Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended August 3, 2024

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____________ to _____________

Commission File Number: 001-33764

ULTA BEAUTY, INC.

(Exact name of Registrant as specified in its charter)

incorporation or organization)

Identification No.)

Delaware

(State or other jurisdiction of
incorporation or organization)

38-4022268

(I.R.S. Employer
Identification No.)

1000 Remington Blvd., Suite 120

Bolingbrook, Illinois

(Address of principal executive offices)

60440

(Zip code)

Registrant’s telephone number, including area code: (630) 410-4800

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as of August 26, 2024 was 47,114,727 shares.

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ULTA BEAUTY, INC.

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Part I - Financial Information

Item 1. Financial Statements
Consolidated Balance Sheets		3
Consolidated Statements of Income		4
Consolidated Statements of Cash Flows		5
Consolidated Statements of Stockholders’ Equity		6
Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3. Quantitative and Qualitative Disclosures about Market Risk		24

Item 4. Controls and Procedures		24

Part II - Other Information		25

Item 1. Legal Proceedings		25

Item 1A. Risk Factors		25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		25

Item 3. Defaults Upon Senior Securities		25

Item 4. Mine Safety Disclosures		25

Item 5. Other Information		26

Item 6. Exhibits		26

SIGNATURES		27

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Part I - Financial Information

Item 1.Financial Statements

Ulta Beauty, Inc.

Consolidated Balance Sheets


	August 3,		February 3,		July 29,
(In thousands, except per share data)	2024		2024		2023
Assets		(Unaudited)				(Unaudited)
Current assets:
Cash and cash equivalents	$	413,962	$	766,594	$	388,627
Receivables, net		200,863		207,939		174,444
Merchandise inventories, net		1,998,286		1,742,136		1,815,539
Prepaid expenses and other current assets		132,023		115,598		110,524
Prepaid income taxes		53,607		4,251		30,114
Total current assets		2,798,741		2,836,518		2,519,248

Property and equipment, net		1,225,850		1,182,335		1,073,144
Operating lease assets		1,599,735		1,574,530		1,549,146
Goodwill		10,870		10,870		10,870
Other intangible assets, net		357		510		718
Deferred compensation plan assets		46,280		43,516		40,087
Other long-term assets		55,575		58,732		55,547
Total assets	$	5,737,408	$	5,707,011	$	5,248,760

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	566,904	$	544,001	$	521,315
Accrued liabilities		348,042		382,468		328,247
Deferred revenue		394,987		436,591		354,253
Current operating lease liabilities		281,301		283,821		287,359
Accrued income taxes		—		11,310		—
Total current liabilities		1,591,234		1,658,191		1,491,174

Non-current operating lease liabilities		1,647,698		1,627,271		1,593,040
Deferred income taxes		88,461		85,921		56,012
Other long-term liabilities		61,855		56,300		56,657
Total liabilities		3,389,248		3,427,683		3,196,883

Commitments and contingencies (Note 6)

Stockholders' equity:
Common stock, $0.01 par value, 400,000 shares authorized; 48,143, 49,123, and 50,139 shares issued; 47,300, 48,324, and 49,341 shares outstanding; at August 3, 2024 (unaudited), February 3, 2024, and July 29, 2023 (unaudited), respectively		481		491		501
Treasury stock-common, at cost		(106,491)		(83,032)		(82,229)
Additional paid-in capital		1,099,197		1,075,104		1,049,679
Retained earnings		1,354,973		1,286,765		1,083,926
Total stockholders’ equity		2,348,160		2,279,328		2,051,877
Total liabilities and stockholders’ equity	$	5,737,408	$	5,707,011	$	5,248,760

See accompanying notes to consolidated financial statements.

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Ulta Beauty, Inc.

Consolidated Statements of Income

(Unaudited)


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands, except per share data)	2024		2023		2024		2023
Net sales	$	2,552,087	$	2,529,809	$	5,277,935	$	5,164,072
Cost of sales		1,573,910		1,536,197		3,229,978		3,115,603
Gross profit		978,177		993,612		2,047,957		2,048,469

Selling, general and administrative expenses		644,821		600,692		1,310,734		1,212,821
Pre-opening expenses		4,155		1,278		7,074		1,936
Operating income		329,201		391,642		730,149		833,712
Interest income, net		(4,526)		(4,449)		(11,426)		(11,797)
Income before income taxes		333,727		396,091		741,575		845,509
Income tax expense		81,171		95,989		175,906		198,356
Net income	$	252,556	$	300,102	$	565,669	$	647,153

Net income per common share:
Basic	$	5.32	$	6.05	$	11.83	$	12.97
Diluted	$	5.30	$	6.02	$	11.78	$	12.90

Weighted average common shares outstanding:
Basic		47,505		49,617		47,815		49,885
Diluted		47,667		49,849		48,022		50,157

See accompanying notes to consolidated financial statements.

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Ulta Beauty, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Operating activities
Net income	$	565,669	$	647,153
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		130,053		119,862
Non-cash lease expense		163,481		152,867
Deferred income taxes		2,540		666
Stock-based compensation expense		19,272		21,539
Loss on disposal of property and equipment		5,204		3,878
Change in operating assets and liabilities:
Receivables		7,076		24,978
Merchandise inventories		(256,150)		(212,088)
Prepaid expenses and other current assets		(16,425)		19,722
Income taxes		(60,666)		8,194
Accounts payable		29,715		(38,752)
Accrued liabilities		(33,634)		(102,763)
Deferred revenue		(41,604)		(40,424)
Operating lease liabilities		(170,779)		(163,527)
Other assets and liabilities		15,127		(12,497)
Net cash provided by operating activities		358,879		428,808

Investing activities
Capital expenditures		(186,301)		(204,748)
Other investments		(5,091)		(1,687)
Net cash used in investing activities		(191,392)		(206,435)

Financing activities
Repurchase of common shares		(501,768)		(559,011)
Stock options exercised		9,196		9,147
Purchase of treasury shares		(23,459)		(21,759)
Debt issuance costs		(4,088)		—
Net cash used in financing activities		(520,119)		(571,623)

Net decrease in cash and cash equivalents		(352,632)		(349,250)
Cash and cash equivalents at beginning of period		766,594		737,877
Cash and cash equivalents at end of period	$	413,962	$	388,627

Supplemental information
Income taxes paid, net of refunds	$	233,249	$	189,166
Non-cash capital expenditures		54,075		51,860

See accompanying notes to consolidated financial statements.

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Ulta Beauty, Inc.

Consolidated Statements of Stockholders’ Equity

(Unaudited)


				Treasury -
	Common Stock			Common Stock			Additional				Total
	Issued			Treasury			Paid-In		Retained		Stockholders'
(In thousands)	Shares	Amount		Shares	Amount		Capital		Earnings		Equity
Balance – February 3, 2024	49,123	$	491	(799)	$	(83,032)	$	1,075,104	$	1,286,765	$	2,279,328
Net income	—		—	—		—		—		313,113		313,113
Stock-based compensation	—		—	—		—		10,082		—		10,082
Stock options exercised and other awards	153		2	—		—		8,911		—		8,913
Purchase of treasury shares	—		—	(44)		(23,283)		—		—		(23,283)
Repurchase of common shares, including excise tax	(588)		(6)	—		—		(2,275)		(285,129)		(287,410)
Balance – May 4, 2024	48,688	$	487	(843)	$	(106,315)	$	1,091,822	$	1,314,749	$	2,300,743
Net income	—		—	—		—		—		252,556		252,556
Stock-based compensation	—		—	—		—		9,190		—		9,190
Stock options exercised and other awards	5		—	—		—		283		—		283
Purchase of treasury shares	—		—	—		(176)		—		—		(176)
Repurchase of common shares, including excise tax	(550)		(6)	—		—		(2,098)		(212,332)		(214,436)
Balance – August 3, 2024	48,143	$	481	(843)	$	(106,491)	$	1,099,197	$	1,354,973	$	2,348,160

See accompanying notes to consolidated financial statements.

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Ulta Beauty, Inc.

Consolidated Statements of Stockholders’ Equity

(Unaudited)


				Treasury -
	Common Stock			Common Stock			Additional				Total
	Issued			Treasury			Paid-In		Retained		Stockholders'
(In thousands)	Shares	Amount		Shares	Amount		Capital		Earnings		Equity
Balance – January 28, 2023	51,120	$	511	(756)	$	(60,470)	$	1,023,997	$	995,773	$	1,959,811
Net income	—		—	—		—		—		347,051		347,051
Stock-based compensation	—		—	—		—		9,721		—		9,721
Stock options exercised and other awards	150		1	—		—		8,926		—		8,927
Purchase of treasury shares	—		—	(41)		(21,659)		—		—		(21,659)
Repurchase of common shares, including excise tax	(541)		(5)	—		—		(2,266)		(283,512)		(285,783)
Balance – April 29, 2023	50,729	$	507	(797)	$	(82,129)	$	1,040,378	$	1,059,312	$	2,018,068
Net income	—		—	—		—		—		300,102		300,102
Stock-based compensation	—		—	—		—		11,818		—		11,818
Stock options exercised and other awards	4		—	—		—		220		—		220
Purchase of treasury shares	—		—	(1)		(100)		—		—		(100)
Repurchase of common shares, including excise tax	(594)		(6)	—		—		(2,737)		(275,488)		(278,231)
Balance – July 29, 2023	50,139	$	501	(798)	$	(82,229)	$	1,049,679	$	1,083,926	$	2,051,877

See accompanying notes to consolidated financial statements.

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Ulta Beauty, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share and store count data) (Unaudited)

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. Nearly every store features a full-service salon. 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 August 3, 2024, the Company operated 1,411 stores across 50 states, as shown in the table below.


