Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Mar. 22, 2021 | Jul. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | ULTA BEAUTY, INC. | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Central Index Key | 0001403568 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 30, 2021 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-30 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 8,127,797,000 | ||
Entity Common Stock, Shares Outstanding | 56,205,592 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ULTA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,046,051 | $ 392,325 |
Short-term investments | 110,000 | |
Receivables, net | 193,109 | 139,337 |
Merchandise inventories, net | 1,168,215 | 1,293,701 |
Prepaid expenses and other current assets | 107,402 | 103,567 |
Prepaid income taxes | 16,387 | |
Total current assets | 2,514,777 | 2,055,317 |
Property and equipment, net | 995,795 | 1,205,524 |
Operating lease assets | 1,504,614 | 1,537,565 |
Goodwill | 10,870 | 10,870 |
Other intangible assets, net | 2,465 | 3,391 |
Deferred compensation plan assets | 33,223 | 27,849 |
Other long-term assets | 28,225 | 23,356 |
Total assets | 5,089,969 | 4,863,872 |
Current liabilities: | ||
Accounts payable | 477,052 | 414,009 |
Accrued liabilities | 296,334 | 246,088 |
Deferred revenue | 274,383 | 237,535 |
Current operating lease liabilities | 253,415 | 239,629 |
Accrued income taxes | 42,529 | |
Total current liabilities | 1,343,713 | 1,137,261 |
Non-current operating lease liabilities | 1,643,386 | 1,698,718 |
Deferred income taxes | 65,359 | 89,367 |
Other long-term liabilities | 37,962 | 36,432 |
Total liabilities | 3,090,420 | 2,961,778 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, 400,000 shares authorized; 56,952 and 57,285 shares issued; 56,260 and 56,609 shares outstanding; at January 30, 2021 and February 1, 2020, respectively | 569 | 573 |
Treasury stock-common, at cost | (37,801) | (34,448) |
Additional paid-in capital | 847,303 | 807,492 |
Retained earnings | 1,189,422 | 1,128,477 |
Accumulated other comprehensive income | 56 | |
Total stockholders' equity | 1,999,549 | 1,902,094 |
Total liabilities and stockholders' equity | $ 5,089,969 | $ 4,863,872 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Consolidated Balance Sheets | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000 | 400,000 |
Common stock, shares issued | 56,952 | 57,285 |
Common stock, shares outstanding | 56,260 | 56,609 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Consolidated Statements of Operations | |||||||||||
Net sales | $ 2,198,701 | $ 1,552,033 | $ 1,228,009 | $ 1,173,210 | $ 2,305,918 | $ 1,682,514 | $ 1,666,607 | $ 1,743,029 | $ 6,151,953 | $ 7,398,068 | $ 6,716,615 |
Cost of sales | 1,427,673 | 1,006,514 | 899,002 | 869,605 | 1,499,033 | 1,059,081 | 1,060,708 | 1,098,182 | 4,202,794 | 4,717,004 | 4,307,304 |
Gross profit | 771,028 | 545,519 | 329,007 | 303,605 | 806,885 | 623,433 | 605,899 | 644,847 | 1,949,159 | 2,681,064 | 2,409,311 |
Selling, general and administrative expenses | 514,140 | 416,378 | 271,587 | 380,912 | 515,542 | 449,198 | 392,843 | 403,133 | 1,583,017 | 1,760,716 | 1,535,464 |
Impairment, restructuring and other costs | 30,398 | 23,624 | 40,758 | 19,542 | 114,322 | ||||||
Pre-opening expenses | 2,218 | 4,240 | 3,907 | 4,635 | 3,587 | 6,455 | 5,038 | 4,174 | 15,000 | 19,254 | 19,767 |
Operating income | 224,272 | 101,277 | 12,755 | (101,484) | 287,756 | 167,780 | 208,018 | 237,540 | 236,820 | 901,094 | 854,080 |
Interest expense (income), net | 463 | 1,383 | 2,617 | 1,272 | (439) | (900) | (1,671) | (2,046) | 5,735 | (5,056) | (5,061) |
Income before income taxes | 223,809 | 99,894 | 10,138 | (102,756) | 288,195 | 168,680 | 209,689 | 239,586 | 231,085 | 906,150 | 859,141 |
Income tax expense | 52,315 | 25,096 | 2,086 | (24,247) | 65,476 | 38,933 | 48,431 | 47,365 | 55,250 | 200,205 | 200,582 |
Net income | $ 171,494 | $ 74,798 | $ 8,052 | $ (78,509) | $ 222,719 | $ 129,747 | $ 161,258 | $ 192,221 | $ 175,835 | $ 705,945 | $ 658,559 |
Net income per common share: | |||||||||||
Basic | $ 3.04 | $ 1.33 | $ 0.14 | $ (1.39) | $ 3.91 | $ 2.25 | $ 2.77 | $ 3.28 | $ 3.12 | $ 12.21 | $ 11 |
Diluted | $ 3.03 | $ 1.32 | $ 0.14 | $ (1.39) | $ 3.89 | $ 2.25 | $ 2.76 | $ 3.26 | $ 3.11 | $ 12.15 | $ 10.94 |
Weighted average common shares outstanding: | |||||||||||
Basic | 56,351 | 57,840 | 59,864 | ||||||||
Diluted | 56,558 | 58,105 | 60,181 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 175,835 | $ 705,945 | $ 658,559 |
Other comprehensive income: | |||
Foreign currency translation adjustments | 56 | ||
Comprehensive income | $ 175,891 | $ 705,945 | $ 658,559 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Operating activities | |||
Net income | $ 175,835 | $ 705,945 | $ 658,559 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 297,772 | 295,599 | 279,472 |
Non-cash lease expense | 268,071 | 278,820 | |
Long-lived asset impairment charge | 72,533 | ||
Deferred income taxes | (24,008) | 5,503 | 34,080 |
Stock-based compensation expense | 27,583 | 25,045 | 26,636 |
Loss on disposal of property and equipment | 6,827 | 5,850 | 2,885 |
Change in operating assets and liabilities: | |||
Receivables | (53,772) | (20,637) | (36,387) |
Merchandise inventories | 125,486 | (79,372) | (122,019) |
Prepaid expenses and other current assets | (4,363) | 9,289 | (39,450) |
Income taxes | 58,916 | 610 | (29,609) |
Accounts payable | 62,324 | 9,993 | 78,256 |
Accrued liabilities | 58,599 | 28,183 | 29,265 |
Deferred revenue | 36,848 | 38,481 | 50,684 |
Operating lease liabilities | (297,513) | (256,910) | |
Deferred rent | 27,064 | ||
Other assets and liabilities | (783) | 54,894 | (3,309) |
Net cash provided by operating activities | 810,355 | 1,101,293 | 956,127 |
Investing activities | |||
Purchases of short-term investments | (110,000) | (386,193) | |
Proceeds from short-term investments | 110,000 | 506,193 | |
Capital expenditures | (151,866) | (298,534) | (319,400) |
Acquisitions, net of cash acquired | (1,220) | (13,606) | |
Purchases of equity investments | (5,665) | (62,946) | (2,101) |
Net cash used in investing activities | (48,751) | (471,480) | (215,107) |
Financing activities | |||
Proceeds from long-term debt | 800,000 | ||
Payments on long-term debt | (800,000) | ||
Repurchase of common shares | (114,895) | (680,979) | (616,194) |
Stock options exercised | 12,229 | 43,780 | 13,121 |
Purchase of treasury shares | (3,353) | (9,540) | (6,141) |
Debt issuance costs | (1,915) | ||
Net cash used in financing activities | (107,934) | (646,739) | (609,214) |
Effect of exchange rate changes on cash and cash equivalents | 56 | ||
Net increase (decrease) in cash and cash equivalents | 653,726 | (16,926) | 131,806 |
Cash and cash equivalents at beginning of year | 392,325 | 409,251 | 277,445 |
Cash and cash equivalents at end of year | 1,046,051 | 392,325 | 409,251 |
Supplemental information | |||
Cash paid for interest | 6,987 | ||
Income taxes paid, net of refunds | 19,454 | 133,861 | 195,869 |
Non-cash capital expenditures | $ 20,487 | $ 26,901 | $ 28,746 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Treasury - Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total |
Balance at Feb. 03, 2018 | $ 614 | $ (18,767) | $ 698,917 | $ 1,093,453 | $ 1,774,217 | |
Balance (in shares) at Feb. 03, 2018 | 61,441 | (619) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 658,559 | 658,559 | ||||
Stock-based compensation | 26,636 | 26,636 | ||||
Adoption of accounting standards | ASU 2014-09, Revenue from Contracts with Customers (Topic 606) | (29,980) | (29,980) | ||||
Stock options exercised and other awards | $ 3 | 13,118 | 13,121 | |||
Stock options exercised and other awards (in shares) | 255 | |||||
Purchase of treasury shares | $ (6,141) | (6,141) | ||||
Purchase of treasury shares (in shares) | (29) | |||||
Repurchase of common shares | $ (25) | (616,169) | (616,194) | |||
Repurchase of common shares (in shares) | (2,464) | |||||
Balance at Feb. 02, 2019 | $ 592 | $ (24,908) | 738,671 | 1,105,863 | 1,820,218 | |
Balance (in shares) at Feb. 02, 2019 | 59,232 | (648) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 705,945 | 705,945 | ||||
Stock-based compensation | 25,045 | 25,045 | ||||
Adoption of accounting standards | ASU 2016-02, Leases (Topic 842) | (2,375) | (2,375) | ||||
Stock options exercised and other awards | $ 4 | 43,776 | 43,780 | |||
Stock options exercised and other awards (in shares) | 374 | |||||
Purchase of treasury shares | $ (9,540) | (9,540) | ||||
Purchase of treasury shares (in shares) | (28) | |||||
Repurchase of common shares | $ (23) | (680,956) | (680,979) | |||
Repurchase of common shares (in shares) | (2,321) | |||||
Balance at Feb. 01, 2020 | $ 573 | $ (34,448) | 807,492 | 1,128,477 | $ 1,902,094 | |
Balance (in shares) at Feb. 01, 2020 | 57,285 | (676) | 56,609 | |||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 175,835 | $ 175,835 | ||||
Stock-based compensation | 27,583 | 27,583 | ||||
Foreign currency translation adjustments | $ 56 | 56 | ||||
Stock options exercised and other awards | $ 1 | 12,228 | 12,229 | |||
Stock options exercised and other awards (in shares) | 142 | |||||
Purchase of treasury shares | $ (3,353) | (3,353) | ||||
Purchase of treasury shares (in shares) | (16) | |||||
Repurchase of common shares | $ (5) | (114,890) | (114,895) | |||
Repurchase of common shares (in shares) | (475) | |||||
Balance at Jan. 30, 2021 | $ 569 | $ (37,801) | $ 847,303 | $ 1,189,422 | $ 56 | $ 1,999,549 |
Balance (in shares) at Jan. 30, 2021 | 56,952 | (692) | 56,260 |
Business and basis of presentat
Business and basis of presentation | 12 Months Ended |
Jan. 30, 2021 | |
Business and basis of presentation | |
Business and basis of presentation | 1. Business and basis of presentation On January 29, 2017, Ulta Salon, Cosmetics & Fragrance, Inc. implemented a holding company reorganization. Pursuant to the reorganization, Ulta Beauty, Inc., which was incorporated as a Delaware corporation in December 2016, became the successor to Ulta Salon, Cosmetics & Fragrance, Inc., the former publicly-traded company and now a wholly owned subsidiary of Ulta Beauty, Inc. As used in these notes and throughout this Annual Report on Form 10-K, all references to “we,” “us,” “our,” “Ulta Beauty,” or the “Company” refer to Ulta Beauty, Inc. and its consolidated subsidiaries. The Company was originally founded in 1990 The Company has one reportable segment, which includes retail stores, salon services, and e-commerce. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Jan. 30, 2021 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Fiscal year The Company’s fiscal year is the 52 or 53 weeks ending on the Saturday closest to January 31. The Company’s fiscal years ended January 30, 2021 (fiscal 2020), February 1, 2020 (fiscal 2019), and February 2, 2019 (fiscal 2018) were 52-week years. Consolidation The Company’s consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts, transactions, and unrealized profit were eliminated in consolidation. 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 operating lease assets, loyalty program and income taxes to be the most significant accounting policies that involve management estimates and judgments. The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact the Company’s results of operations. While the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated, the Company has made accounting estimates based on the facts and circumstances available as of the reporting date. Actual amounts could differ from these estimates, and such differences could be material. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Cash and cash equivalents Cash and cash equivalents include cash on hand and highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents also include amounts due from third-party financial institutions for credit card and debit card transactions. These receivables typically settle in five days or less with little or no default risk. January 30, February 1, (In thousands) 2021 2020 Cash $ 887,299 $ 212,876 Short-term investments 99,986 110,000 Receivables from third-party financial institutions for credit card and debit card transactions 58,766 69,449 Cash and cash equivalents $ 1,046,051 $ 392,325 Short-term investments The balance sheet classification of investments is determined at the time of purchase and evaluated at each balance sheet date. Money market funds, certificates of deposit, and time deposits with maturities of greater than three months but no more than twelve months are carried at cost, which approximates fair value and are recorded in the consolidated balance sheets in short-term investments (see Note 16, “Investments”). Receivables Receivables consist principally of amounts due from vendors and amounts related to the employee retention credit (see Note 3, “Impact of the COVID-19 pandemic”). The Company does not require collateral on its receivables and does not accrue interest. Credit risk with respect to receivables is limited due to the diversity of vendors comprising the Company’s vendor base. The Company performs ongoing credit evaluations of its vendors and evaluates the collectability of its receivables based on the length of time the receivable is past due and historical experience. The receivable for vendor allowances was $90,271 and $113,048 as of January 30, 2021 and February 1, 2020, respectively. The allowance for doubtful receivables was $768 and $1,363 as of January 30, 2021 and February 1, 2020, respectively. The receivable for the employee retention credit was $52,405 as of January 30, 2021. There was no receivable for the employee retention credit as of February 1, 2020. Merchandise inventories Merchandise inventories are stated at the lower of cost or net realizable value. Cost is determined using the moving average cost method and includes costs incurred to purchase and distribute goods. Inventory cost also includes vendor allowances related to co-op advertising, markdowns, and volume discounts. The Company maintains an inventory reserve for lower of cost or net realizable value and shrink. The inventory reserve was $52,860 and $46,941 as of January 30, 2021 and February 1, 2020, respectively. Fair value of financial instruments The carrying value of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable approximates their estimated fair values due to the short maturities of these instruments. There was no outstanding debt as of January 30, 2021 and February 1, 2020. Property and equipment Property and equipment is stated at cost, net of accumulated depreciation, and depreciated using the straight-line method over the shorter of the assets’ estimated useful lives or lease term. Leasehold improvements purchased after the beginning of the initial lease term are amortized over the shorter of the assets’ useful lives or a term that includes the original lease term, plus any renewals that are reasonably certain at the date the leasehold improvements are acquired. Repair and maintenance costs are expensed as incurred. Equipment and fixtures 1 to 10 years Electronic equipment and software 3 to 5 years Costs incurred to obtain or develop internal use software are capitalized. These costs are amortized on a straight-line basis over the estimated useful life of the software. Impairment of long-lived tangible and right-of-use assets The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets. The asset group identified is at the store level and includes both property and equipment and operating lease assets. Significant estimates are used in determining future cash flows of each store over its remaining lease term including our expectations of future projected cash flows including revenues and operating expenses. An impairment loss is recorded if the carrying amount of the long-lived asset exceeds its fair value. The Company evaluates long-lived tangible and right-of-use assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The Company performs an undiscounted cash flow analysis over the asset group. Asset groups are written down only to the extent that their carrying value exceeds their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. Management’s forecast of future cash flows is based on the income approach. The fair value of individual operating lease assets is determined under the market approach using estimated market rent assessments based on broker quotes. The determination of fair value under the income approach requires assumptions including forecasts of future cash flows (such as revenue growth rates and operating expenses) and selection of a market-based discount rate. Estimates of market rent are based on non-binding broker quotes. As these inputs are unobservable they are classified as Level 3 inputs under the fair value hierarchy (see Note 15, “Fair value measurements”). If actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to additional impairment losses in a future period (see Note 6, “Impairment, restructuring and other costs”). Goodwill Goodwill represents the excess of cost over the fair value of net assets acquired. The Company reviews the recoverability of goodwill annually during the fourth quarter or more frequently if an event occurs or circumstances change that would indicate that impairment may exist (see Note 8, “Goodwill”). Other intangible assets Other definite-lived intangible assets are amortized over their useful lives. The Company reviews the recoverability of intangible assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable (see Note 9, “Other intangible assets”). Leases The Company adopted ASU 2016-02, Leases (Topic 842) on February 3, 2019 using the modified retrospective approach. Results and disclosure requirements for reporting periods beginning February 3, 2019 and later are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported under Topic 840. The Company determines whether an arrangement is or contains a lease at contract inception. The lease classification evaluation begins at the lease commencement date. The lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. Total rent payable is recorded during the lease term, including rent escalations in which the amount of future rent is fixed on the straight-line basis over the term of the lease (including the rent holiday period beginning upon control of the premises and any fixed payments stated in the lease). For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a right-of-use asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. Tenant incentives are amortized through the right-of-use asset as reduction of rent expense over the lease term. The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset. Certain leases contain provisions that require variable payments based upon sales volume or payment of common area maintenance costs, real estate taxes, and insurance related to leases . This results in some variability in lease expense as a percentage of revenues over the term of the lease in stores where variable lease costs are paid. