ULTA Ulta Beauty

Kiley Rawlins Vice President, Investor Relations
Mary Dillon Chief Executive Officer
Dave Kimbell President
Scott Settersten Chief Financial Officer
Kate McShane Goldman Sachs
Christopher Horvers JPMorgan
Omar Saad Evercore ISI
Dana Telsey Telsey Advisory Group
Kelly Crago Citi Research
Simeon Gutman Morgan Stanley
Steph Wissink Jefferies
Michael Lasser UBS
Paul Trussell Deutsche Bank
Michael Binetti Credit Suisse
Steve Forbes Guggenheim Securities
Ike Boruchow Wells Fargo
Call transcript
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Greetings, and welcome to the Ulta Beauty Fourth Quarter 2020 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Kiley Rawlins, Vice President, Investor Relations. Please proceed.

Kiley Rawlins

good and Laura, you, afternoon, everyone. Thank

on Executive Officer; me Kimbell, the Officer; call Chief Dillon, President. Mary are Scott Dave today and Joining Settersten, Financial Chief

this remind begin, XXXX. may facts, Actual Act differ the to within may that like Private we statements deemed which materially to future forward-looking meaning Before statements not results I'd be on from of the conference constitute historical Securities call, are Reform risks caution statements and described reliance you such projected those of to which due as today, statements, which filings number of speak place forward-looking all to are of uncertainties, in March in with a of the you undue company's XXXX. the XX, these only SEC. on Litigation We not

found obligation in which discuss Investor our adjusted as release, operating revise no our non-GAAP of reconciliation the A at of adjusted operations earnings income, including these have to forward-looking measures can to stores XX other you not and EPS, our our credits. as for the or other for website compensation will and our update by be GAAP is fiscal tax associated of adjusting XXXX stock permanent required closure restructuring so. our expect to both Canada – section as by with measures, presented we the corresponding of available the certain store except which do Relations comments, decision income adjusting suspend costs, in into on should to ongoing us and law, costs and financial expansion XXXX well adjusted XXXX and and to today's measures charges, view statements, results In reflect We diluted have impairment net been

will we for prepared the team, call from leadership our questions. Following open remarks

be available prepared the to follow-up Time. for Central our will will As IR the have today [Operator after always, Instructions] longer plan than we call. questions end you our usual, at team As be remarks call X:XX any

Now I'd like to turn the Mary? call to Mary. over

Mary Dillon

the and our am I'll our announced good that with quarter and will from will review plans and outlook. we plans Kiley, of results results. about our will financial today for start and afternoon, comments the year June, Starting priorities become you, very I with will CEO Beauty, afternoon. Ulta Dave succession our full XXXX, to I of transition Dave this Thank transition Kimbell Then and everyone. the in announce Scott and Executive discuss then share fourth to Board. highlights leadership Chair excited

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industry. and We've momentum, team and a talented, we strength growth. next has values-based, strong and XX-plus drive over developed phase diverse, have culture. good We're to guest-centric, emerging a experienced leaders our again differentiated the Beauty a beauty leader as model throughout of position the and history and from business foundation and XXXX our high-performance pandemic of with have operational proven We sustained a in its over a world-class, that year Ulta

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team quarter our for about delivered talk The Beauty fourth better-than-expected let's Now, results the Ulta fourth quarter. performance.

trends share. For Strong in topline quarter we kicked the resulted metrics, share. of trends anticipated combined in the per extended GAAP the Joy consumer $X.XX enterprise-wide EPS profitability. the across We and diluted targeted and momentum to store Adjusted compared channels sales $X.X November in resulting and all sales, marketing, plans, COVID categories, experienced and diluted X. We improving activity Black improvement the $X.XX in a quarter comp multichannel of multiple disruption decline X% X.X%, less third sales season an net were the in improved all including See Friday for our than quarter. execution an transactions, holiday decline off and the demand, quarter, was from our was and in across EPS with billion with early campaign, event. per promotional