	Number of		Number of
Location	stores	Location	stores
Alabama	27	Montana	6
Alaska	3	Nebraska	5
Arizona	37	Nevada	16
Arkansas	11	New Hampshire	8
California	173	New Jersey	46
Colorado	27	New Mexico	7
Connecticut	19	New York	56
Delaware	4	North Carolina	46
Florida	100	North Dakota	4
Georgia	44	Ohio	47
Hawaii	4	Oklahoma	22
Idaho	10	Oregon	19
Illinois	55	Pennsylvania	45
Indiana	26	Rhode Island	5
Iowa	11	South Carolina	26
Kansas	14	South Dakota	3
Kentucky	16	Tennessee	32
Louisiana	18	Texas	133
Maine	3	Utah	15
Maryland	29	Vermont	1
Massachusetts	27	Virginia	35
Michigan	49	Washington	37
Minnesota	20	West Virginia	7
Mississippi	12	Wisconsin	21
Missouri	26	Wyoming	4
		Total	1,411

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.

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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 August 3, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending February 1, 2025, or for any other future interim period or for any future year.

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 February 3, 2024. All amounts are stated in thousands, with the exception of per share amounts and number of stores.

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 February 3, 2024. 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 2024 and 2023 ended on August 3, 2024 and July 29, 2023, 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 will be reflected in the consolidated financial statements in future periods.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Recent accounting pronouncements not yet adopted

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. The guidance updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 on related disclosures.

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024 and should be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on related disclosures.

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Securities and Exchange Commission (SEC) Climate-Related Disclosures

In March 2024, the SEC adopted rules intended to enhance and standardize climate-related disclosures in registration statements and annual reports. The new rules will require disclosure of material climate-related risks, including disclosure of Board of Directors' oversight and risk management activities, the material impacts of these risks to us and the quantification of material impacts to us as a result of severe weather events and other natural conditions. The rules also require disclosure of material greenhouse gas emissions and any material climate-related targets and goals. The new rules will be effective for annual reporting periods beginning in fiscal year 2025, except for the greenhouse gas emissions disclosures which will be effective for annual reporting periods beginning in fiscal year 2026, however the new rules have been stayed by the federal courts and, as a result, the SEC has indefinitely delayed their effectiveness. The Company is currently evaluating the impact of these new rules.

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 Corporation, 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
	August 3,	July 29,	August 3,	July 29,
(Percentage of net sales)	2024	2023	2024	2023
Cosmetics	39%	40%	40%	42%
Skincare	24%	23%	24%	22%
Haircare	20%	22%	19%	21%
Fragrance	11%	9%	11%	9%
Services	4%	4%	4%	4%
Other	2%	2%	2%	2%
	100%	100%	100%	100%

Certain sales departments were reclassified between categories in the prior year to conform to current year presentation, including moving the bath category from Fragrance to Skincare.

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 Ulta Beauty Rewards loyalty points and unredeemed Ulta Beauty gift cards. In addition, breakage on gift cards is recognized proportionately as redemption occurs.

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The following table provides a summary of the changes included in deferred revenue during the 13 and 26 weeks ended August 3, 2024 and July 29, 2023:


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands)	2024		2023		2024		2023
Beginning balance	$	391,446	$	350,123	$	428,788	$	388,583
Additions to contract liabilities (1)		120,189		114,374		253,584		237,770
Deductions to contract liabilities (2)		(123,818)		(118,430)		(294,555)		(280,286)
Ending balance	$	387,817	$	346,067	$	387,817	$	346,067

(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 $7,170 and $8,186 at August 3, 2024 and July 29, 2023, respectively.

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 August 3, 2024, February 3, 2024, and July 29, 2023. No additional goodwill was recognized during the 13 and 26 weeks ended August 3, 2024. 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.

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 2036. 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				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands)	2024		2023		2024		2023
Operating lease cost	$	88,080	$	83,121	$	176,235	$	168,249

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Other information

The following table presents supplemental disclosures of cash flow information related to operating leases:


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Cash paid for operating lease liabilities (1)	$	203,766	$	196,638
Operating lease assets obtained in exchange for operating lease liabilities (non-cash)		188,686		140,750

(1)	Excludes $19,882 and $17,450 related to cash received for tenant incentives for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

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 Company’s consolidated financial position, results of operations or cash flows.

7.Debt

On March 13, 2024, the Company entered into Amendment No. 3 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 13, 2029, provides maximum revolving loans equal to the lesser of $800,000 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 $200,000, 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 0.5% 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 Company’s borrowing availability, and the unused line fee is 0.25% to 0.375% per annum.

As of August 3, 2024, February 3, 2024, and July 29, 2023, there were no borrowings outstanding under the credit facility.

As of August 3, 2024, the Company was in compliance with all terms and covenants of the Loan Agreement.

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.

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●

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 August 3, 2024, February 3, 2024, and July 29, 2023, there were liabilities related to the non-qualified deferred compensation plan included in other long-term liabilities on the consolidated balance sheets of $48,720, $42,653, and $42,529, 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.

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:



	26 Weeks Ended
	August 3,	July 29,
	2024	2023
Volatility rate	33.0%	45.0%
Average risk-free interest rate	4.4%	3.8%
Average expected life (in years)	3.5	3.4
Dividend yield	—	—

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 56 and 42 stock options during the 26 weeks ended August 3, 2024 and July 29, 2023, respectively. Stock-based compensation expense for stock options was $1,506 and $1,749 for the 13 weeks ended August 3, 2024 and July 29, 2023, respectively. Stock-based compensation expense for stock options was $3,185 and $3,219 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively. The weighted-average grant date fair value of these stock options was $157.66 and $199.15 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively. At August 3, 2024, there was approximately $15,252 of unrecognized stock-based compensation expense related to unvested stock options.

There were 51 and 45 restricted stock units issued during the 26 weeks ended August 3, 2024 and July 29, 2023, respectively. Stock-based compensation expense for restricted stock units was $4,997 and $4,934 for the 13 weeks ended August 3, 2024 and July 29, 2023, respectively. Stock-based compensation expense for restricted stock units was $9,385 and $9,293 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively. At August 3, 2024, there was approximately $39,738 of unrecognized stock-based compensation expense related to restricted stock units.

There were 71 and 33 performance-based restricted stock units issued during the 26 weeks ended August 3, 2024 and July 29, 2023, respectively. Stock-based compensation expense for performance-based restricted stock units was $2,687 and $5,135 for the 13 weeks ended August 3, 2024 and July 29, 2023, respectively. Stock-based compensation expense for performance-based restricted stock units was $6,702 and $9,027 for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively. At August 3, 2024, there was approximately $25,089 of unrecognized stock-based compensation expense related to performance-based restricted stock units.

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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 $81,171 for the 13 weeks ended August 3, 2024 represents an effective tax rate of 24.3%, compared to $95,989 of tax expense representing an effective tax rate of 24.2% for the 13 weeks ended July 29, 2023.

Income tax expense of $175,906 for the 26 weeks ended August 3, 2024 represents an effective tax rate of 23.7%, compared to $198,356 of tax expense representing an effective tax rate of 23.5% for the 26 weeks ended July 29, 2023.

On August 16, 2022, the Inflation Reduction Act of 2022 was enacted into law, which, among other things, introduced a 15% corporate alternative minimum tax on book income of certain large corporations and created a 1% excise tax on net share repurchases. The corporate alternative minimum tax is effective beginning in fiscal 2024 and did not have a material impact on the consolidated financial statements for the 13 and 26 weeks ended August 3, 2024. The excise tax applies to share repurchases made after December 31, 2022.

11.Net income per common share

The following is a 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
	August 3,		July 29,		August 3,		July 29,
(In thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income	$	252,556	$	300,102	$	565,669	$	647,153

Denominator:
Weighted-average common shares – Basic		47,505		49,617		47,815		49,885
Dilutive effect of stock options and non-vested stock		162		232		207		272
Weighted-average common shares – Diluted		47,667		49,849		48,022		50,157

Net income per common share:
Basic	$	5.32	$	6.05	$	11.83	$	12.97
Diluted	$	5.30	$	6.02	$	11.78	$	12.90

The denominator for diluted net income per common share for the 13 weeks ended August 3, 2024 and July 29, 2023 excludes 184 and 127 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 August 3, 2024 and July 29, 2023 excludes 195 and 133 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.

12.Share repurchase program

In March 2022, the Board of Directors authorized a share repurchase program (the 2022 Share Repurchase Program) pursuant to which the Company could repurchase up to $2,000,000 of the Company’s common stock. The 2022 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the earlier share repurchase program. The 2022 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.

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In March 2024, the Board of Directors authorized a new share repurchase program (the 2024 Share Repurchase Program) pursuant to which the Company may repurchase up to $2,000,000 of the Company’s common stock. The 2024 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the 2022 Share Repurchase Program. The 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:


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Shares repurchased		1,138		1,135
Total cost of shares repurchased, including excise tax	$	501,846	$	564,014

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this quarterly report. This discussion 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 our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements 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 Form 10-Q are based upon our historical performance and on current plans, estimates, and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates, targets, strategies, or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation:

●

macroeconomic conditions, including inflation, elevated interest rates and recessionary concerns, as well as continuing labor cost pressures, and transportation and shipping cost pressures, have had, and may continue to have, a negative impact on our business, financial condition, profitability, and cash flows (including future uncertain impacts);

●

changes in the overall level of consumer spending and volatility in the economy, including as a result of macroeconomic conditions and geopolitical events;

●

our ability to sustain our growth plans and successfully implement our long-range strategic and financial plan;

●

the ability to execute our operational excellence priorities, including continuous improvement, Project SOAR (the replacement of our enterprise resource planning platform), and supply chain optimization;

●

our ability to gauge beauty trends and react to changing consumer preferences in a timely manner;

●

the possibility that we may be unable to compete effectively in our highly competitive markets;

●

the possibility of significant interruptions in the operations of our distribution centers, fast fulfillment centers, and market fulfillment centers;

●

the possibility that cybersecurity or information security breaches and other disruptions could compromise our information or result in the unauthorized disclosure of confidential information;

●

the possibility of material disruptions to our information systems, including our Ulta.com website and mobile applications;

●

the failure to maintain satisfactory compliance with applicable privacy and data protection laws and regulations;

●

changes in the good relationships we have with our brand partners, our ability to continue to obtain sufficient merchandise from our brand partners, and/or our ability to continue to offer permanent or temporary exclusive products of our brand partners;

●

our ability to effectively manage our inventory and protect against inventory shrink;

●

changes in the wholesale cost of our products and/or interruptions at our brand partners’ or third-party vendors’ operations;

●

epidemics, pandemics or natural disasters, which could negatively impact sales;

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●

the possibility that new store openings and existing locations may be impacted by developer or co-tenant issues;

●

our ability to attract and retain key executive personnel;

●

the impact of climate change on our business operations and/or supply chain;

●

our ability to successfully execute our common stock repurchase program or implement future common stock repurchase programs;

●

a decline in operating results which could lead to asset impairment and store closure charges; and

●

other risk factors detailed in our public filings with the Securities and Exchange Commission, including risk factors contained in Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended February 3, 2024, as such may be amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q (including this report).