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term. The Company subleases certain real estate to third parties for stores with excess square footage space. The Company does not separate lease and non-lease components (e.g., common area maintenance). As the interest rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate corresponding with the lease term. As there are no outstanding borrowings under the Company’s credit facility, this rate is estimated based on prevailing market conditions, comparable company and credit analysis, and judgment. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract (see Note 10, “Leases”). Loyalty program The Company maintains a loyalty program, Ultamate Rewards, which allows members to earn points based on purchases of merchandise or services. Points earned are valid for at least one year. The loyalty program represents a material right to the customer and points may be redeemed on future products and services. Revenue from the loyalty program is recognized when the members redeem points or points expire. The Company defers revenue related to points earned that have not yet been redeemed. The amount of deferred revenue includes estimates for the standalone selling price of points earned by members and the percentage of points expected to be redeemed. The expected redemption percentage is based on historical redemption patterns and considers current information or trends. When a guest redeems points or the points expire, the Company recognizes revenue in net sales on the consolidated statements of operations. Credit cards The Company has agreements (the Agreements) with third parties to provide guests with private label credit cards and/or co-branded credit cards (collectively, the Credit Cards). The private label credit card can be used at any store location and online, and the co-branded credit card can be used anywhere the co-branded card is accepted. A third-party financing company is the sole owner of the accounts and underwrites the credit issued under the Credit Card programs. The Company’s performance obligation is to maintain the Ultamate Rewards loyalty program as only guests enrolled in the loyalty program can apply for the Credit Cards. Loyalty members earn points through purchases at Ulta Beauty and anywhere the co-branded credit card is accepted. The third parties reimburse the Company for certain credit card program costs such as advertising and loyalty points, which help promote the credit card program. The Company recognizes revenue when collectability is reasonably assured, under the assumption the amounts are not constrained and it is probable that a significant revenue reversal will not occur in future periods, which is generally the time at which the actual usage of the Credit Cards or specified transaction occurs. The Company accounts for the amounts associated with the Agreements as a single contract with the sole commercial objective to maintain the Credit Card programs. As a result, all amounts associated with the Agreements are recognized within net sales on the consolidated statements of operations. Gift card program The Company records a contract liability for gift card sales which will be redeemed in the future within deferred revenue on the consolidated balance sheets and recognized in net sales when the gift card is redeemed for product or services. Gift cards do not expire and do not include service fees that decrease guest balances. The Company has maintained historical data related to gift card transactions sold and redeemed over a significant time frame. Gift card breakage (amounts not expected to be redeemed) is recognized to the extent there is no requirement for remitting balances to governmental agencies under unclaimed property laws. Estimated gift card breakage revenue is recognized over time in proportion to actual gift card redemptions. Gift card breakage revenue was $11,717, $12,448, and $12,446 in fiscal 2020, 2019, and 2018, respectively. Revenue recognition Revenue is recognized when control of the promised goods or services is transferred to the guest, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a guest; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, a performance obligation is satisfied. Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue. Revenue from merchandise sales at retail stores is recognized at the point of sale, net of estimated returns. Revenue from e-commerce merchandise sales is recognized upon shipment to the guest or guest pickup of the merchandise based on meeting the transfer of control criteria, net of estimated returns. Salon services revenue is recognized at the time the service is provided to the guest. Shipping and handling are treated as costs to fulfill the contract and not a separate performance obligation. Accordingly, the Company recognizes revenue for its single performance obligation related to e-commerce sales at the time control of the merchandise passes to the customer, which is at the time of shipment or guest pickup. The Company provides refunds for merchandise returns within 60 days from the original purchase date; however, due to store closures during the first half of fiscal 2020, we extended our return policy to 180 days through November 16, 2020. State sales taxes are presented on a net basis as the Company considers itself a pass-through conduit for collecting and remitting state sales tax. Company coupons and other incentives are recorded as a reduction of net sales. Vendor allowances The Company receives allowances from vendors in the normal course of business including advertising and markdown allowances, purchase volume discounts and rebates, reimbursement for defective merchandise, and certain selling and display expenses. Substantially all vendor allowances are recorded as a reduction of the vendor’s product cost and are recognized in cost of sales as the product is sold. Advertising Advertising costs consist principally of print, digital and social media, and television and radio advertising. Costs related to advertising are expensed in the period the related promotional event occurs. Prepaid advertising costs included in prepaid expenses and other current assets on the consolidated balance sheets were $7,112 and $9,605 as of January 30, 2021 and February 1, 2020, respectively. Advertising expense, exclusive of incentives from vendors and start-up advertising expense, is presented in the following table: Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Advertising expense $ 281,573 $ 317,865 $ 294,489 Advertising expense as a percentage of net sales 4.6% 4.3% 4.4% Pre-opening expenses Non-capital expenditures incurred prior to the grand opening of a new, remodeled, or relocated store are expensed as incurred. Cost of sales Cost of sales includes the cost of merchandise sold, including substantially all vendor allowances, which are treated as a reduction of merchandise costs; distribution costs including labor and related benefits, freight, rent, depreciation and amortization, real estate taxes, utilities, and insurance; shipping and handling costs; retail stores 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. Selling, general and administrative expenses Selling, general and administrative (SG&A) expenses includes payroll, bonus, and benefit costs for retail and corporate employees; advertising and marketing 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 store and distribution operations, which are included in cost of sales; and legal, finance, information systems, and other corporate overhead costs. Income taxes Deferred income taxes reflect the net tax effect of temporary differences between the financial statement carrying amounts of assets and liabilities and their tax bases. The amounts reported were derived using the enacted tax rates in effect for the year the differences are expected to reverse. Income tax benefits related to uncertain tax positions are recognized only when it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. Penalties and interest related to unrecognized tax positions are recorded in income tax expense in the consolidated statements of operations (see Note 13, “Income taxes”). Stock-based compensation Stock-based compensation expense is measured at grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period for awards expected to vest. Stock-based compensation expense was $27,583, $25,642, and $27,489 in fiscal 2020, 2019 and 2018, respectively (see Note 17, “Stock-based compensation”). Insurance expense The Company has insurance programs with third party insurers for employee health, workers compensation, and general liability, among others, to limit the Company’s liability exposure. The insurance programs are premium based and include retentions, deductibles, and stop loss coverage. Current stop loss coverage per claim is $350 for employee health claims, $100 for general liability claims, and $250 for workers compensation claims. The Company makes collateral and premium payments during the plan year and accrues expenses in the event additional premium is due from the Company based on actual claim results. In fiscal 2018, the Company created UB Insurance, Inc., an Arizona-based wholly owned captive insurance subsidiary of the Company, which charges the operating subsidiaries of the Company premiums to insure certain liability exposures. Pursuant to Arizona insurance regulations, UB Insurance, Inc. maintains certain levels of cash and cash equivalents related to its liability exposures. Net income per common share Basic net income per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per common share includes dilutive common stock equivalents, using the treasury stock method (see Note 18, “Net income per common share”). Recent accounting pronouncements not yet adopted Taxes – Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In December 2019, the Financial Accounting Standards Board (FASB) issued (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intraperiod allocation, and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group, among others. This guidance is effective after December 15, 2020. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The adoption of ASU 2019-12 is not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows. Recently adopted accounting pronouncements Intangibles – Goodwill and Other-Internal-Use Software. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which clarifies and aligns the accounting for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019 and should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. The Company adopted the new guidance prospectively as of February 2, 2020, and its adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows. |
Impact of the COVID-19 pandemic
Impact of the COVID-19 pandemic | 12 Months Ended |
Jan. 30, 2021 | |
Impact of the COVID-19 pandemic | |
Impact of the COVID-19 pandemic | 3. Impact of the COVID-19 pandemic In March 2020, the World Health Organization declared COVID-19 a global pandemic. In response to federal, state, and local government restrictions and recommendations and for the health and safety of our associates and guests, the Company temporarily closed all stores effective March 19, 2020. Effective April 19, 2020, the Company temporarily furloughed many store and salon associates and introduced curbside pickup, and on May 11, 2020, the Company started a phased store reopening process. By July 20, 2020, the full fleet of Ulta Beauty stores was operational, and by January 30, 2021, salon and brow services had resumed in almost all stores. Results of operations for the fiscal year ended January 30, 2021 were significantly impacted by the effects of the COVID-19 pandemic, and the pandemic is expected to continue to have a negative impact on the Company’s business, financial condition, profitability, cash flows, and supply chain, although the full extent is uncertain. As the COVID-19 pandemic continues to evolve and resurgences occur, the extent of the impact on the Company’s business, financial condition, profitability, cash flows, and supply chain will depend on future developments, including, but not limited to, the potential temporary reclosing of certain stores, the potential temporary restrictions on certain store operating hours and/or in-store capacity, the duration of potential future quarantines, shelter-in-place and other travel restrictions within the U.S. and other affected countries, the duration of the pandemic and any more dangerous variants of the virus, the duration, timing and severity of the impact on consumer spending, the timing and effectiveness of vaccine distribution, and how quickly and to what extent normal economic and operating conditions can resume, all of which are highly uncertain and cannot be predicted. The multi-year, strategic investments the Company made to enhance omnichannel and supply chain capabilities, combined with the ongoing commitment of the Company’s distribution associates, enabled the Company to support increased e-commerce demand and guest engagement. The Company took the following actions during fiscal 2020 to preserve financial liquidity through these unprecedented circumstances: ● the drawdown of $800,000 on March 18, 2020 under the Company’s revolving credit facility, which was repaid in full on September 2, 2020; ● limited new hires and delayed merit increases for all corporate, store, and salon associates; ● reduced marketing, travel and controllable expenses; ● aligned inventory receipts with current sales trends; ● prioritized payment obligations; ● reduced new store openings, relocations and remodel projects; and ● suspended the stock repurchase program, which resumed in the fourth quarter of fiscal 2020. The Company evaluates long-lived tangible and right-of-use assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. As a result of the COVID-19 pandemic, the Company experienced lower than projected revenues and identified indicators of impairment for certain stores, which resulted in the recording of certain long-lived asset impairment and restructuring charges. See Note 6, “Impairment, restructuring and other costs,” for additional details. CARES Act On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted. The CARES Act, among other things, includes provisions relating to refundable payroll taxes, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The most significant relief measures which the Company qualifies for are the employee retention credit, payroll tax deferral, and technical corrections to tax depreciation. The Company recognizes government grants for which there is a reasonable assurance of compliance with grant conditions and receipt of credits. The Company believes there is a reasonable assurance that it will comply with the relevant conditions of the employee retention credit provision of the CARES Act and that it will receive the credit. The Company will continue to assess the treatment of the CARES Act to the extent additional guidance and regulations are issued, the further applicability of the CARES Act to the Company, and the potential impacts on the business. Employee retention credit (ERC) and payroll tax deferral. Additionally, the CARES Act contains provisions for the deferral of the employer portion of social security taxes incurred through the end of calendar 2020. As of January 30, 2021, the Company had deferred $43,845 in social security tax payments, of which 50% are required to be remitted by December 2021 and the remaining 50% by December 2022. The deferred amounts are recorded within accrued liabilities on the Company’s consolidated balance sheets. Technical corrections to tax depreciation. |
