Ulta Beauty (ULTA) Risk Factor Changes

Unexpected and undesirable side effects caused by our Ulta Beauty branded products for which we have not provided sufficient label warnings or salon services, which may have been performed negligently, could result in…

our website and mobile applications content, rights to our domain name www.ulta.com, and trade secrets and know-how with respect to our Ulta Beauty branded product formulations, product sourcing, sales and marketing,…

From time to time, we are subject to litigation, including potential class action and single-plaintiff litigation, and other legal or regulatory proceedings or claims in the ordinary course of our business operations…

The formulation, manufacturing, packaging, labeling, distribution, sale, and storage of our vendors’ products and our Ulta Beauty branded products are also subject to extensive regulation by various federal agencies i…

In our U.S.

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, prote…

In the ordinary course of our business, we collect, process, and store sensitive and confidential data, including our proprietary business information and that of our guests, suppliers, and business partners, and pers…

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 have a $1.0 billion secured revolving credit facility with a term expiring in March 2029.

operations may also be hurt by health concerns regarding infectious diseases in countries in which our merchandise is produced, adverse weather conditions or natural disasters that may occur overseas, or acts of war o…

We directly source the majority of our Ulta Beauty Collection components and Ulta Beauty branded gifts with purchase and other promotional products through third-party vendors using foreign factories.

We currently operate four regional distribution centers, which house the distribution operations for Ulta U.S.

believe that our omnichannel participation is a distinct advantage for us due to synergies and the potential for new guests, supporting product offerings through these channels can create issues that have the potentia…

Our business requires disciplined execution at all levels of our organization.

Additionally, our comparable sales and quarterly financial performance have historically been affected, and may continue to be affected, by any of the other types of risks and events described in these risk factors.

Our comparable sales and quarterly financial performance may fluctuate due to seasonality and other factors outside of our control, which could result in a decline in the price of our common stock.

Climate change could adversely impact our business operations and/or our supply chain.

Epidemics, pandemics, and other public health crises, natural disasters, such as hurricanes, tornados, wildfires, earthquakes, and mudslides, as well as conflicts, such as wars, acts of violence, and terrorism, have r…

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, financia…

The risks described below reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect our business, financial condition, results of operations, or future growth.

We are also subject to provisions of Delaware law that, in general, prohibit any business combination with a beneficial owner of 15% or more of our common stock for three years after the stockholder becomes a 15% stoc…

requiring advance notice for raising business matters or nominating directors at stockholders’ meetings.

prohibiting our stockholders from calling a special meeting of stockholders; and

prohibiting stockholder actions by written consent;

authorizing our Board of Directors to issue preferred stock and additional shares of our common stock without stockholder approval;

Our certificate of incorporation and bylaws contain provisions that may delay or prevent a change in control, discourage bids at a premium over the market price of our common stock, and harm the market price of our co…

Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent a change in control, even if a sale of the Company would be beneficial to our stockholders, which could cause our sto…

We regard our trademarks, trade dress, copyrights, trade secrets, know-how, and similar intellectual property as critical to our success.

Our large workforce makes us vulnerable to changes in labor and employment laws.

the sale of our Ulta Beauty branded products.

From time to time, we are subject to litigation, including potential class action and single-plaintiff litigation and other legal or regulatory proceedings or claims in the ordinary course of our business operations r…

In the ordinary course of our business, we collect, process, and store sensitive and confidential data, including our proprietary business information and that of our guests, suppliers, and business partners, and pers…

Epidemics, pandemics, or other public health crises, natural disasters, such as hurricanes, tornados, wildfires, earthquakes, and mudslides, as well as acts of violence or terrorism, have resulted in the temporary clo…

As a result of our real estate strategy, most of our stores are located in off-mall shopping areas known as power centers.

A reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located could significantly reduce our sales and leave us with excess inventory, which could hav…

The markets for beauty products and salon services are highly competitive with few barriers to entry.

In addition, a general deterioration in economic conditions could adversely affect our commercial partners including our brand partners as well as the real estate developers and landlords who we rely on to construct a…

premium salon services.

Our results of operations may be materially affected by conditions in the capital markets and the economy generally.

Although we currently do not operate stores outside the United States, geopolitical events, including the ongoing conflicts in Ukraine and the Middle East, have caused greater uncertainty in the global economy and exa…

We also use social media platforms as marketing tools.