Except to the extent required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

References in the following discussion to “we,” “us,” “our,” “Ulta Beauty,” the “Company,” and similar references mean Ulta Beauty, Inc. and its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

Overview

We were founded in 1990 as a beauty retailer at a time when prestige, mass, and salon products were sold through distinct channels – department stores for prestige products; drug stores and mass merchandisers for mass products; and salons and authorized retail outlets for professional hair care products. We developed a unique specialty retail concept that offers a broad range of brands and price points, select beauty services, and a convenient and welcoming shopping environment. We define our target consumer as a beauty enthusiast, a consumer who is passionate about the beauty category, uses beauty for self-expression, experimentation and self-investment, and has high expectations for the shopping experience. We believe our strategy provides us with the competitive advantages that have contributed to our financial performance.

Today, we are the largest specialty beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products, and salon services. Key aspects of our business include: a differentiated assortment of approximately 25,000 beauty products across a variety of categories and price points as well as a variety of beauty services, including salon services, in more than 1,400 stores predominantly located in convenient, high-traffic locations; engaging digital experiences delivered through our website, Ulta.com, and our mobile applications; our best-in-class loyalty program that enables members to earn points for every dollar spent on products and beauty services and provides us with deep, proprietary customer insights; and our ability to cultivate human connection with warm and welcoming guest experiences across all of our channels.

The continued growth of our business and any future increases in net sales, net income, and cash flows is dependent on our ability to execute our strategic priorities: 1) drive breakthrough and disruptive growth through an expanded definition of All Things Beauty; 2) evolve the omnichannel experience through connected physical and digital ecosystems, All In Your World; 3) expand and deepen our presence across the beauty journey, positioning Ulta Beauty at the Heart of the Beauty Community; 4) drive operational excellence and optimization; 5) protect and cultivate our world-class culture and talent; and 6) expand our environmental and social impact. We believe the attractive and growing U.S. beauty products and salon services industry, the expanding definition of beauty and the role that omnichannel capabilities play in consumers’ lives, coupled with Ulta Beauty’s competitive strengths, position us to capture additional market share in the industry.

Comparable sales is a key metric that is monitored closely within the retail industry. Our comparable sales have fluctuated in the past, and we expect them to continue to fluctuate in the future. A variety of factors affect our comparable sales, including general U.S. economic conditions, changes in merchandise strategy or mix, and timing and effectiveness of our marketing activities, among others.

Over the long term, our growth strategy is to increase total net sales through growing our comparable sales, expanding omnichannel capabilities, and opening new stores. Long-term operating profit is expected to increase as a result of our efforts to optimize our real estate portfolio, expand merchandise margin, and leverage our fixed store costs with

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comparable sales increases and operating efficiencies, partially offset by incremental investments in people, guest experiences, systems, and supply chain required to support a 1,500 to 1,700 store chain in the U.S. with successful e-commerce and competitive omnichannel capabilities.

Current Trends

Industry trends

Our research indicates that Ulta Beauty has captured meaningful market share across all categories over the last several years. The overall beauty market expanded in 2023 and into the first 26 weeks of fiscal 2024, supported by on-going consumer engagement with the beauty category. We remain confident that our differentiated and diverse business model, our commitment to strategic investments, and our highly engaged associates will continue to drive market share gains over the long term.

Impact of inflation and other macroeconomic trends

Persistent inflationary and macroeconomic pressures are impacting consumer spending habits broadly, which we believe may have contributed to lower sales trends through the first 26 weeks of fiscal 2024. The continuation of inflationary and macroeconomic pressures could lead to a recession and further impact our ability to grow sales and maintain historical profitability levels. In addition, inflation could cause the interest rates on any future debt to remain at an elevated level or increase.

Basis of presentation

The Company has one reportable segment, which includes retail stores, salon services, and e-commerce.

We recognize merchandise revenue at the point of sale in our retail stores. E-commerce sales are recognized upon shipment or guest pickup of the merchandise based on meeting the transfer of control criteria. Retail store and e-commerce sales are recorded net of estimated returns. Shipping and handling are treated as costs to fulfill the contract and not a separate performance obligation. Accordingly, we recognize revenue for our single performance obligation related to online sales at the time control of the merchandise passes to the customer, which is at the time of shipment or guest pickup. We provide refunds for merchandise returns within 60 days from the original purchase date. State sales taxes are presented on a net basis as we consider our self a pass-through conduit for collecting and remitting state sales tax. Salon service revenue is recognized at the time the service is provided to the guest. Gift card sales revenue is deferred until the guest redeems the gift card. Company coupons and other incentives are recorded as a reduction of net sales. Other revenue includes the private label and co-branded credit card programs, royalties derived from the partnership with Target Corporation, and deferred revenue related to the loyalty program and gift card breakage.

Comparable sales reflect sales for stores beginning on the first day of the 14^th month of operation. Therefore, a store is included in our comparable store base on the first day of the period after one year of operations plus the initial one-month grand opening period. Non-comparable store sales include sales from new stores that have not yet completed their 13^th month of operation and stores that were closed for part or all of the period in either year. Remodeled stores are included in comparable sales unless the store was closed for a portion of the current or prior period. Comparable sales include retail sales, salon services, and e-commerce. In fiscal years with 53 weeks, the 53^rd week of comparable sales is included in the calculation. In the year following a 53-week year, the prior year period is shifted by one week to compare similar calendar weeks. There may be variations in the way in which some of our competitors and other retailers calculate comparable or same store sales.

Measuring comparable sales allows us to evaluate the performance of our store base as well as several other aspects of our overall strategy. Several factors could positively or negatively impact our comparable sales results:

●

the general national, regional, and local economic conditions and corresponding impact on customer spending levels;

●

the introduction of new products or brands;

●

the location of new stores in existing store markets;

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●

competition;

●

our ability to respond on a timely basis to changes in consumer preferences;

●

the effectiveness of our various merchandising and marketing activities; and

●

the number of new stores opened and the impact on the average age of all of our comparable stores.

Cost of sales includes:

●

the cost of merchandise sold, offset by vendor income that is not a reimbursement of specific, incremental, and identifiable costs;

●

distribution costs including labor and related benefits, freight, rent, depreciation and amortization, real estate taxes, utilities, and insurance;

●

shipping and handling costs for e-commerce orders;

●

retail store occupancy costs including rent, depreciation and amortization, real estate taxes, utilities, repairs and maintenance, insurance, and licenses;

●

salon services payroll and benefits; and

●

shrink and inventory valuation reserves.

Our cost of sales may be negatively impacted as we open new stores. Changes in our merchandise or channel mix may also have an impact on cost of sales. This presentation of items included in cost of sales may not be comparable to the way in which our competitors or other retailers compute their cost of sales.

Selling, general and administrative expenses include:

●

payroll, bonus, and benefit costs for retail store and corporate employees;

●

advertising and marketing costs, offset by vendor income that is a reimbursement of specific, incremental, and identifiable costs;

●

occupancy costs related to our corporate office facilities;

●

stock-based compensation expense;

●

depreciation and amortization for all assets, except those related to our retail stores and distribution operations, which are included in cost of sales; and

●

legal, finance, information systems, and other corporate overhead costs.

This presentation of items in selling, general and administrative expenses may not be comparable to the way in which our competitors or other retailers compute their selling, general and administrative expenses.

Pre-opening expenses include non-capital expenditures during the period prior to store opening for new, remodeled, and relocated stores including rent during the construction period for new and relocated stores, store set-up labor, management and employee training, and grand opening advertising.

Interest income, net represents interest from cash equivalents, which include highly liquid investments such as money market funds and certificates of deposit with an original maturity of three months or less from the date of purchase. Interest expense includes interest costs and facility fees associated with our credit facility, which is structured as an asset-based lending instrument. Our credit facility interest is based on a variable interest rate structure which can result in increased cost in periods of rising or elevated interest rates.

Income tax expense reflects the federal statutory tax rate and the weighted average state statutory tax rate for the states in which we operate stores.

Results of operations

Our quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31. The Company’s second quarter in fiscal 2024 and 2023 ended on August 3, 2024 and July 29, 2023, respectively. Our quarterly results of operations have varied in the past and are likely to do so again in the future. As such, we believe that

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period-to-period comparisons of our results of operations should not be relied upon as an indication of our future performance.

