Ulta Beauty

“The markets for beauty and wellness products and salon services are highly competitive with few barriers to entry. With regard to beauty and wellness products, we compete against a diverse group of retailers, both small and large, including mass merchandisers, specialty retailers, online capabilities of national retailers, pure-play e-commerce companies, online marketplaces (including those operated by social media platforms), and drug stores.”

Annual report 2026A · The company itself

“The Company’s private label brand, Ulta Beauty Collection, is an important opportunity for growth and profit contribution. The Company’s objective is to provide quality, trend-right private label products to continue to strengthen its guests’ perception of Ulta Beauty.”

Annual report 2026A · The company itself

“(“we,” “us,” “our,” “Ulta Beauty,” or the “Company”) is an international specialty beauty retailer and a premier beauty destination for cosmetics, fragrance, skin care products, wellness products, hair care products, and salon services.”

Annual report 2026A · The company itself

“Brand Building and Merchandising Innovation ​ Ulta U.S.’s core assortment offers one of the most extensive product and brand selections in its industry, with approximately 30,000 products from approximately 600 well-established and emerging beauty and wellness brands across all categories and price points offered to guests across Ulta U.S.’s stores, Ulta.com, and mobile applications.”

Annual report 2026A · The company itself

“Business Overview Ulta Beauty, Inc. (“we,” “us,” “our,” “Ulta Beauty,” or the “Company”) is an international specialty beauty retailer and a premier beauty destination for cosmetics, fragrance, skin care products, wellness products, hair care products, and salon services.”

Annual report 2026A · The company itself

“Ulta U.S. competes across all major categories as well as a range of price points by offering prestige, mass, and salon products.”

Annual report 2026A · The company itself

“The Company’s associates and management teams are essential to its strategy. The Company uses a combination of existing managers, promoted associates, and external hires to support its operations and bring necessary skills to execute its business priorities.”

Annual report 2026A · The company itself

“Macroeconomic conditions, including inflation and elevated interest rates, as well as labor, transportation, and shipping cost pressures, have had, and may continue to have, a negative impact on our business, financial condition, profitability, 13 Table of Contents and cash flows.”

Annual report 2026A · The company itself

“Furthermore, the success of our business depends significantly on our ability to attract, motivate, and retain qualified associates, including store managers and other store associates, distribution center associates, and corporate personnel. Competition for this type of personnel is intense, and we may not be successful in attracting, assimilating, and retaining the associates required to grow and operate our business profitably.”

Annual report 2026A · The company itself

“As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage associates, but also the wages paid to our other hourly associates. Further, should we fail to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our customer service to suffer.”

Annual report 2026A · The company itself

“All brand partners and respective subcontractors and their facilities are subject to the applicable Ulta Vendor Standards, which set forth the ethical, legal, social, and workplace standards that must be met to do business with the Company.”

Annual report 2026A · The company itself

“Wellness ​ The definition of traditional beauty is expanding as wellness and beauty converge and as consumers deepen the connection between how they express themselves to their overall self-care and wellness. The Company believes Ulta U.S. is well-positioned to capture this growth opportunity and support its guests’ wellness journeys.”

Annual report 2026A · The company itself

“There is also increased focus, including by investors, guests, and other stakeholders, on climate change and other environmental, social, governance, and sustainability matters, including single use plastic, energy, waste, and worker safety. Concern about climate change might cause consumer preferences to change, including moving away from products or ingredients considered to have high climate change impact and towards products that are more sustainably made, and we expect to incur additional costs in connection with our initiatives in this area.”

Annual report 2026A · The company itself

“If we are unable to gauge beauty trends and react to changing consumer preferences in a timely manner, our sales may decrease. We believe our success depends in substantial part on our ability to: ● recognize and define product and beauty trends; ● anticipate, gauge, and react to changing consumer preferences (including relating to sustainability of product sources and packaging, ingredient transparency, and animal welfare) in a timely manner; ● translate market trends into appropriate, saleable product and service offerings in our stores and salons in advance of our competitors; ● develop and maintain vendor relationships that provide us access to the newest merchandise on reasonable terms; and ● distribute merchandise to our stores in an efficient and effective manner and maintain appropriate in-stock levels.”