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are on increased DC operating but job, store in business level capacity still more place, an hours and in excellent did e-commerce teams demand. in-store than our record and With double-digit of Our fulfillment we're reduced increased place, we Limitations supporting store low XX%. strategic capacity seeing share skincare our prestige From a the continue Starting categories, delivered categories. by increase we're encouraged across our with in major to a one momentum growth comp. market traffic. category most perspective, beauty e-commerce of

like established engagement and delivered brands like In Beauty. and profit brands addition a changes delivered to newness and First the as broader negatively planned Ordinary and like social from to Skin engagement. and double-digit in Event, strong base our also and newness as trends, in Comp haircare CeraVe trends, Aid driving Rx, Fragrance media impacted self-care Bath slightly interest Love and in well continued top-line are Dior. significant self-care by primarily were benefit driven platforms fragrance delivered down and which Chanel to comp -- but wellness improvement. quarter, Urban growth growth bath media and reflecting business Jumbo strong social The brands newness sales newer from

and sales Prestige black-owned January, hair improved continued we in in limitations comp quarter, clean care, color, for were color negative, and newness all sales a positive driven wearing hair mass focus. types less the wearing in online. brand Briogeo, formulated hair care for in hair stores occasions. continues Comp and innovation. to event, were makeup all on And the of the Excluding category launched product be texture by the sequentially, year-over-year reflecting area category and an but makeup

as and XX% engage the quarter well new with from business a While be in do Beauty Sales see average Mercier, transactions, our new like brands guests launches down established NYX, in continued we limited, Too including to from KVD brands, Faced than decline higher. due more newness were to while eager and ticket to were as services fourth Hourglass. Laura

restrictions, Our thresholds. services to see capacity and we're impacted COVID local markets capacity but business related local constraints adversely increase starting remains some by

XX.X members, diamond of strong platinum last retention year, the maintained ended our ongoing anticipated we While XX% levels given high-value members closures challenges. we and was store million fiscal store members. XXXX in total reduction and loyalty in traffic year The with earlier about than fewer

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members to online-only XX% mix While to nearly members. grew and two-thirds our our to members XX% members of omni-channel of this year, shoppers of in-store-only our doubled be of members, continue

are a tangible While Scott of of areas highlight want I you few two details will the for our in focus that profitability. minutes, P&L take results delivering the to through

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we a merchandise meaningful As efforts, these improvement result margin. our in delivered of

and steps our thoughtful After $XX structure. quarter XXX Second, million. work roles, cost in charge we corporate evaluation of and approximately resulting a function, a we approximately continued thorough to of take eliminated reset capabilities quarter, across every to in the this

certain difficult new a areas introduced key we and decisions as to roles some our expanded strategic also roles, made priorities. investment number teams, to eliminate in select we Even of reorganized positions aligned

savings enterprise SG&A Ulta the the Beauty sales combined diluted were of EPS XXXX. million $XX $X.XX approximately I'm And year. but These these were $X.X difficult, for process. now the investments in in EPS result proud decisions to and From in the respect, diluted Adjusted of per to for capabilities, into planned and will store enhance a per short and compassion financial full decisions our perspective, these care I'm position was expect XX.X%; billion; changes, was GAAP will We incredibly went share. total decreased that with share. comp continued the long-term. sales success turning $X.XX year confident

to our our six and each not of and unprecedented on align operating for challenges, share progress extend commitment dynamic appreciation am very and to to made want each was these flexibility, to our of and market and strategic originally advantages. I we proud our planned, the fiscal priorities my unwavering team in environment XXXX. to a quickly teams Beauty the responded my associates moved express and agility We intended Facing their XXXX XXXX, priorities Ulta expand I in other. year sincere to all to While adjusted leadership meaningful across guests competitive we how early

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While these of always we're true Diversity inclusion early selves. inclusion. to we journey, am can proud been made important diversity to in Beauty, they our associates as the at and their all progress Ulta particularly authentic we've areas, relates as and want be I in feel have it

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in Our purposefully a introduce Dave and now deeply XXXX beauty. across will but share with underrepresented for committed And team about made is fiscal plans I'd grow post-COVID leading we've priorities Dave? well a progress lead and retail us for like to to difficult XXXX. positions who the more was and and to our environment. year, voices Kimbell, Fiscal

Dave Kimbell

Thanks, Mary.