Acquisitions
Acquisitions | 12 Months Ended |
Jan. 30, 2021 | |
Acquisitions | |
Acquisitions | 4. Acquisitions The Company has made investments to evolve the customer experience, with a strong emphasis on integrating technology across the business. To support these efforts, the Company paid $13,606 to acquire two technology companies in fiscal 2018. On September 10, 2018, the Company acquired QM Scientific, an artificial intelligence technology company. The acquisition is not material to the Company’s consolidated financial statements. On October 29, 2018, the Company acquired GlamST, an augmented reality technology company. The acquisition is not material to the Company’s consolidated financial statements. |
Revenue
Revenue | 12 Months Ended |
Jan. 30, 2021 | |
Revenue | |
Revenue | 5. Revenue Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue. Other revenue sources include the private label and co-branded credit card programs, as well as 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: Fiscal year ended January 30, February 1, February 2, 2021 2020 2019 Cosmetics 44% 50% 51% Skincare, bath, and fragrance 28% 22% 21% Haircare products and styling tools 20% 19% 19% Services 3% 5% 5% Other (nail products, accessories, and other) 5% 4% 4% 100% 100% 100% Deferred revenue Deferred revenue primarily represents contract liabilities for the Company’s obligation to transfer additional goods or services to a guest for which the Company has received consideration, such as unredeemed Ultamate Rewards loyalty points and unredeemed Ulta Beauty gift cards. In addition, breakage on gift cards is recognized proportionately as redemption occurs. The following table provides a summary of the changes included in deferred revenue during fiscal years 2020 and 2019: January 30, February 1, (In thousands) 2021 2020 Beginning balance $ 230,011 $ 193,585 Additions to contract liabilities (1) 200,267 206,701 Deductions to contract liabilities (2) (161,246) (170,275) Ending balance $ 269,032 $ 230,011 (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 $5,351 and $7,524 at January 30, 2021 and February 1, 2020, respectively. |
Impairment, restructuring and o
Impairment, restructuring and other costs | 12 Months Ended |
Jan. 30, 2021 | |
Impairment, restructuring and other costs | |
Impairment, restructuring and other costs | 6. Impairment, restructuring and other costs The following table provides a summary of the impairment, restructuring and other costs included in the consolidated statements of operations: Fiscal year ended January 30, (In thousands) 2021 Impairment of long-lived tangible and right-of-use assets $ 41,948 Store closures Impairment of long-lived tangible and right-of-use assets (1) 19,569 Lease termination costs 7,443 Severance (2) 489 Total store closures 27,501 Suspension of Canadian expansion Impairment of long-lived tangible and right-of-use assets (1) 11,016 Lease termination costs 17,388 Severance (2) 717 Total suspension of Canadian expansion 29,121 Other severance (2) 15,752 Total (3) $ 114,322 (1) Amount included in the non-cash $72,533 long-lived asset impairment charge on the consolidated statements of cash flows for the fiscal year ended January 30, 2021. (2) As of January 30, 2021, there was $9,476 in accrued liabilities on the consolidated balance sheets primarily for severance. (3) There were no impairment, restructuring and other costs recognized during the fiscal years ended February 1, 2020 and February 2, 2019. Impairment of long-lived tangible and right-of-use assets. Store closures. Suspension of Canadian expansion. stores. The Company recognized impairment, restructuring and other costs related to suspension of the Canada expansion during the fiscal year ended January 30, 2021. Other severance. |
Property and equipment
Property and equipment | 12 Months Ended |
Jan. 30, 2021 | |
Property and equipment | |
Property and equipment | 7. Property and equipment Property and equipment consists of the following: January 30, February 1, (In thousands) 2021 2020 Equipment and fixtures $ 1,083,509 $ 1,073,764 Leasehold improvements 782,036 803,398 Electronic equipment and software 649,603 596,323 Construction-in-progress 52,668 92,355 2,567,816 2,565,840 Less: accumulated depreciation and amortization (1,572,021) (1,360,316) Property and equipment, net $ 995,795 $ 1,205,524 |
Goodwill
Goodwill | 12 Months Ended |
Jan. 30, 2021 | |
Goodwill | |
Goodwill | 8. Goodwill The changes in the carrying amounts of goodwill during the fiscal years 2020 and 2019 are as follows: January 30, February 1, (In thousands) 2021 2020 Balance at beginning of the period $ 10,870 $ 10,870 Acquisitions — — Balance at the end of the period $ 10,870 $ 10,870 |
Other intangible assets
Other intangible assets | 12 Months Ended |
Jan. 30, 2021 | |
Other intangible assets | |
Other intangible assets | 9. Other intangible assets Other intangible assets subject to amortization consists of the following: January 30, 2021 February 1, 2020 Weighted-average Gross Gross remaining useful carrying Accumulated carrying Accumulated (In thousands) life in years value amortization Net value amortization Net Developed technology 2.7 $ 4,631 $ (2,166) $ 2,465 $ 4,631 $ (1,240) $ 3,391 Amortization expense related to intangible assets was $926, $926, and $314 in fiscal 2020, fiscal 2019, and fiscal 2018, respectively. Estimated amortization expense related to intangible assets at January 30, 2021, for the next five years and thereafter is as follows: Estimated amortization expense Fiscal year (In thousands) 2021 $ 926 2022 926 2023 613 2024 — 2025 — 2026 and thereafter — $ 2,465 |
Leases
Leases | 12 Months Ended |
Jan. 30, 2021 | |
Leases | |
Leases | 10. Leases The Company leases retail stores, distribution centers, fast fulfillment centers, corporate offices, and certain equipment under non-cancelable operating leases with various expiration dates through 2033. Leases 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. All retail store, distribution center, fast fulfillment center, and corporate office leases are classified as operating leases. The Company does not have any finance leases. The following table presents supplemental balance sheet information, the weighted-average remaining lease term, and discount rate for operating leases: January 30, February 1, (In thousands) Classification on the Balance Sheet 2021 2020 Right-of-use assets Operating lease assets $ 1,504,614 $ 1,537,565 Current lease liabilities Current operating lease liabilities $ 253,415 $ 239,629 Non-current lease liabilities Non-current operating lease liabilities 1,643,386 1,698,718 Total lease liabilities $ 1,896,801 $ 1,938,347 Weighted-average remaining lease term 6.9 7.3 Weighted-average discount rate 3.6% 4.1% Lease cost The following table presents the components of lease cost for operating leases: Fiscal Year Ended January 30, February 1, (In thousands) Classification on the Statement of Operations 2021 2020 Operating lease cost Cost of sales (1) $ 304,743 $ 289,007 Variable lease cost Cost of sales 80,557 77,142 Short-term lease cost Selling, general and administrative expenses 567 352 Sublease income Net sales (827) (691) Total lease cost $ 385,040 $ 365,810 (1) The majority of operating lease cost relates to retail stores, distribution centers, and fast fulfillment centers and is classified within cost of sales. Operating lease cost for corporate offices is classified within the selling, general and administrative expenses. Operating lease cost from the control date through store opening date is classified within pre-opening expenses. Other information The following table presents supplemental disclosures of cash flow information related to operating leases: Fiscal Year Ended January 30, February 1, (In thousands) 2021 2020 Cash paid for operating lease liabilities (1) $ 354,133 $ 338,942 Operating lease assets obtained in exchange for operating lease liabilities (non-cash) 255,966 355,286 (1) Excludes $33,092 and $71,294 related to cash received for tenant incentives as of January 30, 2021 and February 1, 2020, respectively. Maturity of lease liabilities The following table presents maturities of operating lease liabilities as of January 30, 2021: Fiscal year (In thousands) 2021 $ 319,430 2022 353,137 2023 316,199 2024 283,813 2025 254,364 2026 and thereafter 624,925 Total lease payments $ 2,151,868 Less: imputed interest (255,067) Present value of operating lease liabilities $ 1,896,801 Operating lease payments exclude $75,782 of legally binding minimum lease payments for leases signed but not yet commenced. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Jan. 30, 2021 | |
Commitments and contingencies | |
Commitments and contingencies | 11. Commitments and contingencies Contractual obligations General litigation – |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Jan. 30, 2021 | |
Accrued liabilities | |
Accrued liabilities | 12 . Accrued liabilities Accrued liabilities consist of the following: January 30, February 1, (In thousands) 2021 2020 Accrued payroll, bonus, and employee benefits $ 143,992 $ 77,435 Accrued taxes 36,787 39,051 Other accrued liabilities 115,555 129,602 Accrued liabilities $ 296,334 $ 246,088 |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 30, 2021 | |
Income Taxes | |
Income Taxes | 13. Income taxes The provision for income taxes consists of the following: Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Current: Federal $ 67,724 $ 163,596 $ 137,255 State 11,534 31,106 29,247 Total current 79,258 194,702 166,502 Deferred: Federal (19,631) 1,182 29,374 State (4,377) 4,321 4,706 Total deferred (24,008) 5,503 34,080 Provision for income taxes $ 55,250 $ 200,205 $ 200,582 A reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows: Fiscal year ended January 30, February 1, February 2, 2021 2020 2019 Federal statutory rate 21.0 % 21.0 % 21.0 % State effective rate, net of federal tax benefit 2.9 % 3.1 % 3.1 % Executive compensation limitation 1.2 % 0.2 % 0.2 % Excess deduction of stock compensation (0.3) % (1.1) % (0.6) % Other (0.9) % (1.1) % (0.4) % Effective tax rate 23.9 % 22.1 % 23.3 % Significant components of deferred tax assets and liabilities are as follows: January 30, February 1, (In thousands) 2021 2020 Deferred tax assets: Operating lease liability $ 484,780 $ 496,977 Reserves not currently deductible 32,590 35,626 Accrued liabilities 31,056 27,363 Employee benefits 23,687 22,907 Inventory valuation 8,386 4,021 NOL carryforwards 255 288 Credit carryforwards 291 224 Other — 1,019 Total deferred tax assets 581,045 588,425 Deferred tax liabilities: Operating lease asset 561,605 567,198 Property and equipment 32,812 61,570 Prepaid expenses 46,013 45,354 Receivables not currently includable 3,720 2,863 Intangibles 585 807 Other 1,669 — Total deferred tax liabilities 646,404 677,792 Net deferred tax liability $ (65,359) $ (89,367) At January 30, 2021, the Company had $291 of credit carryforwards for state income tax purposes that expire between 2022 and 2024. The Company also had $533 of state net operating loss (NOL) carryforwards that expire by 2039 and $985 of federal and $36 of state NOL carryforwards that do not expire. The Company accounts for uncertainty in income taxes in accordance with the ASC 740-10 rules for income taxes. The reserve for uncertain tax positions was $2,783 and $3,536 at January 30, 2021 and February 1, 2020, respectively. The balance is the Company’s best estimate of the potential liability for uncertain tax positions. A reconciliation of unrecognized tax benefits, excluding interest and penalties, is as follows: January 30, February 1, (In thousands) 2021 2020 Balance at beginning of the year $ 3,536 $ 3,844 Increase due to a prior year tax position 224 602 Decrease due to a prior year tax position (977) (910) Balance at end of the year $ 2,783 $ 3,536 The Company acknowledges that the amount of unrecognized tax benefits may change in the next twelve months. However, it does not expect the change to have a significant impact on its consolidated financial statements. Income tax-related interest and penalties were insignificant for fiscal 2020 and 2019. The Company files tax returns in the U.S. federal and state jurisdictions. The Company is no longer subject to U.S. federal examinations by the Internal Revenue Service for years before 2018 and is no longer subject to examinations by state authorities before 2016. |
Debt
Debt | 12 Months Ended |
Jan. 30, 2021 | |
Debt | |
Debt | 14 . Debt On March 11, 2020, the Company entered into Amendment No. 1 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 11, 2025, provides maximum revolving loans equal to the lesser of $1,000,000 or a percentage of eligible owned inventory and eligible owned receivables (which borrowing base may, at the election of the Company and satisfaction of certain conditions, include a percentage of qualified cash), contains a $50,000 subfacility for letters of credit and allows the Company to increase the revolving facility by an additional $100,000, 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% to 0.125% or the London Interbank Offered Rate plus a margin of 1.125% to 1.250%, with such margins based on the Company’s borrowing availability, and the unused line fee is 0.20% per annum. As of January 30, 2021 and February 1, 2020, the Company had no borrowings outstanding under the credit facility and the weighted average interest rate was 1.56 % for fiscal year 2020. As of January 30, 2021, the Company was in compliance with all terms and covenants of the Loan Agreement. |
Fair value measurements
Fair value measurements | 12 Months Ended |
Jan. 30, 2021 | |
Fair value measurements | |
Fair value measurements | 15. Fair value measurements The carrying value of cash and cash equivalents, short-term investments, 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. As of January 30, 2021 and February 1, 2020, the Company held financial liabilities included in other long-term liabilities on the consolidated balance sheets of $32,909 and $29,442, respectively, related to its non-qualified deferred compensation plan. The liabilities have been 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. Some assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets and goodwill that are reduced to fair value when impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. |
Investments
Investments | 12 Months Ended |
Jan. 30, 2021 | |
Investments | |
Investments | 16 . Investments Short-term investments typically consist of certificates of deposit and are carried at cost, which approximates fair value and are recorded in the consolidated balance sheets in short-term investments. There were no short-term investments as of January 30, 2021. Short-term investments were $110,000 as of February 1, 2020. Investments in renewable energy projects are accounted for under the equity method of accounting. The balance of these investments was $3,174 and $3,936 as of January 30, 2021 and February 1, 2020, respectively, and is included in other long-term assets on the consolidated balance sheets. The Company contributed capital of $5,665 and received distributions including $1,689 of investment tax credits during fiscal year 2020. The Company contributed capital of $62,946 and received distributions including $60,208 of investment tax credits during fiscal year 2019. |
Stock-based awards
Stock-based awards | 12 Months Ended |
Jan. 30, 2021 | |
Stock-based compensation | |