The following tables present the components of our consolidated results of operations for the periods indicated:


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(Dollars in thousands)	2024		2023		2024		2023
Net sales	$	2,552,087	$	2,529,809	$	5,277,935	$	5,164,072
Cost of sales		1,573,910		1,536,197		3,229,978		3,115,603
Gross profit		978,177		993,612		2,047,957		2,048,469

Selling, general and administrative expenses		644,821		600,692		1,310,734		1,212,821
Pre-opening expenses		4,155		1,278		7,074		1,936
Operating income		329,201		391,642		730,149		833,712
Interest income, net		(4,526)		(4,449)		(11,426)		(11,797)
Income before income taxes		333,727		396,091		741,575		845,509
Income tax expense		81,171		95,989		175,906		198,356
Net income	$	252,556	$	300,102	$	565,669	$	647,153

Other operating data:
Number of stores end of period		1,411		1,362		1,411		1,362
Comparable sales		(1.2%)		8.0%		0.2%		8.7%


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(Percentage of net sales)	2024		2023		2024		2023
Net sales		100.0%		100.0%		100.0%		100.0%
Cost of sales		61.7%		60.7%		61.2%		60.3%
Gross profit		38.3%		39.3%		38.8%		39.7%

Selling, general and administrative expenses		25.3%		23.7%		24.8%		23.5%
Pre-opening expenses		0.2%		0.1%		0.1%		0.0%
Operating income		12.9%		15.5%		13.8%		16.1%
Interest income, net		(0.2%)		(0.2%)		(0.2%)		(0.2%)
Income before income taxes		13.1%		15.7%		14.1%		16.4%
Income tax expense		3.2%		3.8%		3.3%		3.8%
Net income		9.9%		11.9%		10.7%		12.5%

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Comparison of 13 weeks ended August 3, 2024 to 13 weeks ended July 29, 2023

Net sales

Net sales increased $22.3 million, or 0.9%, to $2.6 billion for the 13 weeks ended August 3, 2024 compared to $2.5 billion for the 13 weeks ended July 29, 2023. The net sales increase was primarily due to new store contribution and a $5.7 million increase in other revenue. The comparable sales decrease of 1.2% for the 13 weeks ended August 3, 2024 was driven by a 1.8% decrease in transactions and a 0.6% increase in average ticket.

Gross profit

Gross profit decreased $15.4 million, or 1.6%, to $978.2 million for the 13 weeks ended August 3, 2024, compared to $993.6 million for the 13 weeks ended July 29, 2023. Gross profit as a percentage of net sales decreased to 38.3% for the 13 weeks ended August 3, 2024, compared to 39.3% for the 13 weeks ended July 29, 2023. The decrease in gross profit margin was primarily due to lower merchandise margins and deleverage of store fixed costs, partially offset by growth in other revenue and lower inventory shrink.

Selling, general and administrative expenses

Selling, general and administrative (SG&A) expenses increased $44.1 million or 7.3%, to $644.8 million for the 13 weeks ended August 3, 2024, compared to $600.7 million for the 13 weeks ended July 29, 2023. SG&A expenses as a percentage of net sales increased to 25.3% for the 13 weeks ended August 3, 2024, compared to 23.7% for the 13 weeks ended July 29, 2023, primarily due to deleverage of store payroll and benefits, corporate overhead primarily due to strategic investments, store expenses, and marketing expenses, partially offset by lower incentive compensation.

Pre-opening expenses

Pre-opening expenses were $4.2 million for the 13 weeks ended August 3, 2024 compared to $1.3 million for the 13 weeks ended July 29, 2023.

Interest income, net

Interest income, net was $4.5 million for the 13 weeks ended August 3, 2024 compared to $4.4 million for the 13 weeks ended July 29, 2023. We did not have any outstanding borrowings on the credit facility as of August 3, 2024, February 3, 2024, and July 29, 2023.

Income tax expense

Income tax expense of $81.2 million for the 13 weeks ended August 3, 2024 represents an effective tax rate of 24.3%, compared to $96.0 million of income tax expense representing an effective tax rate of 24.2% for the 13 weeks ended July 29, 2023.

Net income

Net income was $252.6 million for the 13 weeks ended August 3, 2024, compared to $300.1 million for the 13 weeks ended July 29, 2023. The decrease in net income is primarily due to the $44.1 million increase in SG&A expenses, the $15.4 million decrease in gross profit, and the $2.9 million increase in pre-opening expenses, partially offset by the $14.8 million decrease in income taxes.

Comparison of 26 weeks ended August 3, 2024 to 26 weeks ended July 29, 2023

Net sales

Net sales increased $113.9 million, or 2.2%, to $5.3 billion for the 26 weeks ended August 3, 2024, compared to $5.2 billion for the 26 weeks ended July 29, 2023. The net sales increase was primarily due to new store contribution and a $14.8 million increase in other revenue. The comparable sales increase of 0.2% for the 26 weeks ended August 3, 2024 was driven by a 0.4% increase in average ticket and a 0.2% decrease in transactions.

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Gross profit

Gross profit was $2.0 billion for the 26 weeks ended August 3, 2024 compared to $2.0 billion for the 26 weeks ended July 29, 2023. Gross profit as a percentage of net sales decreased to 38.8% for the 26 weeks ended August 3, 2024, compared to 39.7% for the 26 weeks ended July 29, 2023. The decrease in gross profit margin was primarily due to lower merchandise margin and deleverage of store fixed costs, partially offset by growth in other revenue.

Selling, general and administrative expenses

SG&A expenses increased $97.9 million, or 8.1%, to $1.3 billion for the 26 weeks ended August 3, 2024, compared to $1.2 billion for the 26 weeks ended July 29, 2023. SG&A expenses as a percentage of net sales increased to 24.8% for the 26 weeks ended August 3, 2024 compared to 23.5% for the 26 weeks ended July 29, 2023, primarily due to deleverage of corporate overhead primarily due to strategic investments, store payroll and benefits, store expenses, and marketing expenses, partially offset by lower incentive compensation.

Pre-opening expenses

Pre-opening expenses were $7.1 million for the 26 weeks ended August 3, 2024 compared to $1.9 million for the 26 weeks ended July 29, 2023.

Interest income, net

Interest income, net was $11.4 million for the 26 weeks ended August 3, 2024 compared to $11.8 million for the 26 weeks ended July 29, 2023. We did not have any outstanding borrowings on the credit facility as of August 3, 2024, February 3, 2024, and July 29, 2023.

Income tax expense

Income tax expense of $175.9 million for the 26 weeks ended August 3, 2024 represents an effective tax rate of 23.7%, compared to $198.4 million of income tax expense representing an effective tax rate of 23.5% for the 26 weeks ended July 29, 2023.

Net income

Net income was $565.7 million for the 26 weeks ended August 3, 2024 compared to $647.2 million for the 26 weeks ended July 29, 2023. The decrease in net income is primarily due to the $97.9 million increase in SG&A expenses and the $5.1 million increase in pre-opening expenses, partially offset by the $22.5 million decrease in income taxes.

Liquidity and capital resources

Our primary sources of liquidity are cash and cash equivalents, cash flows from operations, and borrowings under our credit facility. The most significant components of our working capital are merchandise inventories, cash and cash equivalents, and receivables, reduced by accounts payable, deferred revenue, and accrued liabilities. As of August 3, 2024, February 3, 2024, and July 29, 2023, we had cash and cash equivalents of $414.0 million, $766.6 million, and $388.6 million, respectively.

Our primary cash needs are for rent, capital expenditures for new, remodeled, and relocated stores, increased merchandise inventories related to store expansion and new brand additions, supply chain improvements, share repurchases, and continued investment in our information technology systems.

Our most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for lease expenses, inventory, labor, distribution, advertising and marketing, and tax liabilities) as well as periodic spend for capital expenditures, investments, and share repurchases. Our working capital needs are greatest from August through November each year as a result of our inventory build-up during this period for the approaching holiday season.

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Long-term cash requirements primarily relate to funding lease expenses and other purchase commitments.

We generally fund short-term and long-term cash requirements with cash from operating activities. We believe our primary sources of liquidity will satisfy our cash requirements over both the short term (the next twelve months) and long term.

Cash flows

We believe our ability to generate substantial cash from operating activities and readily secure financing at competitive rates are key strengths that give us significant flexibility to meet our short and long-term financial commitments.

The following table presents a summary of our cash flows:


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Net cash provided by operating activities	$	358,879	$	428,808
Net cash used in investing activities		(191,392)		(206,435)
Net cash used in financing activities		(520,119)		(571,623)

Operating activities

Operating activities consist of net income adjusted for certain non-cash items, including depreciation and amortization, non-cash lease expense, deferred income taxes, stock-based compensation expense, realized gains or losses on disposal of property and equipment, and the effect of working capital changes.

The decrease in net cash provided by operating activities in the first 26 weeks of fiscal 2024 compared to the first 26 weeks of fiscal 2023 was mainly due to the timing of accounts payable, accrued liabilities, accrued income taxes, and prepaid expenses and other current assets, the decrease in net income, and a larger increase in merchandise inventories in the first 26 weeks of fiscal 2024, partially offset by a decrease in net other assets and liabilities.

Merchandise inventories, net were $2.0 billion at August 3, 2024 compared to $1.8 billion at July 29, 2023, representing an increase of $182.7 million or 10.1%. The increase in total inventory is primarily due to the following:

●

$72 million increase due to new brand launches;

●

$56 million increase primarily due to the opening of the new market fulfillment center in Greer, SC; and

●

$55 million increase due to the addition of 49 net new stores opened since July 29, 2023.

Investing activities

We have historically used cash primarily for new, remodeled, relocated, and refreshed stores, supply chain investments, short-term investments, and investments in information technology systems. Investing activities for capital expenditures were $186.3 million during the 26 weeks ended August 3, 2024, compared to $204.7 million during the 26 weeks ended July 29, 2023.

During the 26 weeks ended August 3, 2024, we opened 29 new stores, closed three stores, relocated two stores, and remodeled nine stores, compared to the 26 weeks ended July 29, 2023, when we opened eight new stores, closed one store, relocated three stores, and remodeled five stores.

The decrease in net cash used in investing activities in the first 26 weeks of fiscal 2024 compared to the first 26 weeks of fiscal 2023 was primarily due to lower capital expenditures for information technology systems and supply chain investments, partially offset by higher capital expenditures for new, remodeled, and relocated stores and merchandising fixtures, compared to the first 26 weeks of fiscal 2023.