Annual report 2026A · The company itself

“Wellness by Ulta Beauty extends Ulta U.S.’s product offering to include nutrition & supplements (such as vitamins, supplements, and fitness-related tools); intimate care (such as feminine hygiene, as well as period, prenatal and postnatal, and menopausal care); rest & reset (such as aromatherapy, spa essentials, and sleep support); and essential routines (such as oral care, wearables, and devices).”

Annual report 2026A · The company itself

“The markets for beauty and wellness products and salon services are highly competitive with few barriers to entry. With regard to beauty and wellness products, we compete against a diverse group of retailers, both small and large, including mass merchandisers, specialty retailers, online capabilities of national retailers, pure-play e-commerce companies, online marketplaces (including those operated by social media platforms), and drug stores.”

Annual report 2026A · The company itself

“UB MarketplaceTM ​ In fiscal 2025, the Company launched UB MarketplaceTM, an integrated online marketplace accessible through Ulta U.S.’s e-commerce channels. The marketplace enables Ulta U.S. to expand its assortment for its guests and offer a broader and complementary array of beauty, wellness, and lifestyle products from both established and 7 Table of Contents emerging brands with minimal inventory risk to its business.”

Annual report 2026A · The company itself

“We offer most of our beauty products for sale through our Ulta.com website and through our mobile applications.”

Annual report 2026A · The company itself

“Our e-commerce operations are increasingly important to our business. The Ulta.com website and our mobile applications serve as an effective extension of our marketing and prospecting strategies by exposing potential new guests to the Ulta Beauty brand, product offerings, and enhanced content.”

Annual report 2026A · The company itself

“Ulta U.S. operates more than 1,500 retail stores in the U.S., located predominantly in convenient, high-traffic locations such as power strip centers. The typical store in the U.S. is approximately 10,000 square feet, including approximately 950 square feet dedicated to a full-service salon.”

Annual report 2026A · The company itself

“The Company’s real estate objective is to make Ulta U.S. accessible and convenient to more consumers across a variety of markets. The Company believes that, over the long term, it has the potential to grow its store footprint to more than 1,800 freestanding Ulta U.S. stores.”

Annual report 2026A · The company itself

“An inability to execute our real estate growth and optimization strategy could affect our financial results. Our financial performance could be affected by our ability to successfully grow and optimize our retail store footprint.”

Annual report 2026A · The company itself

“Align Its Foundation for Future Success ​ To successfully achieve its long-term growth ambitions, build upon its leadership position, and deliver value to stakeholders, the Company is focused on optimizing its ways of working, streamlining its cost structure, and cultivating an engaging, associate-centered culture. This work includes organizational and process changes to accelerate decision-making, remove friction, and align teams and resources around guest-centric goals.”

Annual report 2026A · The company itself

“Supply chain ​ The Company aims to develop and operate a dynamic and agile end-to-end supply chain that supports operational efficiency, performance, and guest experience and fuels organizational growth effectively. This includes enhanced systems and processes as well as a modernized distribution center network to support new store and e-commerce growth.”

Annual report 2026A · The company itself

“Ulta U.S. is directing a growing percentage of its marketing expense towards digital, social media, and streaming advertising to drive effective communication with existing guests and consideration amongst those who have not yet shopped with Ulta U.S. In social media channels, influencers and affiliates play an important role in beauty, and Ulta U.S engages talent from the UB Collective, its annual class of influencers, Ulta Beauties, its associate ambassador program, and UB Creates, its affiliate program, to support its social media marketing efforts.”

Annual report 2026A · The company itself

“Align Its Foundation for Future Success ​ To successfully achieve its long-term growth ambitions, build upon its leadership position, and deliver value to stakeholders, the Company is focused on optimizing its ways of working, streamlining its cost structure, and cultivating an engaging, associate-centered culture. This work includes organizational and process changes to accelerate decision-making, remove friction, and align teams and resources around guest-centric goals.”