Share-based awards | 17 . Stock-based compensation The Company’s equity incentive plan was adopted in order to attract and retain the best available personnel for positions of substantial authority and to provide additional incentive to employees and directors to promote the success of the business. In June 2016, the Company adopted the Amended and Restated 2011 Incentive Award Plan (the 2011 Plan). The 2011 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalent rights, stock payments, deferred stock, and cash-based awards to employees, consultants, and directors. Unless provided otherwise by the administrator of the plan, options vest over four years at the rate of 25% per year from the date of grant and must be exercised within ten years. Options are granted with the exercise price equal to the fair value of the underlying stock on the date of grant. As of January 30, 2021, the 2011 Plan reserves for the issuance upon grant or exercise of awards up to 2,791 shares of common stock. The following table presents information related to stock-based compensation: Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Stock options $ 10,757 $ 8,660 $ 8,590 Restricted stock units 16,608 12,762 12,077 Performance-based restricted stock units 218 4,220 6,822 Total stock-based compensation expense $ 27,583 $ 25,642 $ 27,489 Cash received from stock option exercises $ 12,229 $ 43,780 $ 13,121 Income tax benefit $ 750 $ 11,600 $ 6,135 Common stock options 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 with the following weighted-average assumptions: Fiscal year ended January 30, February 1, February 2, 2021 2020 2019 Volatility rate 43.0% 31.0% 29.0% Average risk-free interest rate 0.3% 2.3% 2.4% Average expected life (in years) 3.4 3.5 3.4 Dividend yield None None None 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 following table presents information related to common stock options: Fiscal year ended January 30, February 1, February 2, (In thousands, except weighted-average grant date fair value) 2021 2020 2019 Weighted-average grant date fair value $ 54.40 $ 89.91 $ 50.10 Fair value of options vested 9,741 9,143 10,042 Intrinsic value of options exercised 11,304 51,650 25,902 At January 30, 2021, there was approximately $16,810 of unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately two years . A summary of stock option activity is presented in the following table (shares in thousands): Fiscal 2020 Fiscal 2019 Fiscal 2018 Weighted- Weighted- Weighted- Number of average Number of average Number of average options exercise price options exercise price options exercise price Beginning of year 539 $ 212.58 755 $ 174.34 766 $ 147.76 Granted 248 174.45 97 348.73 163 204.27 Exercised (90) 135.70 (285) 153.64 (166) 78.81 Forfeited/Expired (26) 219.47 (28) 263.34 (8) 260.83 End of year 671 $ 208.47 539 $ 212.58 755 $ 174.34 Exercisable at end of year 236 $ 209.03 172 $ 159.39 296 $ 134.27 Vested and Expected to vest 639 $ 208.49 510 $ 211.14 718 $ 173.02 The following table presents information related to stock options outstanding and stock options exercisable at January 30, 2021 based on ranges of exercise prices (shares in thousands): Options outstanding Options exercisable Weighted- Weighted- average average remaining remaining contractual Weighted- contractual Weighted- Number of life average Number of life average Range of Exercise Prices options (years) exercise price options (years) exercise price $57.42 – $127.15 31 2 $ 83.88 31 2 $ 83.88 $127.16 – $164.06 104 5 163.63 54 5 163.23 $164.07 – $174.45 234 9 174.45 – – – $174.46 – $204.27 139 7 201.79 73 6 199.51 $204.28 – $281.53 78 6 279.03 56 6 278.91 $281.54 – $348.73 85 8 348.73 22 8 348.73 $57.42 – $348.73 671 7 $ 208.47 236 5 $ 209.03 The aggregate intrinsic value of outstanding and exercisable stock options as of January 30, 2021 was $53,868 and $18,332, respectively. The last reported sale price of the Company’s common stock on the NASDAQ Global Select Market on January 30, 2021 was $279.76 per share. Restricted stock units Restricted stock units are granted to certain employees and directors. Employee grants generally cliff vest after three years and director grants cliff vest within one year. The grant date fair value of restricted stock units is based on the closing market price of shares of the Company’s common stock on the date of grant. Restricted stock units are expensed on a straight-line basis over the requisite service period. Forfeitures of restricted stock units are estimated at the grant date based on historical rates of stock award activity and reduce the stock-based compensation expense recognized. At January 30, 2021, unrecognized stock-based compensation expense related to restricted stock units was $26,267. The unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately one and a half A summary of restricted stock units activity is presented in the following table (shares in thousands): Fiscal 2020 Fiscal 2019 Fiscal 2018 Weighted- Weighted- Weighted- Number of average grant Number of average grant Number of average grant units date fair value units date fair value units date fair value Beginning of year 159 $ 259.21 168 $ 220.68 134 $ 207.70 Granted 163 179.72 53 335.28 97 208.82 Vested (38) 276.51 (46) 207.77 (52) 164.35 Forfeited (31) 218.40 (16) 259.65 (11) 227.44 End of year 253 $ 210.46 159 $ 259.21 168 $ 220.68 Expected to vest 234 $ 210.46 147 $ 259.21 154 $ 220.68 Performance-based restricted stock units Performance-based restricted stock units are granted to certain employees. These awards cliff vest after three years based upon achievement of pre-established net sales and earnings before tax goals at the end of the second year of the term. The grant date fair value of performance-based restricted stock units is based on the closing market price of shares of the Company’s common stock on the date of grant. Performance-based restricted stock units are expensed on a straight-line basis over the requisite service period, based on the probability of achieving the performance goal, with changes in expectations recognized as an adjustment to earnings in the period of the change. If the performance goal is not met, no stock-based compensation expense is recognized and any previously recognized stock-based compensation expense is reversed. Forfeitures of performance-based restricted stock units are estimated at the grant date based on historical rates of stock award activity and reduce the stock-based compensation expense recognized. At January 30, 2021, unrecognized stock-based compensation expense related to performance-based restricted stock units was $183. The unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately one year. A summary of performance-based restricted stock unit activity is presented in the following table (shares in thousands): Fiscal 2020 Fiscal 2019 Fiscal 2018 Weighted- Weighted- Weighted- Number of average Number of average Number of average units grant date units grant date units grant date Beginning of year 62 $ 267.60 94 $ 214.64 78 $ 196.81 Granted – – 21 348.73 33 204.27 Change in performance award payout (5) 204.27 (3) 281.53 22 191.76 Vested (14) 281.53 (43) 191.76 (36) 151.20 Forfeited (6) 263.38 (7) 258.80 (3) 224.49 End of year 37 $ 271.88 62 $ 267.60 94 $ 214.64 Expected to vest 35 $ 271.88 57 $ 267.60 87 $ 214.64 The number of performance-based restricted stock units granted is based on achieving the targeted performance goals as defined in the performance-based restricted stock unit agreements. As of January 30, 2021, the maximum number of units that could vest under the provisions of the agreements was 55. |
Net income per common share
Net income per common share | 12 Months Ended |
Jan. 30, 2021 | |
Net income per common share | |
Net income per common share | 18 . 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: Fiscal year ended January 30, February 1, February 2, (In thousands, except per share data) 2021 2020 2019 Numerator: Net income $ 175,835 $ 705,945 $ 658,559 Denominator: Weighted-average common shares – Basic 56,351 57,840 59,864 Dilutive effect of stock options and non-vested stock 207 265 317 Weighted-average common shares – Diluted 56,558 58,105 60,181 Net income per common share: Basic $ 3.12 $ 12.21 $ 11.00 Diluted $ 3.11 $ 12.15 $ 10.94 The denominator for diluted net income per common share for fiscal years 2020, 2019, and 2018 excludes 211, 298, and 302 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. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Jan. 30, 2021 | |
Employee benefit plans | |
Employee benefit plans | 19 . Employee benefit plans The Company provides a 401(k) retirement plan covering all employees who qualify as to age and length of service. The plan is funded through employee contributions and a Company match. In fiscal 2018, the Company match was 100% of the first 3% of eligible compensation. Starting in January 2019, the Company added an additional 50% match for the next 2% of eligible compensation. Total expense recorded under this plan is included in SG&A expenses in the consolidated statements of operations as follows: Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 401(k) plan matching contribution expense $ 16,878 $ 16,556 $ 10,029 The Company also has a non-qualified deferred compensation plan for highly compensated employees whose contributions are limited under qualified defined contribution plans. The plan is funded through employee contributions and a Company match. In fiscal 2020, 2019 and 2018, the Company match was 100% of the first 3% of salary. Amounts contributed and deferred under the plan are credited or charged with the performance of investment options offered under the plan as elected by the participants. In the event of bankruptcy, the assets of this plan are available to satisfy the claims of general creditors. The Company manages the risk of changes in the fair value of the liability for deferred compensation by electing to match its liability under the plan with investment vehicles that offset a substantial portion of its exposure. Total expense recorded under this plan is included in SG&A expenses in the consolidated statements of operations and was insignificant during fiscal 2020, 2019, and 2018. Amounts included in the consolidated balance sheets related to the deferred compensation plan were as follows: January 30, February 1, (In thousands) 2021 2020 Deferred compensation plan liability $ 32,909 $ 29,442 Deferred compensation plan assets 33,223 27,849 |
Selected quarterly financial da
Selected quarterly financial data (unaudited) | 12 Months Ended |
Jan. 30, 2021 | |
Selected quarterly financial data (unaudited) | |
Selected quarterly financial data (unaudited) | 20 . Selected quarterly financial data (unaudited) The following tables set forth the unaudited quarterly results of operations for each of the quarters in fiscal 2020 and fiscal 2019. The quarterly periods are the 13 weeks ending on the Saturday closest to April 30, July 31, October 31, and January 31. Fiscal 2020 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 1,173,210 $ 1,228,009 $ 1,552,033 $ 2,198,701 Cost of sales 869,605 899,002 1,006,514 1,427,673 Gross profit 303,605 329,007 545,519 771,028 Selling, general and administrative expenses 380,912 271,587 416,378 514,140 Impairment, restructuring and other costs 19,542 40,758 23,624 30,398 Pre-opening expenses 4,635 3,907 4,240 2,218 Operating income (loss) (101,484) 12,755 101,277 224,272 Interest expense, net 1,272 2,617 1,383 463 Income (loss) before income taxes (102,756) 10,138 99,894 223,809 Income tax expense (benefit) (24,247) 2,086 25,096 52,315 Net income (loss) $ (78,509) $ 8,052 $ 74,798 $ 171,494 Net income (loss) per common share: Basic $ (1.39) $ 0.14 $ 1.33 $ 3.04 Diluted $ (1.39) $ 0.14 $ 1.32 $ 3.03 Fiscal 2019 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 1,743,029 $ 1,666,607 $ 1,682,514 $ 2,305,918 Cost of sales 1,098,182 1,060,708 1,059,081 1,499,033 Gross profit 644,847 605,899 623,433 806,885 Selling, general and administrative expenses 403,133 392,843 449,198 515,542 Pre-opening expenses 4,174 5,038 6,455 3,587 Operating income 237,540 208,018 167,780 287,756 Interest income, net (2,046) (1,671) (900) (439) Income before income taxes 239,586 209,689 168,680 288,195 Income tax expense 47,365 48,431 38,933 65,476 Net income $ 192,221 $ 161,258 $ 129,747 $ 222,719 Net income per common share: Basic $ 3.28 $ 2.77 $ 2.25 $ 3.91 Diluted $ 3.26 $ 2.76 $ 2.25 $ 3.89 The sum of the quarterly net income per common share may not equal the annual total due to quarterly changes in the weighted average shares and share equivalents outstanding. |
Share repurchased program
Share repurchased program | 12 Months Ended |
Jan. 30, 2021 | |
Share repurchase program | |
Share repurchased program | 21. Share repurchase program On March 15, 2018, the Company announced that the Board of Directors authorized a share repurchase program (the 2018 Share Repurchase Program) pursuant to which the Company could repurchase up to $625,000 of the Company’s common stock. The 2018 Share Repurchase Program authorization revoked the previously authorized but unused amount of $41,317 from the earlier share repurchase program. The 2018 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time. On March 14, 2019, the Company announced that the Board of Directors authorized a new share repurchase program (the 2019 Share Repurchase Program) pursuant to which the Company could repurchase up to $875,000 of the Company’s common stock. The 2019 Share Repurchase Program authorization revoked the previously authorized but unused amount of $25,435 from the 2018 Share Repurchase Program. The 2019 Share Repurchase Program did not have an expiration date but provided for suspension or discontinuation at any time. On March 12, 2020, the Company announced that the Board of Directors authorized a new share repurchase program (the 2020 Share Repurchase Program) pursuant to which the Company may repurchase up to $1,600,000 of the Company’s common stock. The 2020 Share Repurchase Program authorization revoked the previously authorized but unused amounts of $177,805 from the 2019 Share Repurchase Program. The 2020 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time. On April 2, 2020, the Company announced that the share repurchase program had been suspended in order to strengthen its liquidity and preserve cash while navigating the COVID-19 pandemic. The program resumed during the fourth quarter of fiscal 2020. A summary of common stock repurchase activity is presented in the following table: Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Shares repurchased 475 2,321 2,464 Total cost of shares repurchased $ 114,895 $ 680,979 $ 616,194 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Jan. 30, 2021 | |
Valuation and Qualifying Accounts | |
Schedule II - Valuation and Qualifying Accounts | Ulta Beauty, Inc. Schedule II – Valuation and Qualifying Accounts Balance at Charged to Balance at beginning costs and end Description of period expenses Deductions of period Fiscal 2020 Allowance for doubtful accounts $ 1,363 $ 22 $ (617) (a) $ 768 Inventory reserve 46,941 42,634 (36,715) 52,860 Fiscal 2019 Allowance for doubtful accounts $ 651 $ 1,094 $ (382) (a) $ 1,363 Inventory reserve 36,640 50,285 (39,984) 46,941 Fiscal 2018 Allowance for doubtful accounts $ 1,371 $ 573 $ (1,293) (a) $ 651 Inventory reserve 24,804 47,923 (36,087) 36,640 (a) Represents write-off of uncollectible accounts |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Jan. 30, 2021 | |
Summary of significant accounting policies | |
Fiscal year | Fiscal year The Company’s fiscal year is the 52 or 53 weeks ending on the Saturday closest to January 31. The Company’s fiscal years ended January 30, 2021 (fiscal 2020), February 1, 2020 (fiscal 2019), and February 2, 2019 (fiscal 2018) were 52-week years. |
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 operating lease assets, loyalty program and income taxes to be the most significant accounting policies that involve management estimates and judgments. The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact the Company’s results of operations. While the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated, the Company has made accounting estimates based on the facts and circumstances available as of the reporting date. Actual amounts could differ from these estimates, and such differences could be material. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
Consolidation | Consolidation The Company’s consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts, transactions, and unrealized profit were eliminated in consolidation. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand and highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents also include amounts due from third-party financial institutions for credit card and debit card transactions. These receivables typically settle in five days or less with little or no default risk. January 30, February 1, (In thousands) 2021 2020 Cash $ 887,299 $ 212,876 Short-term investments 99,986 110,000 Receivables from third-party financial institutions for credit card and debit card transactions 58,766 69,449 Cash and cash equivalents $ 1,046,051 $ 392,325 |
Short-term investments | Short-term investments The balance sheet classification of investments is determined at the time of purchase and evaluated at each balance sheet date. Money market funds, certificates of deposit, and time deposits with maturities of greater than three months but no more than twelve months are carried at cost, which approximates fair value and are recorded in the consolidated balance sheets in short-term investments (see Note 16, “Investments”). |