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Our future investments will depend primarily on the number of new, remodeled, and relocated stores, information technology systems, and supply chain investments we undertake and the timing of these expenditures. Based on past performance and current expectations, we believe our sources of liquidity will be sufficient to fund future capital expenditures.

Financing activities

Financing activities include share repurchases, borrowing and repayment of our revolving credit facility, and capital stock transactions. Purchases of treasury shares represent the fair value of common shares repurchased from plan participants in connection with shares withheld to satisfy minimum statutory tax obligations upon the vesting of restricted stock.

The decrease in net cash used in financing activities in the first 26 weeks of fiscal 2024 compared to the first 26 weeks of fiscal 2023 was primarily due to a decrease in the dollar amount of share repurchases.

We had no borrowings outstanding under the credit facility as of August 3, 2024, February 3, 2024, and July 29, 2023. The zero outstanding borrowings position is due to a combination of factors including sales demand, overall performance of management initiatives including expense control, and inventory and other working capital reductions. We may require borrowings under the facility from time to time in future periods for unexpected business disruptions, to support our new store program, seasonal inventory needs, or share repurchases.

Share repurchase program

In March 2022, the Board of Directors authorized a share repurchase program (the 2022 Share Repurchase Program) pursuant to which the Company could repurchase up to $2.0 billion of the Company’s common stock. The 2022 Share Repurchase Program authorization revoked the previously authorized but unused amounts from the earlier share repurchase program. The 2022 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time.

In March 2024, the Board of Directors authorized a new share repurchase program (the 2024 Share Repurchase Program) pursuant to which the Company may repurchase up to $2.0 billion of the Company’s common stock. The 2024 Share Repurchase Program authorization revokes the previously authorized but unused amounts from the 2022 Share Repurchase Program. The 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:


	26 Weeks Ended
	August 3,		July 29,
(Dollars in millions)	2024		2023
Shares repurchased		1,137,856		1,134,737
Total cost of shares repurchased, including excise tax	$	501.8	$	564.0

Credit facility

On March 13, 2024, we entered into Amendment No. 3 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 13, 2029, provides maximum revolving loans equal to the lesser of $800.0 million 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 $50.0 million subfacility for letters of credit and allows the Company to increase the revolving facility by an additional $200.0 million, 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

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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 0.5% 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 Company’s borrowing availability, and the unused line fee is 0.25% to 0.375% per annum.

As of August 3, 2024, February 3, 2024, and July 29, 2023, we had no borrowings outstanding under the credit facility.

As of August 3, 2024, we were in compliance with all terms and covenants of the Loan Agreement.

Seasonality

Our business is subject to seasonal fluctuation. Significant portions of our net sales and profits are realized during the fourth quarter of the fiscal year due to the holiday selling season. To a lesser extent, our business is also affected by Mother’s Day and Valentine’s Day. Any decrease in sales during these higher sales volume periods could have an adverse effect on our business, financial condition, or operating results for the entire fiscal year. Our quarterly results of operations have varied in the past and are likely to do so again in the future. As such, we believe that period-to-period comparisons of our results of operations should not be relied upon as an indication of our future performance.

Critical accounting policies and estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements required the use of estimates and judgments that affect the reported amounts of our assets, liabilities, revenues, and expenses. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an on-going basis. Actual results may differ from these estimates. There have been no significant changes to the critical accounting policies and estimates included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates. We continually monitor this risk and may develop strategies to manage it. We do not hold or issue financial instruments for trading purposes.

Interest rate risk

We are exposed to interest rate risks primarily through borrowings under our credit facility. Interest on our borrowings is based upon variable rates. We did not have any outstanding borrowings on the credit facility as of August 3, 2024, February 3, 2024, and July 29, 2023.

Item 4.Controls and Procedures

Evaluation of disclosure controls and procedures over financial reporting

We have established disclosure controls and procedures to ensure that material information relating to the Company is made known to the officers who certify our financial reports and to the members of our senior management and Board of Directors.

Based on management’s evaluation as of August 3, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), are effective to ensure that the information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is

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accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There were no changes to our internal controls over financial reporting during the 13 weeks ended August 3, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Part II - Other Information

Item 1.Legal Proceedings

See Note 6 to our consolidated financial statements, “Commitments and contingencies,” for information on legal proceedings.

Item 1A.Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended February 3, 2024, which could materially affect our business, financial condition, financial results, or future performance. There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended February 3, 2024.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth repurchases of our common stock during the second quarter of fiscal 2024:


Period	Total number of shares purchased (1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under plans or programs (in thousands) (2)
May 5, 2024 to June 1, 2024	227,498	$	390.77	227,498	$	1,694,463
June 2, 2024 to June 29, 2024	265,523		389.32	265,393		1,592,158
June 30, 2024 to August 3, 2024	57,299		389.99	56,961		1,570,158
13 weeks ended August 3, 2024	550,320		389.99	549,852		1,570,158

(1)

There were 549,852 shares repurchased as part of our publicly announced share repurchase program during the 13 weeks ended August 3, 2024 and there were 468 shares transferred from employees in satisfaction of minimum statutory tax withholding obligations upon the vesting of restricted stock during the period.

(2)

In March 2024, we announced the 2024 Share Repurchase Program pursuant to which the Company may repurchase up to $2.0 billion of the Company’s common stock. The 2024 Share Repurchase Program revoked the previously authorized but unused amounts from the 2022 Share Repurchase Program. As of August 3, 2024, $1.6 billion remained available under the 2024 Share Repurchase Program.

Item 3.Defaults Upon Senior Securities

None

Item 4.Mine Safety Disclosures

None

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Item 5.Other Information

During the 13 weeks ended August 3, 2024, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

Item 6.Exhibits

The exhibits listed in the Exhibit Index below are filed as part of this Quarterly Report on Form 10-Q.

EXHIBIT INDEX


			Incorporated by Reference
Exhibit Number	Description of document	Filed Herewith	Form	Exhibit Number	File Number	Filing Date

3.1	Certificate of Incorporation of Ulta Beauty, Inc., as amended through June 1, 2023		8-K	3.1	001-33764	6/07/2023
3.2	Bylaws of Ulta Beauty, Inc., as amended through June 1, 2023		8-K	3.3	001-33764	6/07/2023
31.1	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002	X
32	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	Inline XBRL Instance	X
101.SCH	Inline XBRL Taxonomy Extension Schema	X
101.CAL	Inline XBRL Taxonomy Extension Calculation	X
101.LAB	Inline XBRL Taxonomy Extension Labels	X
101.PRE	Inline XBRL Taxonomy Extension Presentation	X
101.DEF	Inline XBRL Taxonomy Extension Definition	X
104	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on August 29, 2024 on its behalf by the undersigned, thereunto duly authorized.


	ULTA BEAUTY, INC.

	By:	/s/ David C. Kimbell
		David C. Kimbell Chief Executive Officer and Director

	By:	/s/ Paula M. Oyibo
		Paula M. Oyibo Chief Financial Officer and Treasurer

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David C. Kimbell, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Ulta Beauty, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 29, 2024	By:	/s/ David C. Kimbell

		David C. Kimbell Chief Executive Officer and Director

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paula M. Oyibo, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Ulta Beauty, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 29, 2024	By:	/s/ Paula M. Oyibo
		Paula M. Oyibo Chief Financial Officer and Treasurer

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350 (adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, the Chief Executive Officer and Director of Ulta Beauty, Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarterly period ended August 3, 2024 (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


Date: August 29, 2024	By:	/s/ David C. Kimbell
		David C. Kimbell Chief Executive Officer and Director

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350 (adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002), I, the undersigned Chief Financial Officer and Treasurer of Ulta Beauty, Inc. (the “Company”), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarterly period ended August 3, 2024 (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 29, 2024	By:	/s/ Paula M. Oyibo
		Paula M. Oyibo Chief Financial Officer and Treasurer

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Aug. 03, 2024	Aug. 26, 2024
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	Aug. 03, 2024
Amendment Flag	false
Current Fiscal Year End Date	--02-01
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		47,114,727
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Trading Symbol	ULTA

Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 03, 2024	Feb. 03, 2024	Jul. 29, 2023
Current assets:
Cash and cash equivalents	$ 413,962	$ 766,594	$ 388,627
Receivables, net	200,863	207,939	174,444
Merchandise inventories, net	1,998,286	1,742,136	1,815,539
Prepaid expenses and other current assets	132,023	115,598	110,524
Prepaid income taxes	53,607	4,251	30,114
Total current assets	2,798,741	2,836,518	2,519,248
Property and equipment, net	1,225,850	1,182,335	1,073,144
Operating lease assets	1,599,735	1,574,530	1,549,146
Goodwill	10,870	10,870	10,870
Other intangible assets, net	357	510	718
Deferred compensation plan assets	46,280	43,516	40,087
Other long-term assets	55,575	58,732	55,547
Total assets	5,737,408	5,707,011	5,248,760
Current liabilities:
Accounts payable	566,904	544,001	521,315
Accrued liabilities	348,042	382,468	328,247
Deferred revenue	394,987	436,591	354,253
Current operating lease liabilities	281,301	283,821	287,359
Accrued income taxes		11,310
Total current liabilities	1,591,234	1,658,191	1,491,174
Non-current operating lease liabilities	1,647,698	1,627,271	1,593,040
Deferred income taxes	88,461	85,921	56,012
Other long-term liabilities	61,855	56,300	56,657
Total liabilities	3,389,248	3,427,683	3,196,883
Commitments and contingencies (Note 6)
Stockholders' equity:
Common stock, $0.01 par value, 400,000 shares authorized; 48,143, 49,123, and 50,139 shares issued; 47,300, 48,324, and 49,341 shares outstanding; at August 3, 2024 (unaudited), February 3, 2024, and July 29, 2023 (unaudited), respectively	481	491	501
Treasury stock-common, at cost	(106,491)	(83,032)	(82,229)
Additional paid-in capital	1,099,197	1,075,104	1,049,679
Retained earnings	1,354,973	1,286,765	1,083,926
Total stockholders' equity	2,348,160	2,279,328	2,051,877
Total liabilities and stockholders' equity	$ 5,737,408	$ 5,707,011	$ 5,248,760