your your to XXXX, thank for priorities I mentorship. Mary, exceptional Ulta our of personally, for world-class Beauty, and discuss for you, leadership I want and Before

has associates an place want company as in continued next to and look I opportunity and become June. guidance beauty workplace, associates. grown for beloved Your as Beauty's opportunities their many to Board for for on career forward become outstanding new Directors to and role the your to leadership, welcoming you CEO and our Ulta partners I a tremendous. guests sincere and alongside grateful ongoing your Under of years Ulta known accessible of my a to for destination, all to support has worked have appreciation for Beauty support. express been to impact my offering our also transition I'm inclusive to our and

business we In is and with experiences excited lives. strong promotion am her opportunity play guests Kecia and Officer. to congratulations addition, for next guests' discovery leading humbled the lead I Beauty vibrant destination Chief by forward its am leading Kecia service on I and our and meaningful I growth. and the the passionate our associates, category, well-deserved the to executive of Operating in to about through industry shareholders. Beauty and have experienced the role and Beauty want our of Ulta offer dynamic to phase diverse I beauty to and look our a organization beauty Ulta our team in built, the the human we such in

said unwavering a the Mary earlier, guests. XXXX our serving focus agility, met challenges As creativity difficult teams an on with year, and but fiscal was our

result, XXXX As growth from accelerate we how experience begin guests a which our shape a post-COVID we strong environment. with can beauty in and foundation the

As expanding strategic the growth gains are in to and normal, focused opportunities on our new competitive our extending X market think advantages. we continue priorities share we about

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stores new guests create and advancement digital on accelerate marketing, forward look refresh more e-commerce personalized year, all on this to fleet, journey our elevated plan through our to a for our store loyalty our experience expand net and XX As platforms, opening to business XXXX, to strategies, to we November teams our our approximately engagement our successfully to continue Ulta continue including to to we bring new our supply supporting open progress to while Beauty continue our enable about in pillar omnichannel our evolve and more Target, as our flexibility, announcement with make chain strategy, partnership omni-channel life. Since newest the Target. also at the vision further

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drive holistic and face optimization. including headwinds pressure wage we cost Like macro from priority cost, Our fifth ongoing others, to transportation costs. is

to reduce adjust Building that chain, for future we investing steps operating We on while actively also organization are will these capabilities in to continue occupancy drive also XXXX, our and and new will and navigating also fiscal reshape efforts, ways growth. category costs. while optimization In took we in our structure, shifts. merchandising pursue supply opportunities and cost process to channel looking

Importantly, will growth. priorities to drive of some these support invest to of we continue in our savings strategic

is priority. and strengthen Our develop is final to priority our new culture. talent our a This not

culture associates know in empathy, Beauty and to incredibly the respect, that and talent focus XXXX am and always our our brand led bring guests. we teams are Our I courage. life of Ulta our proud through with how for

work Looking they to create regardless of is served continue we fully optimally XXXX, can will to to an environment contribute, differences. where deals every associate every guest and

will excited and to our and enhance inclusion We and expand and closing, development our Ulta future optimistic efforts. associates training am continue diversity our inspire of the In empower will magnify about Beauty. we and and I to

Our strong business momentum place. foundation good a XXXX and is with emerging from in

profitable leading growth. and We Scott, the market a to going driving guests, and share capturing I continued outlook each of and call financial fiscal beauty while will care our the now, to other I'll Scott? results discussion confident our am positioned XXXX. are and the to And creativity, for for our forward, over industry, passion thrive continue turn for quarter's team lead with and

Scott Settersten

Thanks, good Dave, afternoon, and everyone.

of outlook team entire a our upcoming moment his congratulate and results take CEO. provide financial executive associates Dave year, for of all and the behalf wanted just to the appointment I on as our review I our to Before next our on

lead he of to already as Beauty in this ability career Ulta utmost next Dave growth. through for confidence the its successful have step his takes his next and are phase in We excited

company beginning the Net X.X%. for income comp the and total X.X%, Now, with declined sales quarter statement. declined

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As we have nice seen experienced in both recent conversion channels. quarters, we in

as be to fewer stores, softer operating by compared to last as and continue well traffic to hours year. capacity limitations impacted We

encouraged sequential quarter. improvement by store in the the However, traffic fourth during we are