Receivables | Receivables Receivables consist principally of amounts due from vendors and amounts related to the employee retention credit (see Note 3, “Impact of the COVID-19 pandemic”). The Company does not require collateral on its receivables and does not accrue interest. Credit risk with respect to receivables is limited due to the diversity of vendors comprising the Company’s vendor base. The Company performs ongoing credit evaluations of its vendors and evaluates the collectability of its receivables based on the length of time the receivable is past due and historical experience. The receivable for vendor allowances was $90,271 and $113,048 as of January 30, 2021 and February 1, 2020, respectively. The allowance for doubtful receivables was $768 and $1,363 as of January 30, 2021 and February 1, 2020, respectively. The receivable for the employee retention credit was $52,405 as of January 30, 2021. There was no receivable for the employee retention credit as of February 1, 2020. |
Merchandise inventories | Merchandise inventories Merchandise inventories are stated at the lower of cost or net realizable value. Cost is determined using the moving average cost method and includes costs incurred to purchase and distribute goods. Inventory cost also includes vendor allowances related to co-op advertising, markdowns, and volume discounts. The Company maintains an inventory reserve for lower of cost or net realizable value and shrink. The inventory reserve was $52,860 and $46,941 as of January 30, 2021 and February 1, 2020, respectively. |
Fair value of financial instruments | Fair value of financial instruments The carrying value of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable approximates their estimated fair values due to the short maturities of these instruments. There was no outstanding debt as of January 30, 2021 and February 1, 2020. |
Property and equipment | Property and equipment Property and equipment is stated at cost, net of accumulated depreciation, and depreciated using the straight-line method over the shorter of the assets’ estimated useful lives or lease term. Leasehold improvements purchased after the beginning of the initial lease term are amortized over the shorter of the assets’ useful lives or a term that includes the original lease term, plus any renewals that are reasonably certain at the date the leasehold improvements are acquired. Repair and maintenance costs are expensed as incurred. Equipment and fixtures 1 to 10 years Electronic equipment and software 3 to 5 years Costs incurred to obtain or develop internal use software are capitalized. These costs are amortized on a straight-line basis over the estimated useful life of the software. |
Impairment of long-lived tangible assets | Impairment of long-lived tangible and right-of-use assets The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets. The asset group identified is at the store level and includes both property and equipment and operating lease assets. Significant estimates are used in determining future cash flows of each store over its remaining lease term including our expectations of future projected cash flows including revenues and operating expenses. An impairment loss is recorded if the carrying amount of the long-lived asset exceeds its fair value. The Company evaluates long-lived tangible and right-of-use assets for indicators of impairment quarterly or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. The Company performs an undiscounted cash flow analysis over the asset group. Asset groups are written down only to the extent that their carrying value exceeds their respective fair value. Fair values of the asset group are determined by discounting the cash flows at a rate that approximates the cost of capital of a market participant. Management’s forecast of future cash flows is based on the income approach. The fair value of individual operating lease assets is determined under the market approach using estimated market rent assessments based on broker quotes. The determination of fair value under the income approach requires assumptions including forecasts of future cash flows (such as revenue growth rates and operating expenses) and selection of a market-based discount rate. Estimates of market rent are based on non-binding broker quotes. As these inputs are unobservable they are classified as Level 3 inputs under the fair value hierarchy (see Note 15, “Fair value measurements”). If actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to additional impairment losses in a future period (see Note 6, “Impairment, restructuring and other costs”). |
Goodwill and Other tangible assets | Goodwill Goodwill represents the excess of cost over the fair value of net assets acquired. The Company reviews the recoverability of goodwill annually during the fourth quarter or more frequently if an event occurs or circumstances change that would indicate that impairment may exist (see Note 8, “Goodwill”). Other intangible assets Other definite-lived intangible assets are amortized over their useful lives. The Company reviews the recoverability of intangible assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable (see Note 9, “Other intangible assets”). |
Leases | Leases The Company adopted ASU 2016-02, Leases (Topic 842) on February 3, 2019 using the modified retrospective approach. Results and disclosure requirements for reporting periods beginning February 3, 2019 and later are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported under Topic 840. The Company determines whether an arrangement is or contains a lease at contract inception. The lease classification evaluation begins at the lease commencement date. The lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain. Total rent payable is recorded during the lease term, including rent escalations in which the amount of future rent is fixed on the straight-line basis over the term of the lease (including the rent holiday period beginning upon control of the premises and any fixed payments stated in the lease). For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a right-of-use asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. Tenant incentives are amortized through the right-of-use asset as reduction of rent expense over the lease term. The difference between the minimum rents paid and the straight-line rent is reflected within the associated right-of-use asset. Certain leases contain provisions that require variable payments based upon sales volume or payment of common area maintenance costs, real estate taxes, and insurance related to leases . This results in some variability in lease expense as a percentage of revenues over the term of the lease in stores where variable lease costs are paid. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet. Short-term lease expense is recognized on a straight-line basis over the lease term. The Company subleases certain real estate to third parties for stores with excess square footage space. The Company does not separate lease and non-lease components (e.g., common area maintenance). As the interest rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate corresponding with the lease term. As there are no outstanding borrowings under the Company’s credit facility, this rate is estimated based on prevailing market conditions, comparable company and credit analysis, and judgment. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract (see Note 10, “Leases”). |
Loyalty program | Loyalty program The Company maintains a loyalty program, Ultamate Rewards, which allows members to earn points based on purchases of merchandise or services. Points earned are valid for at least one year. The loyalty program represents a material right to the customer and points may be redeemed on future products and services. Revenue from the loyalty program is recognized when the members redeem points or points expire. The Company defers revenue related to points earned that have not yet been redeemed. The amount of deferred revenue includes estimates for the standalone selling price of points earned by members and the percentage of points expected to be redeemed. The expected redemption percentage is based on historical redemption patterns and considers current information or trends. When a guest redeems points or the points expire, the Company recognizes revenue in net sales on the consolidated statements of operations. |
Credit cards | Credit cards The Company has agreements (the Agreements) with third parties to provide guests with private label credit cards and/or co-branded credit cards (collectively, the Credit Cards). The private label credit card can be used at any store location and online, and the co-branded credit card can be used anywhere the co-branded card is accepted. A third-party financing company is the sole owner of the accounts and underwrites the credit issued under the Credit Card programs. The Company’s performance obligation is to maintain the Ultamate Rewards loyalty program as only guests enrolled in the loyalty program can apply for the Credit Cards. Loyalty members earn points through purchases at Ulta Beauty and anywhere the co-branded credit card is accepted. The third parties reimburse the Company for certain credit card program costs such as advertising and loyalty points, which help promote the credit card program. The Company recognizes revenue when collectability is reasonably assured, under the assumption the amounts are not constrained and it is probable that a significant revenue reversal will not occur in future periods, which is generally the time at which the actual usage of the Credit Cards or specified transaction occurs. The Company accounts for the amounts associated with the Agreements as a single contract with the sole commercial objective to maintain the Credit Card programs. As a result, all amounts associated with the Agreements are recognized within net sales on the consolidated statements of operations. |
Gift card program | Gift card program The Company records a contract liability for gift card sales which will be redeemed in the future within deferred revenue on the consolidated balance sheets and recognized in net sales when the gift card is redeemed for product or services. Gift cards do not expire and do not include service fees that decrease guest balances. The Company has maintained historical data related to gift card transactions sold and redeemed over a significant time frame. Gift card breakage (amounts not expected to be redeemed) is recognized to the extent there is no requirement for remitting balances to governmental agencies under unclaimed property laws. Estimated gift card breakage revenue is recognized over time in proportion to actual gift card redemptions. Gift card breakage revenue was $11,717, $12,448, and $12,446 in fiscal 2020, 2019, and 2018, respectively. |
Revenue recognition | Revenue recognition Revenue is recognized when control of the promised goods or services is transferred to the guest, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a guest; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, a performance obligation is satisfied. Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue. Revenue from merchandise sales at retail stores is recognized at the point of sale, net of estimated returns. Revenue from e-commerce merchandise sales is recognized upon shipment to the guest or guest pickup of the merchandise based on meeting the transfer of control criteria, net of estimated returns. Salon services revenue is recognized at the time the service is provided to the guest. Shipping and handling are treated as costs to fulfill the contract and not a separate performance obligation. Accordingly, the Company recognizes revenue for its single performance obligation related to e-commerce sales at the time control of the merchandise passes to the customer, which is at the time of shipment or guest pickup. The Company provides refunds for merchandise returns within 60 days from the original purchase date; however, due to store closures during the first half of fiscal 2020, we extended our return policy to 180 days through November 16, 2020. State sales taxes are presented on a net basis as the Company considers itself a pass-through conduit for collecting and remitting state sales tax. Company coupons and other incentives are recorded as a reduction of net sales. |
Vendor allowances | Vendor allowances The Company receives allowances from vendors in the normal course of business including advertising and markdown allowances, purchase volume discounts and rebates, reimbursement for defective merchandise, and certain selling and display expenses. Substantially all vendor allowances are recorded as a reduction of the vendor’s product cost and are recognized in cost of sales as the product is sold. |
Advertising | Advertising Advertising costs consist principally of print, digital and social media, and television and radio advertising. Costs related to advertising are expensed in the period the related promotional event occurs. Prepaid advertising costs included in prepaid expenses and other current assets on the consolidated balance sheets were $7,112 and $9,605 as of January 30, 2021 and February 1, 2020, respectively. Advertising expense, exclusive of incentives from vendors and start-up advertising expense, is presented in the following table: Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Advertising expense $ 281,573 $ 317,865 $ 294,489 Advertising expense as a percentage of net sales 4.6% 4.3% 4.4% |
Pre-opening expenses | Pre-opening expenses Non-capital expenditures incurred prior to the grand opening of a new, remodeled, or relocated store are expensed as incurred. |
Cost of sales | Cost of sales Cost of sales includes the cost of merchandise sold, including substantially all vendor allowances, which are treated as a reduction of merchandise costs; distribution costs including labor and related benefits, freight, rent, depreciation and amortization, real estate taxes, utilities, and insurance; shipping and handling costs; retail stores 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. |
Selling, general and administrative expenses | Selling, general and administrative expenses Selling, general and administrative (SG&A) expenses includes payroll, bonus, and benefit costs for retail and corporate employees; advertising and marketing 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 store and distribution operations, which are included in cost of sales; and legal, finance, information systems, and other corporate overhead costs. |
Income taxes | Income taxes Deferred income taxes reflect the net tax effect of temporary differences between the financial statement carrying amounts of assets and liabilities and their tax bases. The amounts reported were derived using the enacted tax rates in effect for the year the differences are expected to reverse. Income tax benefits related to uncertain tax positions are recognized only when it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. Penalties and interest related to unrecognized tax positions are recorded in income tax expense in the consolidated statements of operations (see Note 13, “Income taxes”). |
Share-based compensation | Stock-based compensation Stock-based compensation expense is measured at grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period for awards expected to vest. Stock-based compensation expense was $27,583, $25,642, and $27,489 in fiscal 2020, 2019 and 2018, respectively (see Note 17, “Stock-based compensation”). |
Insurance expense | Insurance expense The Company has insurance programs with third party insurers for employee health, workers compensation, and general liability, among others, to limit the Company’s liability exposure. The insurance programs are premium based and include retentions, deductibles, and stop loss coverage. Current stop loss coverage per claim is $350 for employee health claims, $100 for general liability claims, and $250 for workers compensation claims. The Company makes collateral and premium payments during the plan year and accrues expenses in the event additional premium is due from the Company based on actual claim results. In fiscal 2018, the Company created UB Insurance, Inc., an Arizona-based wholly owned captive insurance subsidiary of the Company, which charges the operating subsidiaries of the Company premiums to insure certain liability exposures. Pursuant to Arizona insurance regulations, UB Insurance, Inc. maintains certain levels of cash and cash equivalents related to its liability exposures. |
Net income per common share | Net income per common share Basic net income per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per common share includes dilutive common stock equivalents, using the treasury stock method (see Note 18, “Net income per common share”). |