Annual report 2026A · The company itself

“We are dependent on a variety of information systems, including management, supply chain and financial information, and various other processes and transactions, to effectively manage our business. We are also expanding and upgrading our information systems (including the recent replacement of our enterprise resource planning platform) to support historical and expected future growth.”

Annual report 2026A · The company itself

“Information technology ​ Ulta U.S. is committed to using technology to enhance its competitive position. Ulta U.S. leverages its technology infrastructure and systems to gain operational efficiencies through more effective use of its systems, people, and processes.”

Annual report 2026A · The company itself

“Ulta U.S. is directing a growing percentage of its marketing expense towards digital, social media, and streaming advertising to drive effective communication with existing guests and consideration amongst those who have not yet shopped with Ulta U.S. In social media channels, influencers and affiliates play an important role in beauty, and Ulta U.S engages talent from the UB Collective, its annual class of influencers, Ulta Beauties, its associate ambassador program, and UB Creates, its affiliate program, to support its social media marketing efforts.”

Annual report 2026A · The company itself

“(“we,” “us,” “our,” “Ulta Beauty,” or the “Company”) is an international specialty beauty retailer and a premier beauty destination for cosmetics, fragrance, skin care products, wellness products, hair care products, and salon services.”

Annual report 2026A · The company itself

“As we expand internationally, the magnitude of the effects of geopolitical events, including the ongoing conflicts in Ukraine and the Middle East and cartel violence and related unrest in Mexico, on the Company’s business, financial condition, profitability, and/or cash flow could be greater than when the Company’s operations were solely U.S.-based.”

Annual report 2026A · The company itself

“Any significant interruption in the operation of our supply chain infrastructure, such as disruptions in our information systems, disruptions in operations due to fire, natural disasters, or other catastrophic events, labor disagreements, inventory availability (including as a result of tariffs or trade barriers), or shipping and transportation problems, could drastically reduce our ability to receive and process orders and provide products and services to our stores and guests, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.”

Annual report 2026A · The company itself

“Any event causing a disruption of manufacturing or imports from such foreign countries, including the imposition of import restrictions, increased customs duties, tariffs, trade barriers (including quotas), trade wars, geopolitical events, political changes, and legal or economic restrictions on overseas suppliers’ ability to produce and deliver products, could result in substantial disruptions in our supply chain (including inventory availability) and materially harm our operations.”

Annual report 2026A · The company itself

“Macroeconomic conditions, including inflation and elevated interest rates, as well as labor, transportation, and shipping cost pressures, have had, and may continue to have, a negative impact on our business, financial condition, profitability, 13 Table of Contents and cash flows.”

Annual report 2026A · The company itself

“As of the end of fiscal 2025, Ulta U.S. operates four regional distribution centers and two market fulfillment centers that support both stores and e-commerce demand, and one fast fulfillment center that supports e-commerce orders only. Market fulfillment centers are smaller than regional distribution centers and focus on the most productive products, enabling us to improve service and responsiveness, especially in markets with high store and population density.”

Annual report 2026A · The company itself

“Product is delivered to stores using a broad network of contract and local pool (final mile) carriers.”

Annual report 2026A · The company itself

“Continuing dynamic global trade conditions and elevated tariff levels could contribute to increased input costs, supply chain disruption, pricing volatility, and heightened economic uncertainty, and it could be time-consuming and expensive for us to alter our operations in order to adapt to this environment.”

Annual report 2026A · The company itself

“Any significant interruption in the operation of our supply chain infrastructure, such as disruptions in our information systems, disruptions in operations due to fire, natural disasters, or other catastrophic events, labor disagreements, inventory availability (including as a result of tariffs or trade barriers), or shipping and transportation problems, could drastically reduce our ability to receive and process orders and provide products and services to our stores and guests, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.”

Annual report 2026A · The company itself

“Any event causing a disruption of manufacturing or imports from such foreign countries, including the imposition of import restrictions, increased customs duties, tariffs, trade barriers (including quotas), trade wars, geopolitical events, political changes, and legal or economic restrictions on overseas suppliers’ ability to produce and deliver products, could result in substantial disruptions in our supply chain (including inventory availability) and materially harm our operations.”