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and marketing lower store by lower resume continue expenses although headwinds earlier million digital the as close print to softer million social in XX store higher were to expense, we by decision the and taken improved The the lease costs, occupancy to strengthen in experienced stores. experienced benefits, decrease due the and These sales, permanently store drivers as we in and variable lower to given and preparation XXXX. deleverage fixed SG&A $XXX.X decreased prioritize year from we negotiation and what for the real traffic. of better We the season. partially fourth costs quarter our trend our invest $XXX.X payroll to to our also largest actions to in estate of offset adjusted and compared efforts holiday channels, portfolio including team sales of advertising and reduce reductions expenses were

million We overhead, offset by quarter. corporate our about multiple partially financial also COVID-related compensation, spending our We internal experienced during $XX reduced an increase in in across expenses versus to the PPE and incentive areas. performance higher targets, primarily due reflecting incurred

This Last severance. the planned teams recorded down for charges million $XX.X effort long-lived asset to quarter. termination quarter, related a and other of and impairment fourth a This restructuring the costs. lease wind Canada, and completed during million our quarter, charge we impairment, charge costs, our suspended to we resulted in $XX.X expansion

We stores. and income Adjusted $X.XX long-lived XX.X% ago. million termination $X.X to or compared announced severance to management was million million, of to related in for of and adjusted GAAP million charges the was to and associated changes $X.XX made quarter, costs recorded due diluted operating with share also the earnings $X.XX operating a operating assets lease compared million $XXX.X $XX a tangible earnings associated share -- lease corporate impairment assets XX to $X.XX year's $X.X year per closure with our the previously stores permanent was $XXX.X organization. in to year field last fourth Diluted certain sales. compared income GAAP to of decreased ago. per $XXX.X million

compared cash inventory. to we last inventory balance year, X.X% adjusted manage Moving to on sheet maintain and flexibility to flow. as Total purchasing the decreased and

IT, cash other. merchandise the stock $X for million including fixtures, XXX,XXX our of the shares for store cash fourth our For and and million confidence, resumed program repurchased approximately year with and stores, We billion in approximately quarter, million in we and and new stock. ended in supply $XX $XX Reflecting equivalents. we $XX buyback $XXX remodels for million invested chain maintenance the and year, capital expenditures, about

billion We authorization. repurchase have under current $X.X our remaining

our XXXX. for outlook to Turning

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Now, specifically XXXX. for

we for net relocate new stores remodel stores. approximately to quickly when pandemic last XX stores, most XX and new planned year, expect the We that, of open the approximately Note hit moved to defer XXXX. stores XX

half sales percentage to be our comp quarter. in the billion, $X.X anticipate in will XX than the for between and sales are billion new XX of planned more result, As with open stores the a range. first $X.X year net to We expected

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leverage headwind of channel the from anticipate an resulting shift we in brick-and-mortar and less year, For fixed costs. trend sales our operations, improving from

be in the are penetration to the We for year. mid-XXs low planning to e-commerce

also opportunities. We growth efficiency continue continue promotional will modestly, pursue as margin strategy to optimize merchandise for to our and we improve expect

We SG&A in as the $XX XXXX. from fiscal we expect CARES million store will the higher also Act driven by benefit deleverage, primarily payroll, anniversary

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including as structure. IT, be impact cost $XXX an made changes, the cost payroll share spend federal per sold, resurgence assumes to the to salon $XXX stores, and XXXX of The the any relative for These range for in million flat supply chain a payroll, see consistent would we million a which lower of last increase anticipate advertising relatively in that, $X.XX and retail including SG&A in percent federal a in in store $XX As retail included for rate deleverage payroll, minimum offset result by of other. million year. is diluted to in reduction million we $XXX share, of part for reset tax remodels per related sales. and XXXX and changes We for corporate result these new of guidance of will should I increases partially of is and reflecting merchandise million note $XX will year our material goods which earnings our corporate in a for and the does between of to million assumptions and a COVID-XX. about approximately repurchases. plan approximately $X.XX CapEx, fixtures, guidance $XXX overhead, We share and to assumptions of in no impact include for maintenance wage not

this outlook. to conference of and an questions, to Q&A details your the and now, back take share plan I'll session. over the to operator analyst longer-term that logistical our announce the we share later investor to to Before call plans moderate we fall, our summer. And turn want this I host We'll more