Recent accounting pronouncements not yet adopted and Recently adopted accounting pronouncements | Recent accounting pronouncements not yet adopted Taxes – Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In December 2019, the Financial Accounting Standards Board (FASB) issued (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intraperiod allocation, and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group, among others. This guidance is effective after December 15, 2020. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The adoption of ASU 2019-12 is not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows. Recently adopted accounting pronouncements Intangibles – Goodwill and Other-Internal-Use Software. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which clarifies and aligns the accounting for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019 and should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. The Company adopted the new guidance prospectively as of February 2, 2020, and its adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Summary of significant accounting policies | |
Schedule of cash and cash equivalents | January 30, February 1, (In thousands) 2021 2020 Cash $ 887,299 $ 212,876 Short-term investments 99,986 110,000 Receivables from third-party financial institutions for credit card and debit card transactions 58,766 69,449 Cash and cash equivalents $ 1,046,051 $ 392,325 |
Schedule of total advertising costs, exclusive of incentives from vendors and start-up advertising expense | Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Advertising expense $ 281,573 $ 317,865 $ 294,489 Advertising expense as a percentage of net sales 4.6% 4.3% 4.4% |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
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: Fiscal year ended January 30, February 1, February 2, 2021 2020 2019 Cosmetics 44% 50% 51% Skincare, bath, and fragrance 28% 22% 21% Haircare products and styling tools 20% 19% 19% Services 3% 5% 5% Other (nail products, accessories, and other) 5% 4% 4% 100% 100% 100% |
Summary of changes in deferred revenue | The following table provides a summary of the changes included in deferred revenue during fiscal years 2020 and 2019: January 30, February 1, (In thousands) 2021 2020 Beginning balance $ 230,011 $ 193,585 Additions to contract liabilities (1) 200,267 206,701 Deductions to contract liabilities (2) (161,246) (170,275) Ending balance $ 269,032 $ 230,011 (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. |
Impairment, restructuring and_2
Impairment, restructuring and other costs (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Impairment, restructuring and other costs | |
Summary of impairment, restructuring and other costs | Fiscal year ended January 30, (In thousands) 2021 Impairment of long-lived tangible and right-of-use assets $ 41,948 Store closures Impairment of long-lived tangible and right-of-use assets (1) 19,569 Lease termination costs 7,443 Severance (2) 489 Total store closures 27,501 Suspension of Canadian expansion Impairment of long-lived tangible and right-of-use assets (1) 11,016 Lease termination costs 17,388 Severance (2) 717 Total suspension of Canadian expansion 29,121 Other severance (2) 15,752 Total (3) $ 114,322 (1) Amount included in the non-cash $72,533 long-lived asset impairment charge on the consolidated statements of cash flows for the fiscal year ended January 30, 2021. (2) As of January 30, 2021, there was $9,476 in accrued liabilities on the consolidated balance sheets primarily for severance. (3) There were no impairment, restructuring and other costs recognized during the fiscal years ended February 1, 2020 and February 2, 2019. |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Property and equipment | |
Schedule of components of property and equipment | January 30, February 1, (In thousands) 2021 2020 Equipment and fixtures $ 1,083,509 $ 1,073,764 Leasehold improvements 782,036 803,398 Electronic equipment and software 649,603 596,323 Construction-in-progress 52,668 92,355 2,567,816 2,565,840 Less: accumulated depreciation and amortization (1,572,021) (1,360,316) Property and equipment, net $ 995,795 $ 1,205,524 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Goodwill | |
Schedule of changes in the carrying amounts of goodwill | The changes in the carrying amounts of goodwill during the fiscal years 2020 and 2019 are as follows: January 30, February 1, (In thousands) 2021 2020 Balance at beginning of the period $ 10,870 $ 10,870 Acquisitions — — Balance at the end of the period $ 10,870 $ 10,870 |
Other intangible assets (Tables
Other intangible assets (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Other intangible assets | |
Schedule of other intangible assets subject to amortization | January 30, 2021 February 1, 2020 Weighted-average Gross Gross remaining useful carrying Accumulated carrying Accumulated (In thousands) life in years value amortization Net value amortization Net Developed technology 2.7 $ 4,631 $ (2,166) $ 2,465 $ 4,631 $ (1,240) $ 3,391 |
Schedule of estimated amortization expense related to intangible assets | Estimated amortization expense Fiscal year (In thousands) 2021 $ 926 2022 926 2023 613 2024 — 2025 — 2026 and thereafter — $ 2,465 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Leases | |
Schedule of leases | The following table presents supplemental balance sheet information, the weighted-average remaining lease term, and discount rate for operating leases: January 30, February 1, (In thousands) Classification on the Balance Sheet 2021 2020 Right-of-use assets Operating lease assets $ 1,504,614 $ 1,537,565 Current lease liabilities Current operating lease liabilities $ 253,415 $ 239,629 Non-current lease liabilities Non-current operating lease liabilities 1,643,386 1,698,718 Total lease liabilities $ 1,896,801 $ 1,938,347 Weighted-average remaining lease term 6.9 7.3 Weighted-average discount rate 3.6% 4.1% |
Summary of information related to lease costs for operating leases | The following table presents the components of lease cost for operating leases: Fiscal Year Ended January 30, February 1, (In thousands) Classification on the Statement of Operations 2021 2020 Operating lease cost Cost of sales (1) $ 304,743 $ 289,007 Variable lease cost Cost of sales 80,557 77,142 Short-term lease cost Selling, general and administrative expenses 567 352 Sublease income Net sales (827) (691) Total lease cost $ 385,040 $ 365,810 (1) The majority of operating lease cost relates to retail stores, distribution centers, and fast fulfillment centers and is classified within cost of sales. Operating lease cost for corporate offices is classified within the selling, general and administrative expenses. Operating lease cost from the control date through store opening date is classified within pre-opening expenses. |
Schedule of cash flow information related to operating leases | The following table presents supplemental disclosures of cash flow information related to operating leases: Fiscal Year Ended January 30, February 1, (In thousands) 2021 2020 Cash paid for operating lease liabilities (1) $ 354,133 $ 338,942 Operating lease assets obtained in exchange for operating lease liabilities (non-cash) 255,966 355,286 (1) Excludes $33,092 and $71,294 related to cash received for tenant incentives as of January 30, 2021 and February 1, 2020, respectively. |
Schedule of maturities of non-cancellable operating lease liabilities | The following table presents maturities of operating lease liabilities as of January 30, 2021: Fiscal year (In thousands) 2021 $ 319,430 2022 353,137 2023 316,199 2024 283,813 2025 254,364 2026 and thereafter 624,925 Total lease payments $ 2,151,868 Less: imputed interest (255,067) Present value of operating lease liabilities $ 1,896,801 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Accrued liabilities | |
Schedule of accrued liabilities | January 30, February 1, (In thousands) 2021 2020 Accrued payroll, bonus, and employee benefits $ 143,992 $ 77,435 Accrued taxes 36,787 39,051 Other accrued liabilities 115,555 129,602 Accrued liabilities $ 296,334 $ 246,088 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Income Taxes | |
Schedule of provision for income taxes | Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Current: Federal $ 67,724 $ 163,596 $ 137,255 State 11,534 31,106 29,247 Total current 79,258 194,702 166,502 Deferred: Federal (19,631) 1,182 29,374 State (4,377) 4,321 4,706 Total deferred (24,008) 5,503 34,080 Provision for income taxes $ 55,250 $ 200,205 $ 200,582 |
Schedule of reconciliation of federal statutory rate to effective tax rate | Fiscal year ended January 30, February 1, February 2, 2021 2020 2019 Federal statutory rate 21.0 % 21.0 % 21.0 % State effective rate, net of federal tax benefit 2.9 % 3.1 % 3.1 % Executive compensation limitation 1.2 % 0.2 % 0.2 % Excess deduction of stock compensation (0.3) % (1.1) % (0.6) % Other (0.9) % (1.1) % (0.4) % Effective tax rate 23.9 % 22.1 % 23.3 % |
Schedule of components of deferred tax assets and liabilities | January 30, February 1, (In thousands) 2021 2020 Deferred tax assets: Operating lease liability $ 484,780 $ 496,977 Reserves not currently deductible 32,590 35,626 Accrued liabilities 31,056 27,363 Employee benefits 23,687 22,907 Inventory valuation 8,386 4,021 NOL carryforwards 255 288 Credit carryforwards 291 224 Other — 1,019 Total deferred tax assets 581,045 588,425 Deferred tax liabilities: Operating lease asset 561,605 567,198 Property and equipment 32,812 61,570 Prepaid expenses 46,013 45,354 Receivables not currently includable 3,720 2,863 Intangibles 585 807 Other 1,669 — Total deferred tax liabilities 646,404 677,792 Net deferred tax liability $ (65,359) $ (89,367) |
Schedule of reconciliation of unrecognized tax benefits, excluding interest and penalties | January 30, February 1, (In thousands) 2021 2020 Balance at beginning of the year $ 3,536 $ 3,844 Increase due to a prior year tax position 224 602 Decrease due to a prior year tax position (977) (910) Balance at end of the year $ 2,783 $ 3,536 |
Net income per common share (Ta
Net income per common share (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
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 share | Fiscal year ended January 30, February 1, February 2, (In thousands, except per share data) 2021 2020 2019 Numerator: Net income $ 175,835 $ 705,945 $ 658,559 Denominator: Weighted-average common shares – Basic 56,351 57,840 59,864 Dilutive effect of stock options and non-vested stock 207 265 317 Weighted-average common shares – Diluted 56,558 58,105 60,181 Net income per common share: Basic $ 3.12 $ 12.21 $ 11.00 Diluted $ 3.11 $ 12.15 $ 10.94 |
Share repurchase program (Table
Share repurchase program (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Share repurchase program | |
Summary of the Company's common stock repurchase activity | A summary of common stock repurchase activity is presented in the following table: Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Shares repurchased 475 2,321 2,464 Total cost of shares repurchased $ 114,895 $ 680,979 $ 616,194 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Schedule of information related to the incentive award plan | Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 Stock options $ 10,757 $ 8,660 $ 8,590 Restricted stock units 16,608 12,762 12,077 Performance-based restricted stock units 218 4,220 6,822 Total stock-based compensation expense $ 27,583 $ 25,642 $ 27,489 Cash received from stock option exercises $ 12,229 $ 43,780 $ 13,121 Income tax benefit $ 750 $ 11,600 $ 6,135 |
Schedule of weighted average assumptions to determine grant date fair value of employee stock options | Fiscal year ended January 30, February 1, February 2, 2021 2020 2019 Volatility rate 43.0% 31.0% 29.0% Average risk-free interest rate 0.3% 2.3% 2.4% Average expected life (in years) 3.4 3.5 3.4 Dividend yield None None None |
Information related to common stock options plan | Fiscal year ended January 30, February 1, February 2, (In thousands, except weighted-average grant date fair value) 2021 2020 2019 Weighted-average grant date fair value $ 54.40 $ 89.91 $ 50.10 Fair value of options vested 9,741 9,143 10,042 Intrinsic value of options exercised 11,304 51,650 25,902 |
Schedule of options outstanding and exercisable based on ranges of exercise prices | The following table presents information related to stock options outstanding and stock options exercisable at January 30, 2021 based on ranges of exercise prices (shares in thousands): Options outstanding Options exercisable Weighted- Weighted- average average remaining remaining contractual Weighted- contractual Weighted- Number of life average Number of life average Range of Exercise Prices options (years) exercise price options (years) exercise price $57.42 – $127.15 31 2 $ 83.88 31 2 $ 83.88 $127.16 – $164.06 104 5 163.63 54 5 163.23 $164.07 – $174.45 234 9 174.45 – – – $174.46 – $204.27 139 7 201.79 73 6 199.51 $204.28 – $281.53 78 6 279.03 56 6 278.91 $281.54 – $348.73 85 8 348.73 22 8 348.73 $57.42 – $348.73 671 7 $ 208.47 236 5 $ 209.03 |
Summary of status of performance-based restricted stock unit activity | Fiscal 2020 Fiscal 2019 Fiscal 2018 Weighted- Weighted- Weighted- Number of average Number of average Number of average units grant date units grant date units grant date Beginning of year 62 $ 267.60 94 $ 214.64 78 $ 196.81 Granted – – 21 348.73 33 204.27 Change in performance award payout (5) 204.27 (3) 281.53 22 191.76 Vested (14) 281.53 (43) 191.76 (36) 151.20 Forfeited (6) 263.38 (7) 258.80 (3) 224.49 End of year 37 $ 271.88 62 $ 267.60 94 $ 214.64 Expected to vest 35 $ 271.88 57 $ 267.60 87 $ 214.64 |
Stock options | |
Information related to common stock options plan | Fiscal 2020 Fiscal 2019 Fiscal 2018 Weighted- Weighted- Weighted- Number of average Number of average Number of average options exercise price options exercise price options exercise price Beginning of year 539 $ 212.58 755 $ 174.34 766 $ 147.76 Granted 248 174.45 97 348.73 163 204.27 Exercised (90) 135.70 (285) 153.64 (166) 78.81 Forfeited/Expired (26) 219.47 (28) 263.34 (8) 260.83 End of year 671 $ 208.47 539 $ 212.58 755 $ 174.34 Exercisable at end of year 236 $ 209.03 172 $ 159.39 296 $ 134.27 Vested and Expected to vest 639 $ 208.49 510 $ 211.14 718 $ 173.02 |
Restricted stock units | |
Information related to common stock options plan | Fiscal 2020 Fiscal 2019 Fiscal 2018 Weighted- Weighted- Weighted- Number of average grant Number of average grant Number of average grant units date fair value units date fair value units date fair value Beginning of year 159 $ 259.21 168 $ 220.68 134 $ 207.70 Granted 163 179.72 53 335.28 97 208.82 Vested (38) 276.51 (46) 207.77 (52) 164.35 Forfeited (31) 218.40 (16) 259.65 (11) 227.44 End of year 253 $ 210.46 159 $ 259.21 168 $ 220.68 Expected to vest 234 $ 210.46 147 $ 259.21 154 $ 220.68 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Employee benefit plans | |
Schedule of total expense recorded under the 401(k) retirement plan included in SG&A expenses in the consolidated statements of operations | Fiscal year ended January 30, February 1, February 2, (In thousands) 2021 2020 2019 401(k) plan matching contribution expense $ 16,878 $ 16,556 $ 10,029 |
Schedule of amounts included in the consolidated balance sheets related to the deferred compensation plan | Amounts included in the consolidated balance sheets related to the deferred compensation plan were as follows: January 30, February 1, (In thousands) 2021 2020 Deferred compensation plan liability $ 32,909 $ 29,442 Deferred compensation plan assets 33,223 27,849 |
Selected quarterly financial _2
Selected quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Selected quarterly financial data (unaudited) | |
Schedule of unaudited quarterly results of operations | Fiscal 2020 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 1,173,210 $ 1,228,009 $ 1,552,033 $ 2,198,701 Cost of sales 869,605 899,002 1,006,514 1,427,673 Gross profit 303,605 329,007 545,519 771,028 Selling, general and administrative expenses 380,912 271,587 416,378 514,140 Impairment, restructuring and other costs 19,542 40,758 23,624 30,398 Pre-opening expenses 4,635 3,907 4,240 2,218 Operating income (loss) (101,484) 12,755 101,277 224,272 Interest expense, net 1,272 2,617 1,383 463 Income (loss) before income taxes (102,756) 10,138 99,894 223,809 Income tax expense (benefit) (24,247) 2,086 25,096 52,315 Net income (loss) $ (78,509) $ 8,052 $ 74,798 $ 171,494 Net income (loss) per common share: Basic $ (1.39) $ 0.14 $ 1.33 $ 3.04 Diluted $ (1.39) $ 0.14 $ 1.32 $ 3.03 Fiscal 2019 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 1,743,029 $ 1,666,607 $ 1,682,514 $ 2,305,918 Cost of sales 1,098,182 1,060,708 1,059,081 1,499,033 Gross profit 644,847 605,899 623,433 806,885 Selling, general and administrative expenses 403,133 392,843 449,198 515,542 Pre-opening expenses 4,174 5,038 6,455 3,587 Operating income 237,540 208,018 167,780 287,756 Interest income, net (2,046) (1,671) (900) (439) Income before income taxes 239,586 209,689 168,680 288,195 Income tax expense 47,365 48,431 38,933 65,476 Net income $ 192,221 $ 161,258 $ 129,747 $ 222,719 Net income per common share: Basic $ 3.28 $ 2.77 $ 2.25 $ 3.91 Diluted $ 3.26 $ 2.76 $ 2.25 $ 3.89 |