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Aug. 03, 2024	Feb. 03, 2024	Jul. 29, 2023
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	48,143	49,123	50,139
Common stock, shares outstanding	47,300	48,324	49,341

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Consolidated Statements of Income
Net sales	$ 2,552,087	$ 2,529,809	$ 5,277,935	$ 5,164,072
Cost of sales	1,573,910	1,536,197	3,229,978	3,115,603
Gross profit	978,177	993,612	2,047,957	2,048,469
Selling, general and administrative expenses	644,821	600,692	1,310,734	1,212,821
Pre-opening expenses	4,155	1,278	7,074	1,936
Operating income	329,201	391,642	730,149	833,712
Interest income, net	(4,526)	(4,449)	(11,426)	(11,797)
Income before income taxes	333,727	396,091	741,575	845,509
Income tax expense	81,171	95,989	175,906	198,356
Net income	$ 252,556	$ 300,102	$ 565,669	$ 647,153
Net income per common share:
Basic	$ 5.32	$ 6.05	$ 11.83	$ 12.97
Diluted	$ 5.30	$ 6.02	$ 11.78	$ 12.90
Weighted average common shares outstanding:
Basic	47,505	49,617	47,815	49,885
Diluted	47,667	49,849	48,022	50,157

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023
Operating activities
Net income	$ 565,669	$ 647,153
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	130,053	119,862
Non-cash lease expense	163,481	152,867
Deferred income taxes	2,540	666
Stock-based compensation expense	19,272	21,539
Loss on disposal of property and equipment	5,204	3,878
Change in operating assets and liabilities:
Receivables	7,076	24,978
Merchandise inventories	(256,150)	(212,088)
Prepaid expenses and other current assets	(16,425)	19,722
Income taxes	(60,666)	8,194
Accounts payable	29,715	(38,752)
Accrued liabilities	(33,634)	(102,763)
Deferred revenue	(41,604)	(40,424)
Operating lease liabilities	(170,779)	(163,527)
Other assets and liabilities	15,127	(12,497)
Net cash provided by operating activities	358,879	428,808
Investing activities
Capital expenditures	(186,301)	(204,748)
Other investments	(5,091)	(1,687)
Net cash used in investing activities	(191,392)	(206,435)
Financing activities
Repurchase of common shares	(501,768)	(559,011)
Stock options exercised	9,196	9,147
Purchase of treasury shares	(23,459)	(21,759)
Debt issuance costs	(4,088)
Net cash used in financing activities	(520,119)	(571,623)
Net decrease in cash and cash equivalents	(352,632)	(349,250)
Cash and cash equivalents at beginning of period	766,594	737,877
Cash and cash equivalents at end of period	413,962	388,627
Supplemental information
Income taxes paid, net of refunds	233,249	189,166
Non-cash capital expenditures	$ 54,075	$ 51,860

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Treasury - Common Stock	Additional Paid-in Capital	Retained Earnings	Total
Balance at Jan. 28, 2023	$ 511	$ (60,470)	$ 1,023,997	$ 995,773	$ 1,959,811
Balance (in shares) at Jan. 28, 2023	51,120
Treasury--common stock (in shares) at Jan. 28, 2023					(756)
Increase (Decrease) in Stockholders' Equity
Net income				347,051	$ 347,051
Stock-based compensation			9,721		9,721
Stock options exercised and other awards	$ 1		8,926		8,927
Stock options exercised and other awards (in shares)	150
Purchase of treasury shares		(21,659)			$ (21,659)
Purchase of treasury shares (in shares)					(41)
Repurchase of common shares, including excise tax	$ (5)		(2,266)	(283,512)	$ (285,783)
Repurchase of common shares, including excise tax (in shares)	(541)
Treasury--common stock (in shares) at Apr. 29, 2023					(797)
Balance at Apr. 29, 2023	$ 507	(82,129)	1,040,378	1,059,312	$ 2,018,068
Balance (in shares) at Apr. 29, 2023	50,729
Balance at Jan. 28, 2023	$ 511	(60,470)	1,023,997	995,773	$ 1,959,811
Balance (in shares) at Jan. 28, 2023	51,120
Treasury--common stock (in shares) at Jan. 28, 2023					(756)
Increase (Decrease) in Stockholders' Equity
Net income					$ 647,153
Repurchase of common shares, including excise tax					$ (564,014)
Repurchase of common shares, including excise tax (in shares)					(1,135)
Treasury--common stock (in shares) at Jul. 29, 2023					(798)
Balance at Jul. 29, 2023	$ 501	(82,229)	1,049,679	1,083,926	$ 2,051,877
Balance (in shares) at Jul. 29, 2023	50,139				49,341
Balance at Apr. 29, 2023	$ 507	(82,129)	1,040,378	1,059,312	$ 2,018,068
Balance (in shares) at Apr. 29, 2023	50,729
Treasury--common stock (in shares) at Apr. 29, 2023					(797)
Increase (Decrease) in Stockholders' Equity
Net income				300,102	$ 300,102
Stock-based compensation			11,818		11,818
Stock options exercised and other awards			220		220
Stock options exercised and other awards (in shares)	4
Purchase of treasury shares		(100)			$ (100)
Purchase of treasury shares (in shares)					(1)
Repurchase of common shares, including excise tax	$ (6)		(2,737)	(275,488)	$ (278,231)
Repurchase of common shares, including excise tax (in shares)	(594)
Treasury--common stock (in shares) at Jul. 29, 2023					(798)
Balance at Jul. 29, 2023	$ 501	(82,229)	1,049,679	1,083,926	$ 2,051,877
Balance (in shares) at Jul. 29, 2023	50,139				49,341
Balance at Feb. 03, 2024	$ 491	(83,032)	1,075,104	1,286,765	$ 2,279,328
Balance (in shares) at Feb. 03, 2024	49,123				48,324
Treasury--common stock (in shares) at Feb. 03, 2024					(799)
Increase (Decrease) in Stockholders' Equity
Net income				313,113	$ 313,113
Stock-based compensation			10,082		10,082
Stock options exercised and other awards	$ 2		8,911		8,913
Stock options exercised and other awards (in shares)	153
Purchase of treasury shares		(23,283)			$ (23,283)
Purchase of treasury shares (in shares)					(44)
Repurchase of common shares, including excise tax	$ (6)		(2,275)	(285,129)	$ (287,410)
Repurchase of common shares, including excise tax (in shares)	(588)
Treasury--common stock (in shares) at May. 04, 2024					(843)
Balance at May. 04, 2024	$ 487	(106,315)	1,091,822	1,314,749	$ 2,300,743
Balance (in shares) at May. 04, 2024	48,688
Balance at Feb. 03, 2024	$ 491	(83,032)	1,075,104	1,286,765	$ 2,279,328
Balance (in shares) at Feb. 03, 2024	49,123				48,324
Treasury--common stock (in shares) at Feb. 03, 2024					(799)
Increase (Decrease) in Stockholders' Equity
Net income					$ 565,669
Repurchase of common shares, including excise tax					$ (501,846)
Repurchase of common shares, including excise tax (in shares)					(1,138)
Treasury--common stock (in shares) at Aug. 03, 2024					(843)
Balance at Aug. 03, 2024	$ 481	(106,491)	1,099,197	1,354,973	$ 2,348,160
Balance (in shares) at Aug. 03, 2024	48,143				47,300
Balance at May. 04, 2024	$ 487	(106,315)	1,091,822	1,314,749	$ 2,300,743
Balance (in shares) at May. 04, 2024	48,688
Treasury--common stock (in shares) at May. 04, 2024					(843)
Increase (Decrease) in Stockholders' Equity
Net income				252,556	$ 252,556
Stock-based compensation			9,190		9,190
Stock options exercised and other awards			283		283
Stock options exercised and other awards (in shares)	5
Purchase of treasury shares		(176)			(176)
Repurchase of common shares, including excise tax	$ (6)		(2,098)	(212,332)	$ (214,436)
Repurchase of common shares, including excise tax (in shares)	(550)
Treasury--common stock (in shares) at Aug. 03, 2024					(843)
Balance at Aug. 03, 2024	$ 481	$ (106,491)	$ 1,099,197	$ 1,354,973	$ 2,348,160
Balance (in shares) at Aug. 03, 2024	48,143				47,300

Business and basis of presentation

6 Months Ended

Aug. 03, 2024

Business and basis of presentation

Business and basis of presentation

1.Business and basis of presentation

As of August 3, 2024, the Company operated 1,411 stores across 50 states, as shown in the table below.


