | | (151,866) | | | (298,534) |
| Acquisitions, net of cash acquired | | | (1,220) | | | — |
| Purchases of equity investments | | | (5,665) | | | (62,946) |
| Net cash used in investing activities | | | (48,751) | | | (471,480) |
| | | | | | | |
| Financing activities | | | | | | |
| Proceeds from long-term debt | | | 800,000 | | | — |
| Payments on long-term debt | | | (800,000) | | | — |
| Repurchase of common shares | | | (114,895) | | | (680,979) |
| Stock options exercised | | | 12,229 | | | 43,780 |
| Purchase of treasury shares | | | (3,353) | | | (9,540) |
| Debt issuance costs | | | (1,915) | | | — |
| Net cash used in financing activities | | | (107,934) | | | (646,739) |
| | | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | | | 56 | | | — |
| Net increase (decrease) in cash and cash equivalents | | | 653,726 | | | (16,926) |
| Cash and cash equivalents at beginning of year | | | 392,325 | | | 409,251 |
| Cash and cash equivalents at end of year | | $ | 1,046,051 | | $ | 392,325 |
Exhibit 5
Ulta Beauty, Inc.
2020 Store Update
| | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| | Total stores open | | Number of stores | | Number of stores | | Total stores | |
| | | at beginning of the | | opened during the | | closed during the | | open at |
| Fiscal 2020 | | quarter | quarter | quarter | end of the quarter | |||
| 1^st^ Quarter | | 1,254 | | 11 | | 1 | | 1,264 |
| 2^nd^ Quarter | | 1,264 | | 0 | | 0 | | 1,264 |
| 3^rd^ Quarter | | 1,264 | | 17 | | 19 | | 1,262 |
| 4^th^ Quarter | | 1,262 | | 2 | | 0 | | 1,264 |
| | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| | | | | Gross square feet for | | | | |
| | Total gross square | | stores opened or | | Gross square feet for | | Total gross square | |
| | | feet at beginning of | | expanded during the | | stores closed | | feet at end of the |
| Fiscal 2020 | | the quarter | quarter | during the quarter | quarter | |||
| 1^st^ Quarter | | 13,193,076 | | 111,894 | | 10,363 | | 13,294,607 |
| 2^nd^ Quarter | | 13,294,607 | | 0 | | 0 | | 13,294,607 |
| 3^rd^ Quarter | | 13,294,607 | | 173,077 | | 204,069 | | 13,263,615 |
| 4^th^ Quarter | | 13,263,615 | | 28,223 | | 0 | | 13,291,838 |
Exhibit 6
Ulta Beauty, Inc.
Sales by Category
The following tables set forth the approximate percentage of net sales by primary category:
| | | | | |
|---|---|---|---|---|
| | | 13 weeks ended | ||
| | **** | January 30, | **** | February 1, |
| | | 2021 | | 2020 |
| Cosmetics | | 41% | | 48% |
| Skincare, bath, and fragrance | | 32% | | 25% |
| Haircare products and styling tools | | 20% | | 18% |
| Services | | 2% | | 4% |
| Other (nail products, accessories, and other) | | 5% | | 5% |
| | | 100% | | 100% |
| | | | | |
|---|---|---|---|---|
| | | 52 weeks ended | ||
| | **** | January 30, | **** | February 1, |
| | | 2021 | | 2020 |
| Cosmetics | | 44% | | 50% |
| Skincare, bath, and fragrance | | 28% | | 22% |
| Haircare products and styling tools | | 20% | | 19% |
| Services | | 3% | | 5% |
| Other (nail products, accessories, and other) | | 5% | | 4% |
| | | 100% | | 100% |
Exhibit 7
Ulta Beauty, Inc.
Reconciliation of GAAP basis to Adjusted operating income, Adjusted net income and Adjusted diluted earnings per share
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | 13 weeks ended | | 52 weeks ended | ||||||||
| | | January 30, | | February 1, | January 30, | | February 1, | |||||
| | | 2021 | | 2020 | | 2021 | | 2020 | ||||
| Operating income | | $ | 224,272 | | $ | 287,756 | | $ | 236,820 | | $ | 901,094 |
| Add: Store asset impairment | | | 1,520 | | | — | | | 41,948 | | | — |
| Add: Store closures | | | 5,599 | | | — | | | 27,501 | | | — |
| Add: Store closures - inventory write-off | | | — | | | — | | | 1,400 | | | — |
| Add: Suspension of Canadian expansion | | | 13,235 | | | — | | | 29,121 | | | — |
| Add: Severance costs | | | 10,044 | | | — | | | 15,752 | | | — |
| Adjusted operating income | | $ | 254,670 | | $ | 287,756 | | $ | 352,542 | | $ | 901,094 |
| | | | | | | | | | | | | |
| Net income | | $ | 171,494 | | $ | 222,719 | | $ | 175,835 | | $ | 705,945 |
| Add: Store asset impairment | | | 1,520 | | | — | | | 41,948 | | | — |
| Less: Income tax benefit of store asset impairment^1^ | | | (371) | | | — | | | (9,286) | | | — |
| Add: Store closures | | | 5,599 | | | — | | | 27,501 | | | — |
| Less: Income tax benefit of store closures^1^ | | | (1,366) | | | — | | | (5,970) | | | — |
| Add: Store closures - inventory write-off | | | — | | | — | | | 1,400 | | | — |
| Less: Income tax benefit of store closures - inventory write-off^1^ | | | — | | | — | | | (288) | | | — |
| Add: Suspension of Canadian expansion | | | 13,235 | | | — | | | 29,121 | | | — |
| Less: Income tax benefit of suspension of Canadian expansion^1^ | | | (3,229) | | | — | | | (7,216) | | | — |
| Add: Severance costs | | | 10,044 | | | — | | | 15,752 | | | — |
| Less: Income tax benefit of severance costs^1^ | | | (2,451) | | | — | | | (3,884) | | | — |
| Less: Stock compensation and other tax credits | | | (1,116) | | | (3,226) | | | (926) | | | (17,692) |
| Adjusted net income | | $ | 193,359 | | $ | 219,493 | | $ | 263,987 | | $ | 688,253 |
| | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 3.03 | | $ | 3.89 | | $ | 3.11 | | $ | 12.15 |
| Add: Store asset impairment | | | 0.03 | | | — | | | 0.74 | | | — |
| Less: Income tax benefit of store asset impairment^1^ | | | (0.01) | | | — | | | (0.17) | | | — |
| Add: Store closures | | | 0.10 | | | — | | | 0.49 | | | — |
| Less: Income tax benefit of store closures^1^ | | | (0.03) | | | — | | | (0.11) | | | — |
| Add: Store closures - inventory write-off | | | — | | | — | | | 0.02 | | | — |
| Less: Income tax benefit of store closures - inventory write-off^1^ | | | — | | | — | | | — | | | — |
| Add: Suspension of Canadian expansion | | | 0.23 | | | — | | | 0.51 | | | — |
| Less: Income tax benefit of suspension of Canadian expansion^1^ | | | (0.05) | | | — | | | (0.12) | | | — |
| Add: Severance costs | | | 0.18 | | | — | | | 0.28 | | | — |
| Less: Income tax benefit of severance costs^1^ | | | (0.05) | | | — | | | (0.07) | | | — |
| Less: Stock compensation and other tax credits | | | (0.02) | | | (0.06) | | | (0.02) | | | (0.30) |
| Adjusted diluted earnings per share: | | $ | 3.41 | | $ | 3.83 | | $ | 4.66 | | $ | 11.85 |
^1^The income tax benefit for non-GAAP adjustments was calculated using the Company's blended tax rate before discrete items.