Business and basis of present_2
Business and basis of presentation (Details) | 12 Months Ended |
Jan. 30, 2021statesegmentstore | |
Business and basis of presentation | |
Number of stores operated | store | 1,264 |
Number of states in which entity operates | state | 50 |
Number of reportable segments | segment | 1 |
Summary of significant accoun_4
Summary of significant accounting policies (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Fiscal period | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 364 days | 364 days | 364 days |
Minimum | |||||||||||
Fiscal period | 364 days | ||||||||||
Maximum | |||||||||||
Fiscal period | 371 days |
Summary of significant accoun_5
Summary of significant accounting policies - Receivables, Cash and cash equivalents, Merchandise Inventories and Outstanding Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Receivables | ||||
Allowance for doubtful receivables | $ 768 | $ 1,363 | ||
Amount of receivable for employee retention credit | 52,405 | 0 | ||
Cash and cash equivalents | ||||
Cash | 887,299 | 212,876 | ||
Short- term investments | 99,986 | 110,000 | ||
Receivables from third-party financial institutions for credit card and debit card transactions | 58,766 | 69,449 | ||
Cash and cash equivalents | 1,046,051 | 392,325 | $ 409,251 | $ 277,445 |
Merchandise inventories | ||||
Inventory reserve | 52,860 | 46,941 | ||
Debt | ||||
Outstanding debt | 0 | 0 | ||
Vendor allowances | ||||
Receivables | ||||
Receivable | $ 90,271 | $ 113,048 |
Summary of significant accoun_6
Summary of significant accounting policies - Property and Equipment (Details) | 12 Months Ended |
Jan. 30, 2021 | |
Equipment and fixtures | Minimum | |
Property and equipment | |
Estimated useful lives or the expected lease term | 1 year |
Equipment and fixtures | Maximum | |
Property and equipment | |
Estimated useful lives or the expected lease term | 10 years |
Electronic equipment and software | Minimum | |
Property and equipment | |
Estimated useful lives or the expected lease term | 3 years |
Electronic equipment and software | Maximum | |
Property and equipment | |
Estimated useful lives or the expected lease term | 5 years |
Summary of significant accoun_7
Summary of significant accounting policies - Loyalty Program (Details) | 12 Months Ended |
Jan. 30, 2021 | |
Summary of significant accounting policies | |
Minimum term that loyalty program points are valid | 1 year |
Summary of significant accoun_8
Summary of significant accounting policies - Gift Card Program and Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Revenue recognition | |||||||||||
Revenues | $ 2,198,701 | $ 1,552,033 | $ 1,228,009 | $ 1,173,210 | $ 2,305,918 | $ 1,682,514 | $ 1,666,607 | $ 1,743,029 | $ 6,151,953 | $ 7,398,068 | $ 6,716,615 |
Term of refund for product returns | 60 days | ||||||||||
Gift card breakage | |||||||||||
Revenue recognition | |||||||||||
Revenues | $ 11,717 | $ 12,448 | $ 12,446 |
Summary of significant accoun_9
Summary of significant accounting policies - Advertising (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Summary of significant accounting policies | |||
Advertising expense | $ 281,573 | $ 317,865 | $ 294,489 |
Advertising expense as a percentage of net sales | 4.60% | 4.30% | 4.40% |
Prepaid advertising costs | $ 7,112 | $ 9,605 |
Summary of significant accou_10
Summary of significant accounting policies - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Summary of significant accounting policies | |||
Stock-base compensation | $ 27,583 | $ 25,642 | $ 27,489 |
Summary of significant accou_11
Summary of significant accounting policies - Insurance Expense (Details) $ in Thousands | 12 Months Ended |
Jan. 30, 2021USD ($) | |
Summary of significant accounting policies | |
Stop loss coverage per employee health claim | $ 350 |
Stop loss coverage per general liability claim | 100 |
Stop loss coverage per workers compensation claim | $ 250 |
Impact of the COVID-19 pandem_2
Impact of the COVID-19 pandemic (Details) - USD ($) $ in Thousands | Sep. 02, 2020 | Mar. 18, 2020 | Jan. 30, 2021 | Feb. 01, 2020 |
Reduction of associated costs related to ERC | $ 52,405 | $ 0 | ||
Deferred social security tax payments | 43,845 | |||
Amount of cash tax refund | $ 4,600 | |||
Revolving loans | ||||
Proceeds from Lines of Credit | $ 800,000 | |||
Repayments of Lines of Credit | $ 800,000 |
Acquisitions (Details)
Acquisitions (Details) - Acquisition of technology companies $ in Thousands | 12 Months Ended |
Feb. 02, 2019USD ($)company | |
Acquisitions | |
Payments to acquire companies | $ | $ 13,606 |
Number of companies acquired | company | 2 |
Revenue - Disaggregated revenue
Revenue - Disaggregated revenue (Details) - Sales Revenue | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Disaggregated revenue | |||
Concentration (as a percent) | 100.00% | 100.00% | 100.00% |
Cosmetics | |||
Disaggregated revenue | |||
Concentration (as a percent) | 44.00% | 50.00% | 51.00% |
Skincare, bath, and fragrance | |||
Disaggregated revenue | |||
Concentration (as a percent) | 28.00% | 22.00% | 21.00% |
Haircare products and styling tools | |||
Disaggregated revenue | |||
Concentration (as a percent) | 20.00% | 19.00% | 19.00% |
Services | |||
Disaggregated revenue | |||
Concentration (as a percent) | 3.00% | 5.00% | 5.00% |
Other (nail products, accessories, and other) | |||
Disaggregated revenue | |||
Concentration (as a percent) | 5.00% | 4.00% | 4.00% |
Revenue - Deferred revenue (Det
Revenue - Deferred revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Summary of changes in deferred revenue | ||
Balance at beginning of period | $ 230,011 | $ 193,585 |
Additions to contract liabilities | 200,267 | 206,701 |
Deductions to contract liabilities | (161,246) | (170,275) |
Balance at end of period | 269,032 | 230,011 |
Other amounts included in deferred revenue | $ 5,351 | $ 7,524 |
Impairment, restructuring and_3
Impairment, restructuring and other costs - Tabular disclosure (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Jan. 30, 2021USD ($) | Oct. 31, 2020USD ($) | Aug. 01, 2020USD ($)store | May 02, 2020USD ($) | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | Feb. 02, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment of long-lived tangible and right-of-use assets | $ 41,948 | ||||||
Total | $ 30,398 | $ 23,624 | $ 40,758 | $ 19,542 | 114,322 | ||
Restructuring and other costs | |||||||
Non-cash impairment charges | 72,533 | ||||||
Restructuring accrual recorded in accrued liabilities | $ 9,476 | 9,476 | |||||
Restructuring and other | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Total | 114,322 | ||||||
Restructuring and other costs | |||||||
Non-cash impairment charges | $ 0 | $ 0 | |||||
Store Closures | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment of long-lived tangible and right-of-use assets | 19,569 | ||||||
Lease termination costs | 7,443 | ||||||
Severance | 489 | ||||||
Total | 27,501 | ||||||
Restructuring and other costs | |||||||
Number of store closings | store | 19 | ||||||
Suspension of Canadian Expansion | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment of long-lived tangible and right-of-use assets | 11,016 | ||||||
Lease termination costs | 17,388 | ||||||
Severance | 717 | ||||||
Total | 29,121 | ||||||
Other Severance | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Total | $ 15,752 |
Property and equipment (Details
Property and equipment (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Property and equipment | ||
Property and equipment, gross | $ 2,567,816 | $ 2,565,840 |
Less: accumulated depreciation and amortization | (1,572,021) | (1,360,316) |
Property and equipment, net | 995,795 | 1,205,524 |
Equipment and fixtures | ||
Property and equipment | ||
Property and equipment, gross | 1,083,509 | 1,073,764 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, gross | 782,036 | 803,398 |
Electronic equipment and software | ||
Property and equipment | ||
Property and equipment, gross | 649,603 | 596,323 |
Construction-in-progress | ||
Property and equipment | ||
Property and equipment, gross | $ 52,668 | $ 92,355 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Changes in carrying amounts of goodwill | ||
Goodwill at beginning of period | $ 10,870 | $ 10,870 |
Acquisitions | 0 | 0 |
Goodwill at end of period | $ 10,870 | $ 10,870 |
Other intangible assets - Subje
Other intangible assets - Subject to amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Other intangible assets | |||
Net | $ 2,465 | ||
Amortization expense related to intangible assets | $ 926 | $ 926 | $ 314 |
Developed technology | |||
Other intangible assets | |||
Weighted-average remaining useful life | 2 years 8 months 12 days | ||
Gross carrying value | $ 4,631 | 4,631 | |
Accumulated amortization | (2,166) | (1,240) | |
Net | $ 2,465 | $ 3,391 |
Other intangible assets - Estim
Other intangible assets - Estimated amortization expense (Details) $ in Thousands | Jan. 30, 2021USD ($) |
Estimated amortization expense related to intangible assets for the next five years: | |
2021 | $ 926 |
2022 | 926 |
2023 | 613 |
Net | $ 2,465 |
Leases - Lease costs (Details)
Leases - Lease costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Lease Costs | ||
Total lease cost | $ 385,040 | $ 365,810 |
Cost of sales | ||
Lease Costs | ||
Operating lease cost | 304,743 | 289,007 |
Variable lease cost | 80,557 | 77,142 |
Selling, general and administrative expenses | ||
Lease Costs | ||
Short-term lease cost | 567 | 352 |
Net sales | ||
Lease Costs | ||
Sublease income | $ (827) | $ (691) |
Leases - Weighted- average rema
Leases - Weighted- average remaining lease term and discount rate (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Leases | ||
Initial lease term | 10 years | |
Operating lease assets | $ 1,504,614 | $ 1,537,565 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease assets | |
Current operating lease liabilities | $ 253,415 | 239,629 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current operating lease liabilities | |
Non-current operating lease liabilities | $ 1,643,386 | 1,698,718 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Non-current operating lease liabilities | |
Total lease liabilities | $ 1,896,801 | $ 1,938,347 |
Weighted-average remaining lease term | 6 years 10 months 24 days | 7 years 3 months 18 days |
Weighted-average discount rate | 3.60% | 4.10% |
Leases - Cash flow information
Leases - Cash flow information and non-cash activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Leases | ||
Cash paid for operating lease liabilities | $ 354,133 | $ 338,942 |
Operating lease assets obtained in exchange for operating lease liabilities (non-cash) | 255,966 | 355,286 |
Excluded cash received for tenant incentives | $ 33,092 | $ 71,294 |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Lessee, Operating Lease, Liability, Payment, Due, Rolling Maturity [Abstract] | ||
2021 | $ 319,430 | |
2022 | 353,137 | |
2023 | 316,199 | |
2024 | 283,813 | |
2025 | 254,364 | |
2026 and therafter | 624,925 | |
Total lease payments | 2,151,868 | |
Less: Imputed interest | (255,067) | |
Present value of operating lease liabilities | 1,896,801 | $ 1,938,347 |
Minimum lease payments for leases signed but not yet commenced | $ 75,782 |
Commitments and contingencies -
Commitments and contingencies - Contractual Obligations (Details) $ in Thousands | 12 Months Ended |
Jan. 30, 2021USD ($) | |
Purchase commitments for products and services for a new fast fulfillment center | |
Contractual obligations | |
Contractual obligations related to commitments | $ 1,020 |
Advertising and other goods and service contracts | |
Contractual obligations | |
Agreement term | 1 year |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Accrued liabilities | ||
Accrued payroll, bonus, and employee benefits | $ 143,992 | $ 77,435 |
Accrued taxes | 36,787 | 39,051 |
Other accrued liabilities | 115,555 | 129,602 |
Accrued liabilities | $ 296,334 | $ 246,088 |
Income taxes - Components of Pr
Income taxes - Components of Provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Current: | |||||||||||
Federal | $ 67,724 | $ 163,596 | $ 137,255 | ||||||||
State | 11,534 | 31,106 | 29,247 | ||||||||
Total current | 79,258 | 194,702 | 166,502 | ||||||||
Deferred: | |||||||||||
Federal | (19,631) | 1,182 | 29,374 | ||||||||
State | (4,377) | 4,321 | 4,706 | ||||||||
Total deferred | (24,008) | 5,503 | 34,080 | ||||||||
Provision for income taxes | $ 52,315 | $ 25,096 | $ 2,086 | $ (24,247) | $ 65,476 | $ 38,933 | $ 48,431 | $ 47,365 | $ 55,250 | $ 200,205 | $ 200,582 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of Federal Statutory Rate to Effective Tax Rate (Details) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Reconciliation of federal statutory rate to effective tax rate | |||
Federal statutory rate (as a percent) | 21.00% | 21.00% | 21.00% |
State effective rate, net of federal tax benefit (as a percent) | 2.90% | 3.10% | 3.10% |
Executive compensation limitation (as a percent) | 1.20% | 0.20% | 0.20% |
Excess deduction of stock compensation (as a percent) | (0.30%) | (1.10%) | (0.60%) |
Other (as a percent) | (0.90%) | (1.10%) | (0.40%) |
Effective tax rate (as a percent) | 23.90% | 22.10% | 23.30% |
Income taxes - Components of De
Income taxes - Components of Deferred Tax Assets and Liabilities and Credit Carryforwards (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Deferred tax assets: | ||
Operating lease liability | $ 484,780 | $ 496,977 |
Reserves not currently deductible | 32,590 | 35,626 |
Accrued liabilities | 31,056 | 27,363 |
Employee benefits | 23,687 | 22,907 |
Inventory valuation | 8,386 | 4,021 |
NOL carryforwards | 255 | 288 |
Credit carryforwards | 291 | 224 |
Other | 1,019 | |
Total deferred tax assets | 581,045 | 588,425 |
Deferred tax liabilities: | ||
Operating lease asset | 561,605 | 567,198 |
Property and equipment | 32,812 | 61,570 |
Prepaid expenses | 46,013 | 45,354 |
Receivables not currently includable | 3,720 | 2,863 |
Intangibles | 585 | 807 |
Other | 1,669 | |
Total deferred tax liabilities | 646,404 | 677,792 |
Net deferred tax liability | (65,359) | $ (89,367) |
Credit carryforwards | ||
Credit carryforwards for state income tax purposes | 291 | |
Federal | ||
Credit carryforwards | ||
Amount of net operating loss carryforwards that do not expire | 985 | |
State | ||
Credit carryforwards | ||
Amount of net operating loss carryforwards that expire | 533 | |
Amount of net operating loss carryforwards that do not expire | $ 36 |
Income taxes - Unrecognized Tax
Income taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Reconciliation of unrecognized tax benefits, excluding interest and penalties | ||
Balance at beginning of the year | $ 3,536 | $ 3,844 |
Increase due to a prior year tax position | 224 | 602 |
Decrease due to a prior year tax position | (977) | (910) |
Balance at the end of the year | $ 2,783 | $ 3,536 |
Debt (Details)
Debt (Details) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | |
Notes payable | ||
Outstanding borrowings under credit facility | $ 0 | $ 0 |
Revolving loans | ||
Notes payable | ||
Outstanding borrowings under credit facility | $ 0 | $ 0 |
Weighted average interest rate | 1.56% | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | ||
Notes payable | ||
Unused line fee (as a percent) | 0.20% | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | Minimum | ||
Notes payable | ||
Fixed charge coverage ratio covenant | 1 | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | London Interbank Offered Rate | Minimum | ||
Notes payable | ||
Interest rate margin (as a percent) | 1.125% | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | London Interbank Offered Rate | Maximum | ||
Notes payable | ||
Interest rate margin (as a percent) | 1.25% | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | Base Rate | Minimum | ||
Notes payable | ||
Interest rate margin (as a percent) | 0.00% | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | Base Rate | Maximum | ||
Notes payable | ||
Interest rate margin (as a percent) | 0.125% | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | Revolving loans | ||
Notes payable | ||
Maximum borrowing capacity | $ 1,000,000 | |
Contingent increase to revolving facility | 100,000 | |
Amendment No. 1 to the Second Amended and Restated Loan Agreement | Letters of credit | ||
Notes payable | ||
Maximum borrowing capacity | $ 50,000 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Level 2 | Non-qualified deferred compensation plan | ||