Given the pervasive use of social media platforms, including blogs, social media websites, and other forms of internet-based and mobile communications, negative commentary regarding us or the products we sell may be a…

Use of social media may adversely impact our reputation.

hurricanes, tornadoes, wildfires, earthquakes, mudslides, other natural disasters, epidemics or pandemics, and geopolitical events.

actions by our existing or new competitors; and

seasonal fluctuations due to weather conditions;

timing and effectiveness of our marketing activities;

cannibalization of existing store sales by new store openings;

timing and concentration of new store openings, including additional human resource requirements and related pre-opening and other start-up costs;

the effectiveness of our inventory management;

performance of our new and remodeled stores;

changes in our merchandising strategy or mix;

general U.S.

Our comparable sales and quarterly results of operations have fluctuated in the past, and we expect them to continue to fluctuate in the future.

Our continued and future growth largely depends on our ability to implement our long-range strategic, operational and financial plans and successfully open and operate new stores profitably.

We may not be able to sustain our growth plans and successfully implement our long-range strategic, operational and financial plans, which could have a material adverse effect on our business, financial condition, pro…

We regard our trademarks, trade dress, copyrights, trade secrets, know-how, and similar intellectual property as critical to our success.

We require many of our vendors to carry their own insurance, and we have indemnity agreements with many of our vendors, but we cannot be assured that (1) any specific claim or lawsuit will be subject to a vendor’s ins…

Any insurance we carry reflects deductibles, self-insured retentions, limits of liability, and similar provisions that we believe are prudent based on our operations.

We maintain insurance coverages with third-party insurers.

We are subject to antibribery and corruption laws, such as the U.S.

Our sizable workforce makes us vulnerable to changes in labor and employment laws.

provide a differentiated guest experience.

From time to time, we may make strategic acquisitions and participate in joint ventures and partnerships.

We may not realize the anticipated benefits of acquisitions, joint ventures, and partnerships, or these benefits may take longer to realize than expected.

Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations, and financial condition.

price increases of raw materials used in the manufacturing of our private label brand merchandise and other risks generally encountered by entities that source, manufacture, market, and retail private label brand merc…

sourcing and manufacturing outside the United States, including foreign laws and regulations, political unrest, disruptions or delays in cross-border shipments, changes in economic conditions in foreign countries, exc…

our ability to successfully navigate and avoid claims related to the intellectual property or other proprietary rights of third parties;

our ability to successfully protect our intellectual property or other proprietary rights (e.g., defending against counterfeit, knock-offs, grey-market, infringing, or otherwise unauthorized goods);

claims and lawsuits resulting from injuries associated with the use of our private label brand merchandise;

potential mandatory or voluntary product recalls;

our failure or our manufacturers’ failure to comply with applicable regulatory requirements, including product safety, working age and conditions, anti-corruption, import and customs, and retail sale restrictions;

our ability to successfully and profitably conduct sourcing and manufacturing activities internally or with third-party agents, manufacturers, and distributors;

In addition to merchandise provided by vendors, we offer private label brand merchandise, which subjects us to certain risks, including:

Our private label brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market, and retail exclusive private label brand merchandise.

safety, and other practices that may vary from U.S.

Negative publicity or perceptions involving us or our brands, products, associates, operations, vendors, spokespersons, or marketing and other partners may negatively impact our reputation and adversely affect our abi…

Harm to our reputation could adversely impact our ability to attract and retain guests, associates, vendors, and/or other partners.

In addition, our international operations are subject to a number of unique risks, including those relating to local economic and political conditions; government regulation; restrictive trade policies; restrictions o…

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.

Expanding into international markets exposes us to additional risks.

Our financial performance could be affected by our ability to successfully grow and optimize our retail store footprint.

An inability to execute our real estate growth and optimization strategy could affect our financial results.

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

Although none of our associates are currently covered under collective bargaining agreements, we cannot guarantee that our associates will not elect to be represented by labor unions in the future.

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.

penalties, require us to change our business practices, or prevent or limit our use of AI.

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.

The development and use or misuse of AI or the failure to use AI present risks and challenges that may negatively affect our business.

We must maintain sufficient inventory levels of merchandise that our guests desire to successfully operate our business.

If we are not successful in managing our inventory balances, our sales may decline and our results of operations may be negatively affected.

We have historically experienced and expect to continue to experience seasonal fluctuations in our net sales, operating income, and net income.

to changes in guest requirements more quickly, devote greater resources to the marketing and sale of their products, generate greater brand recognition, or adopt more aggressive pricing policies than we can.

We believe the principal bases upon which we compete are the breadth of merchandise, our value proposition, the quality of our guests’ shopping experience (including through our omnichannel offerings), and the conveni…

The markets for beauty and wellness products and salon services are highly competitive with few barriers to entry.

In addition, a general deterioration in economic conditions could adversely affect our commercial partners, including our brand partners, as well as the real estate developers and landlords who we rely on to construct…

Our results of operations may be materially affected by conditions in the capital markets and the U.S.

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 busi…

and cash flows.