Annual report 2026A · The company itself

“Macroeconomic conditions, including inflation and elevated interest rates, as well as labor, transportation, and shipping cost pressures, have had, and may continue to have, a negative impact on our business, financial condition, profitability, 13 Table of Contents and cash flows.”

Annual report 2026A · The company itself

“In addition, shipping and transportation costs represent a component of our cost structure and an increase in shipping and transportation costs, including as a result of inflationary pressures, could have a material adverse effect on our business, financial condition, profitability, and cash flows.”

Annual report 2026A · The company itself

“Uncertainty regarding the regulation of AI and other burgeoning technologies may require significant resources to modify and maintain business practices to comply with U.S. and non-U.S. laws, the nature of which cannot be determined at this time. An increasing number of jurisdictions around the globe, including several U.S. states, have already proposed or enacted laws governing AI. Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging. These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or 17 Table of Contents penalties, require us to change our business practices, or prevent or limit our use of AI.”

Annual report 2026A · The company itself

“The development and use or misuse of AI or the failure to use AI present risks and challenges that may negatively affect our business. Failure to adapt to a rapidly changing technological environment or failure to adopt emerging technologies, including advances relating to AI and agentic commerce, in a timely manner could negatively affect our business. For example, if we are unable to match or surpass the advances in technologies and capabilities of our competitors for either external (guest)-facing or internal use cases, our competitive position could be adversely affected.”

Annual report 2026A · The company itself

“The health of the economy may affect consumer purchases of discretionary items such as beauty products and salon services, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.”

Annual report 2026A · The company itself

“Scientific consensus shows that carbon dioxide and other greenhouse gases in the atmosphere have caused and will in the future cause changes in weather patterns around the globe. Climatologists predict these changes will result in the increased frequency of extreme weather events and natural disasters, which could disrupt our business operations or those of our suppliers.”

Annual report 2026A · The company itself

“The health of the economy may affect consumer purchases of discretionary items such as beauty products and salon services, which could have a material adverse effect on our business, financial condition, profitability, and cash flows.”

Annual report 2026A · The company itself

“Despite the security measures we have in place and continual vigilance in regard to the protection of sensitive information, our systems and those of our third-party service providers may be vulnerable to security breaches, denial-of-service attacks, break-ins, phishing attacks, social engineering, acts of vandalism, computer viruses, misplaced or lost data, human errors, or other similar events.”

Annual report 2026A · The company itself

“Continuing dynamic global trade conditions and elevated tariff levels could contribute to increased input costs, supply chain disruption, pricing volatility, and heightened economic uncertainty, and it could be time-consuming and expensive for us to alter our operations in order to adapt to this environment.”

Annual report 2026A · The company itself

“In addition, shipping and transportation costs represent a component of our cost structure and an increase in shipping and transportation costs, including as a result of inflationary pressures, could have a material adverse effect on our business, financial condition, profitability, and cash flows.”

Annual report 2026A · The company itself

“Recent or potential future legislative initiatives may seek to increase the federal minimum wage in the United States, as well as the minimum wages in certain individual states or markets. As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage associates, but also the wages paid to our other hourly associates.”

Annual report 2026A · The company itself

“Our salon operations are subject to state board regulations and state licensing requirements for our stylists and salon procedures.”

Annual report 2026A · The company itself

“Failure to maintain compliance with these regulatory and licensing requirements could jeopardize the viability of our salons. ● We operate stores in California, which has enacted legislation commonly referred to as “Proposition 65” requiring that “clear and reasonable” warnings be given to consumers who are exposed to chemicals known to the State of California to cause cancer or reproductive toxicity.”

Annual report 2026A · The company itself

“Issues that might pose a reputational risk include failure of our cybersecurity measures to protect against cybersecurity incidents; product liability and product recalls; inaccurate claims regarding the sustainability or content/ingredients of the products sold in our stores, including in connection with our Conscious Beauty program; our social media activity; our handling of issues relating to corporate responsibility matters, including our responses to such matters; failure to comply with applicable laws and regulations or enforce our own policies; public stances on controversial social or political issues; concerns surrounding labor, environmental, workplace 20 Table of Contents safety, and other practices that may vary from U.S. standards in any of our foreign vendors or partners, whether directly or indirectly; and any of the other risks enumerated in these risk factors.”