	Number of		Number of
Location	stores	Location	stores
Alabama	27	Montana	6
Alaska	3	Nebraska	5
Arizona	37	Nevada	16
Arkansas	11	New Hampshire	8
California	173	New Jersey	46
Colorado	27	New Mexico	7
Connecticut	19	New York	56
Delaware	4	North Carolina	46
Florida	100	North Dakota	4
Georgia	44	Ohio	47
Hawaii	4	Oklahoma	22
Idaho	10	Oregon	19
Illinois	55	Pennsylvania	45
Indiana	26	Rhode Island	5
Iowa	11	South Carolina	26
Kansas	14	South Dakota	3
Kentucky	16	Tennessee	32
Louisiana	18	Texas	133
Maine	3	Utah	15
Maryland	29	Vermont	1
Massachusetts	27	Virginia	35
Michigan	49	Washington	37
Minnesota	20	West Virginia	7
Mississippi	12	Wisconsin	21
Missouri	26	Wyoming	4
		Total	1,411

Summary of significant accounting policies

6 Months Ended

Aug. 03, 2024

Summary of significant accounting policies

Summary of significant accounting policies

2.Summary of significant accounting policies

Fiscal quarter

Use of estimates

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Recent accounting pronouncements not yet adopted

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

Securities and Exchange Commission (SEC) Climate-Related Disclosures

Revenue

6 Months Ended

Aug. 03, 2024

Revenue

Revenue

3.Revenue

Disaggregated revenue

The following table sets forth the approximate percentage of net sales by primary category:


	13 Weeks Ended		26 Weeks Ended
	August 3,	July 29,	August 3,	July 29,
(Percentage of net sales)	2024	2023	2024	2023
Cosmetics	39%	40%	40%	42%
Skincare	24%	23%	24%	22%
Haircare	20%	22%	19%	21%
Fragrance	11%	9%	11%	9%
Services	4%	4%	4%	4%
Other	2%	2%	2%	2%
	100%	100%	100%	100%

The following table provides a summary of the changes included in deferred revenue during the 13 and 26 weeks ended August 3, 2024 and July 29, 2023:


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands)	2024		2023		2024		2023
Beginning balance	$	391,446	$	350,123	$	428,788	$	388,583
Additions to contract liabilities (1)		120,189		114,374		253,584		237,770
Deductions to contract liabilities (2)		(123,818)		(118,430)		(294,555)		(280,286)
Ending balance	$	387,817	$	346,067	$	387,817	$	346,067

(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 $7,170 and $8,186 at August 3, 2024 and July 29, 2023, respectively.

Goodwill and other intangible assets

6 Months Ended

Aug. 03, 2024

Goodwill and Other Intangible Assets

Goodwill and other intangible assets

4.Goodwill and other intangible assets

Leases

6 Months Ended

Aug. 03, 2024

Leases

Leases

5.Leases

Lease cost

The following table presents a summary of operating lease costs:


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands)	2024		2023		2024		2023
Operating lease cost	$	88,080	$	83,121	$	176,235	$	168,249

Other information

The following table presents supplemental disclosures of cash flow information related to operating leases:


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Cash paid for operating lease liabilities (1)	$	203,766	$	196,638
Operating lease assets obtained in exchange for operating lease liabilities (non-cash)		188,686		140,750

(1)	Excludes $19,882 and $17,450 related to cash received for tenant incentives for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

Commitments and contingencies

6 Months Ended

Aug. 03, 2024

Commitments and contingencies

Commitments and contingencies

6.Commitments and contingencies

Debt

6 Months Ended

Aug. 03, 2024

Debt

Debt

7.Debt

As of August 3, 2024, February 3, 2024, and July 29, 2023, there were no borrowings outstanding under the credit facility.

As of August 3, 2024, the Company was in compliance with all terms and covenants of the Loan Agreement.

Fair value measurements

6 Months Ended

Aug. 03, 2024

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.

Stock-based compensation

6 Months Ended

Aug. 03, 2024

Stock-based compensation

Stock-based compensation

9.Stock-based compensation



	26 Weeks Ended
	August 3,	July 29,
	2024	2023
Volatility rate	33.0%	45.0%
Average risk-free interest rate	4.4%	3.8%
Average expected life (in years)	3.5	3.4
Dividend yield	—	—

Income taxes

6 Months Ended

Aug. 03, 2024

Income Taxes

Income taxes

10.Income taxes

Net income per common share

6 Months Ended

Aug. 03, 2024

Net income per common share

Net income per common share

11.Net income per common share

The following is a 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
	August 3,		July 29,		August 3,		July 29,
(In thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income	$	252,556	$	300,102	$	565,669	$	647,153

Denominator:
Weighted-average common shares – Basic		47,505		49,617		47,815		49,885
Dilutive effect of stock options and non-vested stock		162		232		207		272
Weighted-average common shares – Diluted		47,667		49,849		48,022		50,157

Net income per common share:
Basic	$	5.32	$	6.05	$	11.83	$	12.97
Diluted	$	5.30	$	6.02	$	11.78	$	12.90

Share repurchase program

6 Months Ended

Aug. 03, 2024

Share repurchase program

Share repurchase program

12.Share repurchase program

A summary of common stock repurchase activity is presented in the following table:


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Shares repurchased		1,138		1,135
Total cost of shares repurchased, including excise tax	$	501,846	$	564,014

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Aug. 03, 2024	May 04, 2024	Jul. 29, 2023	Apr. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 252,556	$ 313,113	$ 300,102	$ 347,051	$ 565,669	$ 647,153

Insider Trading Arrangements	6 Months Ended
Insider Trading Arrangements	Aug. 03, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of significant accounting policies (Policies)	6 Months Ended
Summary of significant accounting policies (Policies)	Aug. 03, 2024
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 2024 and 2023 ended on August 3, 2024 and July 29, 2023, 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 will be reflected in the consolidated financial statements in future periods.
Reclassifications	Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation.
Recent adopted accounting pronouncements not yet adopted	Recent accounting pronouncements not yet adopted Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. The guidance updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 on related disclosures. Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024 and should be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on related disclosures. Securities and Exchange Commission (SEC) Climate-Related Disclosures In March 2024, the SEC adopted rules intended to enhance and standardize climate-related disclosures in registration statements and annual reports. The new rules will require disclosure of material climate-related risks, including disclosure of Board of Directors' oversight and risk management activities, the material impacts of these risks to us and the quantification of material impacts to us as a result of severe weather events and other natural conditions. The rules also require disclosure of material greenhouse gas emissions and any material climate-related targets and goals. The new rules will be effective for annual reporting periods beginning in fiscal year 2025, except for the greenhouse gas emissions disclosures which will be effective for annual reporting periods beginning in fiscal year 2026, however the new rules have been stayed by the federal courts and, as a result, the SEC has indefinitely delayed their effectiveness. The Company is currently evaluating the impact of these new rules.

Business and basis of presentation (Tables)

6 Months Ended

Aug. 03, 2024

Business and basis of presentation

Schedule of stores operated by geographic area


	Number of		Number of
Location	stores	Location	stores
Alabama	27	Montana	6
Alaska	3	Nebraska	5
Arizona	37	Nevada	16
Arkansas	11	New Hampshire	8
California	173	New Jersey	46
Colorado	27	New Mexico	7
Connecticut	19	New York	56
Delaware	4	North Carolina	46
Florida	100	North Dakota	4
Georgia	44	Ohio	47
Hawaii	4	Oklahoma	22
Idaho	10	Oregon	19
Illinois	55	Pennsylvania	45
Indiana	26	Rhode Island	5
Iowa	11	South Carolina	26
Kansas	14	South Dakota	3
Kentucky	16	Tennessee	32
Louisiana	18	Texas	133
Maine	3	Utah	15
Maryland	29	Vermont	1
Massachusetts	27	Virginia	35
Michigan	49	Washington	37
Minnesota	20	West Virginia	7
Mississippi	12	Wisconsin	21
Missouri	26	Wyoming	4
		Total	1,411

Revenue (Tables)

6 Months Ended

Aug. 03, 2024

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
	August 3,	July 29,	August 3,	July 29,
(Percentage of net sales)	2024	2023	2024	2023
Cosmetics	39%	40%	40%	42%
Skincare	24%	23%	24%	22%
Haircare	20%	22%	19%	21%
Fragrance	11%	9%	11%	9%
Services	4%	4%	4%	4%
Other	2%	2%	2%	2%
	100%	100%	100%	100%

Summary of changes in deferred revenue


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands)	2024		2023		2024		2023
Beginning balance	$	391,446	$	350,123	$	428,788	$	388,583
Additions to contract liabilities (1)		120,189		114,374		253,584		237,770
Deductions to contract liabilities (2)		(123,818)		(118,430)		(294,555)		(280,286)
Ending balance	$	387,817	$	346,067	$	387,817	$	346,067

(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)

6 Months Ended

Aug. 03, 2024

Leases

Summary of components of lease cost for operating leases:

The following table presents a summary of operating lease costs:


	13 Weeks Ended				26 Weeks Ended
	August 3,		July 29,		August 3,		July 29,
(In thousands)	2024		2023		2024		2023
Operating lease cost	$	88,080	$	83,121	$	176,235	$	168,249

Schedule of supplemental disclosures 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
	August 3,		July 29,
(In thousands)	2024		2023
Cash paid for operating lease liabilities (1)	$	203,766	$	196,638
Operating lease assets obtained in exchange for operating lease liabilities (non-cash)		188,686		140,750

(1)	Excludes $19,882 and $17,450 related to cash received for tenant incentives for the 26 weeks ended August 3, 2024 and July 29, 2023, respectively.