Fair value measurements | ||
Fair value of financial liabilities | $ 32,909 | $ 29,442 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Investments | |||
Short-term investments | $ 110,000 | ||
Contributions of capital to equity method investments | $ 5,665 | 62,946 | $ 2,101 |
Investment tax credits | 1,689 | 60,208 | |
Certificates of deposit | |||
Investments | |||
Short-term investments | 0 | ||
Renewable energy projects | |||
Investments | |||
Equity method investments | $ 3,174 | $ 3,936 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Stock-based compensation | |||
Cash received from stock option exercises | $ 12,229 | $ 43,780 | $ 13,121 |
Performance-based restricted stock units | |||
Stock-based compensation | |||
Vesting period | 3 years | ||
Amended and Restated 2011 Incentive Award Plan | |||
Stock-based compensation | |||
Common stock reserved for issuance upon grant or exercise of awards (in shares) | 2,791 | ||
Stock compensation expense | $ 27,583 | 25,642 | 27,489 |
Cash received from stock option exercises | 12,229 | 43,780 | 13,121 |
Income tax benefit | 750 | 11,600 | 6,135 |
Amended and Restated 2011 Incentive Award Plan | Stock options | |||
Stock-based compensation | |||
Stock compensation expense | 10,757 | 8,660 | 8,590 |
Amended and Restated 2011 Incentive Award Plan | Restricted stock units | |||
Stock-based compensation | |||
Stock compensation expense | 16,608 | 12,762 | 12,077 |
Amended and Restated 2011 Incentive Award Plan | Performance-based restricted stock units | |||
Stock-based compensation | |||
Stock compensation expense | $ 218 | $ 4,220 | $ 6,822 |
Stock-based compensation - Assu
Stock-based compensation - Assumptions to Estimate Fair Value of Stock Options (Details) - Stock options | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Weighted-average assumptions to estimate fair value | |||
Volatility rate (as a percent) | 43.00% | 31.00% | 29.00% |
Average risk-free interest rate (as a percent) | 0.30% | 2.30% | 2.40% |
Average expected life | 3 years 4 months 24 days | 3 years 6 months | 3 years 4 months 24 days |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Stock-based compensation - Stoc
Stock-based compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Share-based compensation | |||
Weighted-average grant date fair value (in dollars per share) | $ 54.40 | $ 89.91 | $ 50.10 |
Fair value of options vested | $ 9,741 | $ 9,143 | $ 10,042 |
Intrinsic value of options exercised | 11,304 | $ 51,650 | $ 25,902 |
Stock options | |||
Unrecognized compensation expense | $ 16,810 | ||
Weighted-average recognition period of unrecognized compensation expense | 2 years | ||
Number of options | |||
Beginning of year (in shares) | 539 | 755 | 766 |
Granted (in shares) | 248 | 97 | 163 |
Exercised (in shares) | (90) | (285) | (166) |
Forfeited (in shares) | (26) | (28) | (8) |
End of year (in shares) | 671 | 539 | 755 |
Exercisable at end of year (in shares) | 236 | 172 | 296 |
Vested and Expected to vest (in shares) | 639 | 510 | 718 |
Weighted average exercise price | |||
Beginning of year (in dollars per share) | $ 212.58 | $ 174.34 | $ 147.76 |
Granted (in dollars per share) | 174.45 | 348.73 | 204.27 |
Exercised (in dollars per share) | 135.70 | 153.64 | 78.81 |
Forfeited (in dollars per share) | 219.47 | 263.34 | 260.83 |
End of year (in dollars per share) | 208.47 | 212.58 | 174.34 |
Exercisable at end of year (in dollars per share) | 209.03 | 159.39 | 134.27 |
Vested and Expected to vest (in dollars per share) | $ 208.49 | $ 211.14 | $ 173.02 |
Stock-based compensation - Info
Stock-based compensation - Information Related to Stock Options Plans Based on Ranges of Exercise Prices (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Jan. 30, 2021USD ($)$ / sharesshares | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Aggregate intrinsic value of outstanding options (in dollars) | $ | $ 53,868 |
Aggregate intrinsic value of exercisable options (in dollars) | $ | $ 18,332 |
Sale price of common stock (in dollars per share) | $ 279.76 |
$57.42 - $127.15 | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Range of Exercise Prices, lower range limit (in dollars per share) | 57.42 |
Range of Exercise Prices, upper range limit (in dollars per share) | $ 127.15 |
Options outstanding, Number of options (in shares) | shares | 31 |
Options outstanding, Weighted-average remaining contractual life | 2 years |
Options outstanding, Weighted-average exercise price (in dollars per share) | $ 83.88 |
Options exercisable, Number of options (in shares) | shares | 31 |
Options exercisable, Weighted-average remaining contractual life | 2 years |
Options exercisable, Weighted-average exercise price (in dollars per share) | $ 83.88 |
$127.16 - $164.06 | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Range of Exercise Prices, lower range limit (in dollars per share) | 127.16 |
Range of Exercise Prices, upper range limit (in dollars per share) | $ 164.06 |
Options outstanding, Number of options (in shares) | shares | 104 |
Options outstanding, Weighted-average remaining contractual life | 5 years |
Options outstanding, Weighted-average exercise price (in dollars per share) | $ 163.63 |
Options exercisable, Number of options (in shares) | shares | 54 |
Options exercisable, Weighted-average remaining contractual life | 5 years |
Options exercisable, Weighted-average exercise price (in dollars per share) | $ 163.23 |
$164.07 - $174.45 | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Range of Exercise Prices, lower range limit (in dollars per share) | 164.07 |
Range of Exercise Prices, upper range limit (in dollars per share) | $ 174.45 |
Options outstanding, Number of options (in shares) | shares | 234 |
Options outstanding, Weighted-average remaining contractual life | 9 years |
Options outstanding, Weighted-average exercise price (in dollars per share) | $ 174.45 |
$174.46 - $204.27 | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Range of Exercise Prices, lower range limit (in dollars per share) | 174.46 |
Range of Exercise Prices, upper range limit (in dollars per share) | $ 204.27 |
Options outstanding, Number of options (in shares) | shares | 139 |
Options outstanding, Weighted-average remaining contractual life | 7 years |
Options outstanding, Weighted-average exercise price (in dollars per share) | $ 201.79 |
Options exercisable, Number of options (in shares) | shares | 73 |
Options exercisable, Weighted-average remaining contractual life | 6 years |
Options exercisable, Weighted-average exercise price (in dollars per share) | $ 199.51 |
$204.28 - $281.53 | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Range of Exercise Prices, lower range limit (in dollars per share) | 204.28 |
Range of Exercise Prices, upper range limit (in dollars per share) | $ 281.53 |
Options outstanding, Number of options (in shares) | shares | 78 |
Options outstanding, Weighted-average remaining contractual life | 6 years |
Options outstanding, Weighted-average exercise price (in dollars per share) | $ 279.03 |
Options exercisable, Number of options (in shares) | shares | 56 |
Options exercisable, Weighted-average remaining contractual life | 6 years |
Options exercisable, Weighted-average exercise price (in dollars per share) | $ 278.91 |
$281.54 - $348.73 | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Range of Exercise Prices, lower range limit (in dollars per share) | 281.54 |
Range of Exercise Prices, upper range limit (in dollars per share) | $ 348.73 |
Options outstanding, Number of options (in shares) | shares | 85 |
Options outstanding, Weighted-average remaining contractual life | 8 years |
Options outstanding, Weighted-average exercise price (in dollars per share) | $ 348.73 |
Options exercisable, Number of options (in shares) | shares | 22 |
Options exercisable, Weighted-average remaining contractual life | 8 years |
Options exercisable, Weighted-average exercise price (in dollars per share) | $ 348.73 |
$57.42 - $348.73 | |
Information related to options outstanding and options exercisable based on ranges of exercise prices | |
Range of Exercise Prices, lower range limit (in dollars per share) | 57.42 |
Range of Exercise Prices, upper range limit (in dollars per share) | $ 348.73 |
Options outstanding, Number of options (in shares) | shares | 671 |
Options outstanding, Weighted-average remaining contractual life | 7 years |
Options outstanding, Weighted-average exercise price (in dollars per share) | $ 208.47 |
Options exercisable, Number of options (in shares) | shares | 236 |
Options exercisable, Weighted-average remaining contractual life | 5 years |
Options exercisable, Weighted-average exercise price (in dollars per share) | $ 209.03 |
Stock-based compensation - Rest
Stock-based compensation - Restricted Stock Units (Details) - Restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Restricted stock units | |||
Unrecognized compensation cost | $ 26,267 | ||
Weighted-average recognition period of unrecognized compensation expense | 1 year 6 months | ||
Number of shares | |||
Beginning of year (in shares) | 159 | 168 | 134 |
Granted (in shares) | 163 | 53 | 97 |
Vested (in shares) | (38) | (46) | (52) |
Forfeited (in shares) | (31) | (16) | (11) |
End of year (in shares) | 253 | 159 | 168 |
Expected to vest (in shares) | 234 | 147 | 154 |
Weighted average grant date fair value | |||
Beginning of year (in dollars per share) | $ 259.21 | $ 220.68 | $ 207.70 |
Granted (in dollars per share) | 179.72 | 335.28 | 208.82 |
Vested (in dollars per share) | 276.51 | 207.77 | 164.35 |
Forfeited (in dollars per share) | 218.40 | 259.65 | 227.44 |
End of year (in dollars per share) | 210.46 | 259.21 | 220.68 |
Expected to vest (in dollars per share) | $ 210.46 | $ 259.21 | $ 220.68 |
Certain employees | |||
Restricted stock units | |||
Vesting period | 3 years | ||
Board of Directors | |||
Restricted stock units | |||
Vesting period | 1 year |
Stock-based compensation - Perf
Stock-based compensation - Performance-based Restricted Stock Units (Details) - Performance-based restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Performance-based restricted stock units | |||
Vesting period | 3 years | ||
Unrecognized compensation cost | $ 183 | ||
Weighted-average recognition period of unrecognized compensation expense | 1 year | ||
Number of shares | |||
Beginning of year (in shares) | 62 | 94 | 78 |
Granted (in shares) | 21 | 33 | |
Change in performance award payout (in shares) | (5) | (3) | 22 |
Vested (in shares) | (14) | (43) | (36) |
Forfeited (in shares) | (6) | (7) | (3) |
End of year (in shares) | 37 | 62 | 94 |
Expected to vest (in shares) | 35 | 57 | 87 |
Weighted average grant date fair value | |||
Beginning of year (in dollars per share) | $ 267.60 | $ 214.64 | $ 196.81 |
Granted (in dollars per share) | 348.73 | 204.27 | |
Change in performance award payout (in dollars per share) | 204.27 | 281.53 | 191.76 |
Vested (in dollars per share) | 281.53 | 191.76 | 151.20 |
Forfeited (in dollars per share) | 263.38 | 258.80 | 224.49 |
End of year (in dollars per share) | 271.88 | 267.60 | 214.64 |
Expected to vest (in dollars per share) | $ 271.88 | $ 267.60 | $ 214.64 |
Maximum | |||
Number of shares | |||
Expected to vest (in shares) | 55 |
Net income per common share - R
Net income per common share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Numerator: | |||||||||||
Net income | $ 171,494 | $ 74,798 | $ 8,052 | $ (78,509) | $ 222,719 | $ 129,747 | $ 161,258 | $ 192,221 | $ 175,835 | $ 705,945 | $ 658,559 |
Net income - basic | $ 175,835 | $ 705,945 | $ 658,559 | ||||||||
Denominator: | |||||||||||
Weighted-average common shares - Basic | 56,351 | 57,840 | 59,864 | ||||||||
Dilutive effect of stock options and non-vested stock | 207 | 265 | 317 | ||||||||
Weighted-average common shares - Diluted | 56,558 | 58,105 | 60,181 | ||||||||
Net income per common share: | |||||||||||
Basic | $ 3.04 | $ 1.33 | $ 0.14 | $ (1.39) | $ 3.91 | $ 2.25 | $ 2.77 | $ 3.28 | $ 3.12 | $ 12.21 | $ 11 |
Diluted | $ 3.03 | $ 1.32 | $ 0.14 | $ (1.39) | $ 3.89 | $ 2.25 | $ 2.76 | $ 3.26 | $ 3.11 | $ 12.15 | $ 10.94 |
Net income per common share - A
Net income per common share - Anti-dilutive Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Net income per common share | |||
Employee stock options and restricted stock units excluded from the computation of net income per common share | 211 | 298 | 302 |
Employee benefit plans (Details
Employee benefit plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Defined contribution plans | |||
Total expense recorded | $ 16,878 | $ 16,556 | $ 10,029 |
Deferred compensation liability | 32,909 | 29,442 | |
Deferred compensation plan assets | $ 33,223 | $ 27,849 | |
Qualified defined contribution plan | |||
Defined contribution plans | |||
Company match (as a percent) | 100.00% | 100.00% | 100.00% |
Eligible employee compensation for company match (as a percent) | 3.00% | 3.00% | 3.00% |
Company match on additional employee contributions (as a percent) | 50.00% | 50.00% | |
Eligible additional employee contribution to receive additional company match (as a percent) | 2.00% | 2.00% | |
Non-qualified deferred compensation plan | |||
Defined contribution plans | |||
Company match (as a percent) | 100.00% | 100.00% | 100.00% |
Eligible employee compensation for company match (as a percent) | 3.00% | 3.00% | 3.00% |
Selected quarterly financial _3
Selected quarterly financial data (unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Selected quarterly financial data (unaudited) | |||||||||||
Fiscal period | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 364 days | 364 days | 364 days |
Net sales | $ 2,198,701 | $ 1,552,033 | $ 1,228,009 | $ 1,173,210 | $ 2,305,918 | $ 1,682,514 | $ 1,666,607 | $ 1,743,029 | $ 6,151,953 | $ 7,398,068 | $ 6,716,615 |
Cost of sales | 1,427,673 | 1,006,514 | 899,002 | 869,605 | 1,499,033 | 1,059,081 | 1,060,708 | 1,098,182 | 4,202,794 | 4,717,004 | 4,307,304 |
Gross profit | 771,028 | 545,519 | 329,007 | 303,605 | 806,885 | 623,433 | 605,899 | 644,847 | 1,949,159 | 2,681,064 | 2,409,311 |
Selling, general and administrative expenses | 514,140 | 416,378 | 271,587 | 380,912 | 515,542 | 449,198 | 392,843 | 403,133 | 1,583,017 | 1,760,716 | 1,535,464 |
Impairment, restructuring and other costs | 30,398 | 23,624 | 40,758 | 19,542 | 114,322 | ||||||
Pre-opening expenses | 2,218 | 4,240 | 3,907 | 4,635 | 3,587 | 6,455 | 5,038 | 4,174 | 15,000 | 19,254 | 19,767 |
Operating income | 224,272 | 101,277 | 12,755 | (101,484) | 287,756 | 167,780 | 208,018 | 237,540 | 236,820 | 901,094 | 854,080 |
Interest expense (income), net | 463 | 1,383 | 2,617 | 1,272 | (439) | (900) | (1,671) | (2,046) | 5,735 | (5,056) | (5,061) |
Income before income taxes | 223,809 | 99,894 | 10,138 | (102,756) | 288,195 | 168,680 | 209,689 | 239,586 | 231,085 | 906,150 | 859,141 |
Income tax expense | 52,315 | 25,096 | 2,086 | (24,247) | 65,476 | 38,933 | 48,431 | 47,365 | 55,250 | 200,205 | 200,582 |
Net income | $ 171,494 | $ 74,798 | $ 8,052 | $ (78,509) | $ 222,719 | $ 129,747 | $ 161,258 | $ 192,221 | $ 175,835 | $ 705,945 | $ 658,559 |
Net income per common share: | |||||||||||
Basic | $ 3.04 | $ 1.33 | $ 0.14 | $ (1.39) | $ 3.91 | $ 2.25 | $ 2.77 | $ 3.28 | $ 3.12 | $ 12.21 | $ 11 |
Diluted | $ 3.03 | $ 1.32 | $ 0.14 | $ (1.39) | $ 3.89 | $ 2.25 | $ 2.76 | $ 3.26 | $ 3.11 | $ 12.15 | $ 10.94 |
Share repurchase program (Detai
Share repurchase program (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Mar. 12, 2020 | Mar. 14, 2019 | Mar. 15, 2018 | |
Share repurchase program | ||||||
Common stock repurchased and retired | $ 114,895 | $ 680,979 | $ 616,194 | |||
2017 Share Repurchase Program | ||||||
Share repurchase program | ||||||
Remaining authorized amount from earlier share repurchase program | $ 41,317 | |||||
2018 Share Repurchase Program | ||||||
Share repurchase program | ||||||
Authorized amount of share repurchase program | $ 625,000 | |||||
Remaining authorized amount from earlier share repurchase program | $ 25,435 | |||||
2019 Share Repurchase Program | ||||||
Share repurchase program | ||||||
Authorized amount of share repurchase program | $ 875,000 | |||||
Remaining authorized amount from earlier share repurchase program | $ 177,805 | |||||
2020 Share Repurchase Program | ||||||
Share repurchase program | ||||||
Authorized amount of share repurchase program | $ 1,600,000 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Balance at beginning of period | $ 1,363 | $ 651 | $ 1,371 |
Charged to costs and expenses | 22 | 1,094 | 573 |
Deductions | (617) | (382) | (1,293) |
Balance at end of period | 768 | 1,363 | 651 |
Inventory reserve | |||
Valuation and Qualifying Accounts | |||
Balance at beginning of period | 46,941 | 36,640 | 24,804 |
Charged to costs and expenses | 42,634 | 50,285 | 47,923 |
Deductions | (36,715) | (39,984) | (36,087) |
Balance at end of period | $ 52,860 | $ 46,941 | $ 36,640 |