Annual report 2026A · The company itself

“Complex local, state, national, and international/foreign laws and regulations, such as the California Consumer Privacy Act and the EU General Data Protection Regulation, apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. These privacy and data protection laws and regulations are quickly evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations and enforcement.”

Annual report 2026A · The company itself

“We do not own or operate any manufacturing facilities and therefore depend upon independent third-party vendors for the manufacture of all products manufactured uniquely for Ulta Beauty, including Ulta Beauty Collection and Ulta Beauty branded gifts with purchase and other promotional products.”

Annual report 2026A · The company itself

“There is also increased focus, including by investors, guests, and other stakeholders, on climate change and other environmental, social, governance, and sustainability matters, including single use plastic, energy, waste, and worker safety. Concern about climate change might cause consumer preferences to change, including moving away from products or ingredients considered to have high climate change impact and towards products that are more sustainably made, and we expect to incur additional costs in connection with our initiatives in this area.”

Annual report 2026A · The company itself

“Any such new requirements could increase our operating costs for things like energy or packaging, as well as our product supply chain and distribution costs.”

Annual report 2026A · The company itself

“Any such new requirements could increase our operating costs for things like energy or packaging, as well as our product supply chain and distribution costs.”

Annual report 2026A · The company itself

“Drive Core Business Growth ​ Ulta U.S. operates within the large and growing U.S. beauty products and salon services industry. In 2025, this market represented approximately $126 billion in sales according to Euromonitor International and IBIS World Inc.”

Annual report 2026A · The company itself

“In 2025, we expanded internationally through our acquisition of Space NK and the establishment of a joint venture in Mexico and a franchise relationship in the Middle East.”

Annual report 2026A · The company itself

“Location ​ Number of stores United States ​ 1,505 International (Company-operated) ​ 86 Total ​ 1,591 ​ Distribution centers, fast fulfillment center, and market fulfillment centers Our standard distribution center (“DC”), fast fulfillment center (“FFC”), and market fulfilment center (“MFC”) lease provides for a fixed minimum annual rent and generally has a 10- or 15-year initial term with three or four renewal options with terms of five years each.”

Annual report 2026A · The company itself

“In the Middle East, the Company has a franchise partnership with Alshaya Group, a leading international franchise operator with substantial expertise in the consumer market in the Middle East, whereby Alshaya licenses the Ulta Beauty brand name and operating model from the Company to launch and operate Ulta Beauty-branded stores in the Middle East. The Company earns royalties from sales generated by these operations.”

Annual report 2026A · The company itself

“In 2025, we expanded internationally through our acquisition of Space NK and the establishment of a joint venture in Mexico and a franchise relationship in the Middle East.”

Annual report 2026A · The company itself

“In the Middle East, the Company has a franchise partnership with Alshaya Group, a leading international franchise operator with substantial expertise in the consumer market in the Middle East, whereby Alshaya licenses the Ulta Beauty brand name and operating model from the Company to launch and operate Ulta Beauty-branded stores in the Middle East. The Company earns royalties from sales generated by these operations.”

Annual report 2026A · The company itself

“On July 10, 2025, the Company announced the acquisition of Space NK, a leading British beauty retailer. Space NK is a curator of some of the world’s most innovative beauty brands and a go-to destination for beauty discovery in its stores in the U.K. and Ireland as well as online.”

Annual report 2026A · The company itself

“In Mexico, the Company has a joint venture partnership with Grupo Axo, whereby the joint venture licenses the Ulta Beauty brand name and operating model from the Company to launch and operate Ulta Beauty-branded stores in Mexico. Grupo Axo is an experienced operator of global brands with substantial expertise in the consumer market in Mexico.”

Annual report 2026A · The company itself

“In 2025, we expanded internationally through our acquisition of Space NK and the establishment of a joint venture in Mexico and a franchise relationship in the Middle East.”

Annual report 2026A · The company itself