Stock-based compensation (Tables)

6 Months Ended

Aug. 03, 2024

Stock-based compensation

Schedule of weighted average assumptions to determine grant date fair value of employee stock options



	26 Weeks Ended
	August 3,	July 29,
	2024	2023
Volatility rate	33.0%	45.0%
Average risk-free interest rate	4.4%	3.8%
Average expected life (in years)	3.5	3.4
Dividend yield	—	—

Net income per common share (Tables)

6 Months Ended

Aug. 03, 2024

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
	August 3,		July 29,		August 3,		July 29,
(In thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income	$	252,556	$	300,102	$	565,669	$	647,153

Denominator:
Weighted-average common shares – Basic		47,505		49,617		47,815		49,885
Dilutive effect of stock options and non-vested stock		162		232		207		272
Weighted-average common shares – Diluted		47,667		49,849		48,022		50,157

Net income per common share:
Basic	$	5.32	$	6.05	$	11.83	$	12.97
Diluted	$	5.30	$	6.02	$	11.78	$	12.90

Share repurchase program (Tables)

6 Months Ended

Aug. 03, 2024

Share repurchase program

Summary of common stock repurchase activity

A summary of common stock repurchase activity is presented in the following table:


	26 Weeks Ended
	August 3,		July 29,
(In thousands)	2024		2023
Shares repurchased		1,138		1,135
Total cost of shares repurchased, including excise tax	$	501,846	$	564,014

Business and basis of presentation (Details)	Aug. 03, 2024 store state
Stores by state
Number of stores operated	1,411
Number of states in which entity operates \| state	50
Alabama
Stores by state
Number of stores operated	27
Alaska
Stores by state
Number of stores operated	3
Arizona
Stores by state
Number of stores operated	37
Arkansas
Stores by state
Number of stores operated	11
California
Stores by state
Number of stores operated	173
Colorado
Stores by state
Number of stores operated	27
Connecticut
Stores by state
Number of stores operated	19
Delaware
Stores by state
Number of stores operated	4
Florida
Stores by state
Number of stores operated	100
Georgia
Stores by state
Number of stores operated	44
Hawaii
Stores by state
Number of stores operated	4
Idaho
Stores by state
Number of stores operated	10
Illinois
Stores by state
Number of stores operated	55
Indiana
Stores by state
Number of stores operated	26
Iowa
Stores by state
Number of stores operated	11
Kansas
Stores by state
Number of stores operated	14
Kentucky
Stores by state
Number of stores operated	16
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	29
Massachusetts
Stores by state
Number of stores operated	27
Michigan
Stores by state
Number of stores operated	49
Minnesota
Stores by state
Number of stores operated	20
Mississippi
Stores by state
Number of stores operated	12
Missouri
Stores by state
Number of stores operated	26
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	46
New Mexico
Stores by state
Number of stores operated	7
New York
Stores by state
Number of stores operated	56
North Carolina
Stores by state
Number of stores operated	46
North Dakota
Stores by state
Number of stores operated	4
Ohio
Stores by state
Number of stores operated	47
Oklahoma
Stores by state
Number of stores operated	22
Oregon
Stores by state
Number of stores operated	19
Pennsylvania
Stores by state
Number of stores operated	45
Rhode Island
Stores by state
Number of stores operated	5
South Carolina
Stores by state
Number of stores operated	26
South Dakota
Stores by state
Number of stores operated	3
Tennessee
Stores by state
Number of stores operated	32
Texas
Stores by state
Number of stores operated	133
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	35
Washington
Stores by state
Number of stores operated	37
West Virginia
Stores by state
Number of stores operated	7
Wisconsin
Stores by state
Number of stores operated	21
Wyoming
Stores by state
Number of stores operated	4

Summary of significant accounting policies (Details)	6 Months Ended
Summary of significant accounting policies (Details)	Aug. 03, 2024	Jul. 29, 2023
Summary of significant accounting policies
Fiscal quarter	91 days	91 days

Revenue - Disaggregated revenue (Details) - Sales Revenue - Product concentration	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Disaggregated revenue
Concentration (as a percent)	100.00%	100.00%	100.00%	100.00%
Cosmetics
Disaggregated revenue
Concentration (as a percent)	39.00%	40.00%	40.00%	42.00%
Skincare
Disaggregated revenue
Concentration (as a percent)	24.00%	23.00%	24.00%	22.00%
Haircare
Disaggregated revenue
Concentration (as a percent)	20.00%	22.00%	19.00%	21.00%
Fragrance
Disaggregated revenue
Concentration (as a percent)	11.00%	9.00%	11.00%	9.00%
Services
Disaggregated revenue
Concentration (as a percent)	4.00%	4.00%	4.00%	4.00%
Other
Disaggregated revenue
Concentration (as a percent)	2.00%	2.00%	2.00%	2.00%

Revenue - Deferred revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Summary of changes in deferred revenue
Beginning balance	$ 391,446	$ 350,123	$ 428,788	$ 388,583
Additions to contract liabilities	120,189	114,374	253,584	237,770
Deductions to contract liabilities	(123,818)	(118,430)	(294,555)	(280,286)
Ending balance	387,817	346,067	387,817	346,067
Other amounts included in deferred revenue	$ 7,170	$ 8,186	$ 7,170	$ 8,186

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Aug. 03, 2024	Aug. 03, 2024	Feb. 03, 2024	Jul. 29, 2023
Goodwill and Other Intangible Assets
Goodwill	$ 10,870	$ 10,870	$ 10,870	$ 10,870
Additional goodwill recognized	$ 0	$ 0

Leases - Lease cost and Other information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Leases
Initial lease term	10 years		10 years
Operating lease cost	$ 88,080	$ 83,121	$ 176,235	$ 168,249
Cash paid for operating lease liabilities			203,766	196,638
Operating lease assets obtained in exchange for operating lease liabilities (non-cash)			188,686	140,750
Excluded cash received for tenant incentives			$ 19,882	$ 17,450

Debt (Details) $ in Thousands	Mar. 13, 2024 USD ($)	Aug. 03, 2024 USD ($)	Feb. 03, 2024 USD ($)	Jul. 29, 2023 USD ($)
Notes payable
Outstanding borrowings under credit facility		$ 0	$ 0	$ 0
Amendment No. 3 to the Second Amended and Restated Loan Agreement
Notes payable
Contingent increase to revolving facility	$ 200,000
Interest rate margin (as a percent)	0.10%
Amendment No. 3 to the Second Amended and Restated Loan Agreement \| Minimum
Notes payable
Fixed charge coverage ratio covenant	1.0
Interest rate margin (as a percent)	1.50%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	us-gaap:SecuredOvernightFinancingRateSofrMember
Unused line fee (as a percent)	0.25%
Amendment No. 3 to the Second Amended and Restated Loan Agreement \| Maximum
Notes payable
Maximum borrowing capacity	$ 800,000
Interest rate margin (as a percent)	2.00%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	us-gaap:SecuredOvernightFinancingRateSofrMember
Unused line fee (as a percent)	0.375%
Amendment No. 3 to the Second Amended and Restated Loan Agreement \| Base Rate \| Minimum
Notes payable
Interest rate margin (as a percent)	0.50%
Amendment No. 3 to the Second Amended and Restated Loan Agreement \| Base Rate \| Maximum
Notes payable
Interest rate margin (as a percent)	1.00%
Amendment No. 3 to the Second Amended and Restated Loan Agreement \| Letters of credit
Notes payable
Maximum borrowing capacity	$ 50,000

Fair value measurements (Details) - Fair Value, Inputs, Level 2 - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Feb. 03, 2024
Fair value measurements
Fair value of financial liabilities	$ 48,720	$ 42,529	$ 42,653
Defined Benefit Plan, Tax Status [Extensible Enumeration]	us-gaap:NonqualifiedPlanMember	us-gaap:NonqualifiedPlanMember	us-gaap:NonqualifiedPlanMember

Stock-based compensation - Assumptions to Estimate Fair Value of Stock Options (Details) - Employee Stock Option [Member]	6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023
Weighted-average assumptions to estimate fair value
Volatility rate (as a percent)	33.00%	45.00%
Average risk-free interest rate (as a percent)	4.40%	3.80%
Average expected life	3 years 6 months	3 years 4 months 24 days
Dividend yield (as a percent)	0.00%	0.00%

Stock-based compensation - Stock Option Activity (Details) - Employee Stock Option [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Stock-based compensation
Weighted-average grant date fair value (in dollars per share)			$ 157.66	$ 199.15
Stock options
Stock-based compensation expense	$ 1,506	$ 1,749	$ 3,185	$ 3,219
Unrecognized stock-based compensation expense	$ 15,252		$ 15,252
Number of options
Granted (in shares)			56	42

Stock-based compensation - Restricted Stock Units (Details) - Restricted stock units - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Restricted stock units
Unrecognized stock-based compensation expense	$ 39,738		$ 39,738
Stock-based compensation expense	$ 4,997	$ 4,934	$ 9,385	$ 9,293
Number of shares
Granted (in shares)			51	45

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
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Performance-based restricted stock units
Unrecognized stock-based compensation expense	$ 25,089		$ 25,089
Stock-based compensation expense	$ 2,687	$ 5,135	$ 6,702	$ 9,027
Number of shares
Granted (in shares)			71	33

Income Taxes (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Aug. 16, 2022	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Income Taxes
Income tax expense		$ 81,171	$ 95,989	$ 175,906	$ 198,356
Effective tax rate (as a percent)		24.30%	24.20%	23.70%	23.50%
Alternative minimum tax	15.00%
Excise tax	1.00%

Net income per common share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Numerator:
Net income	$ 252,556	$ 300,102	$ 565,669	$ 647,153
Denominator:
Weighted-average common shares - Basic	47,505	49,617	47,815	49,885
Dilutive effect of stock options and non-vested stock	162	232	207	272
Weighted-average common shares - Diluted	47,667	49,849	48,022	50,157
Net income per common share:
Basic	$ 5.32	$ 6.05	$ 11.83	$ 12.97
Diluted	$ 5.30	$ 6.02	$ 11.78	$ 12.90

Net income per common share - Anti-dilutive Shares (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Aug. 03, 2024	Jul. 29, 2023	Aug. 03, 2024	Jul. 29, 2023
Net income per common share
Employee stock options and restricted stock units excluded from the computation of net income per common share	184	127	195	133

Share repurchase program (Details) - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	3 Months Ended				6 Months Ended
	Mar. 31, 2022	Aug. 03, 2024	May 04, 2024	Jul. 29, 2023	Apr. 29, 2023	Aug. 03, 2024	Jul. 29, 2023	Mar. 31, 2024
Share repurchase program
Shares repurchased (in shares)						1,138	1,135
Total cost of shares repurchased, including excise tax		$ 214,436	$ 287,410	$ 278,231	$ 285,783	$ 501,846	$ 564,014
2022 Share Repurchase Program \| Maximum
Share repurchase program
Increase in amount authorized for share repurchase program	$ 2,000,000
2024 Share Repurchase Program \| Maximum
Share repurchase program
Authorized amount of share repurchase program								$ 2,000,000

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