Thank question Sachs. with line you. Instructions] McShane comes first Kate [Operator of Our from the Goldman

with proceed question. may You your

Kate McShane

news wondered for my taking and for growth to role the for comp could afternoon. care the around and XXXX. you the makeup? guidance on expect the congratulations, XX% you care is that XX% comment, all the centered I versus the Dave Good you comp of that how just to question. hair today. Mary Hi. driving or cadence Thanks for the skin and Thank extent My question guidance

Dave Kimbell

Yes. Kate. lot that and Great Yes, a question time spending of one we're on.

and in over As guests out stores engagement to course our both seeing the of the we by we we're continue channels, across encouraged the year, look that be from online.

we have certainly and have out lot -- to uncertainty continuing in There throughout we care, be fair And we makeup in throughout that's year. a through coming. look this excitement drive a feel in behaviours from we non-makeup signs really the the they innovation that and And been year, XXXX consumer of I'd over out in all certainly growth our is, And anticipate of The with be is continues care, makeup. skin and expectations. makeup. as us in that amount engagement of the at/or society about hair number we bath, built Our that of see we've long-term above our we new long-term will as while that of confidence growth. question fourth doing I – and fragrance, there research all for that is say and a and when for know and throughout things think know will And prepared -- from we comfortable, businesses strong and performing consumers anticipate and come? models, pent-up quarter participating guests celebrating going more will that engagement demand we're renewed the

though our virtual from even of our have a partners as towards our through with digital close whole seen But and – tools our communication, tools, coordination we then see our highlighting try-on signs sight seen it. with fully yet inventory haven't prepared partners, We makeup marketing it we've we innovation being on driving of grow. line with brand leveraging brand and

on that uncertainty bit a we're in been XXXX. before the by for and guidance ride confident but all because when, prepared it's is in of growth for and long-term So a even COVID that makeup, our reflected of

Kate McShane

Thank you.


JPMorgan. question next with the from Horvers Christopher comes Our line of

with proceed question, may your You

Christopher Horvers

evening. Good Thanks.

still young. Mary, you're so And

clearly in poised stock the own business of You to company lot the a here XXXX. and recover in is

you Thank is when thoughts at about early. June the you how any investors career on shouldn't next you. why of why Why this think a XXXX think I year thinking that now? further share the announcement thoughts leave look investors your a least you're your -- Can way? So, and And think on board? at beyond lot steps

Mary Dillon

this as the a I'm of a just you. has succession Listen, right that I'm time been me. the a governance I'm do. of Personally, and the in Executive we for year. while Well, be to terms this all for kind the Chris, for planning that I'll going compliment. with I teasing feel take is Board excited. planned that Chair

that well, out on of of to well. is as business the chapter ready as future foundation the very We're next CEO company. in close of of strategies staying very the excited the coming is I'm The importantly, about strong. Most So, the the growth strong. to XXXX Dave as take

new Ulta felt make to have also transition. a responsibilities that just Chief the like me to So, Beauty we're it natural Steelman Kecia excited of going about and confident, I'm to Officer. very very Operating excited. confident this I'm future as us is time and to

So, story all succession we excited about think told, with, up come really as about I a this a is seamless, it. and we're can

Christopher Horvers

think as I here the I for you a it's know time as personal another guess good any game you helpful. going I there think really retailer into transition mean, personal take a from view to beyond Ulta, you do also you're do about as executive, to you side, career this be still sort of in stay or thoughts question. would the your a

Mary Dillon

There is.

listen, for the focused to that really why Beauty that's June about that. see. and and I'm be Yes. Ulta I'm through year yet. I'll right Executive and many questions. And CEO the now the I'm excited No, Executive be So, to going have the I excited very next Chair. a on Chair I'm for plans but don't after the chapter, -- we'll next any

Christopher Horvers

luck. much. Best very Understood. Thanks of

Mary Dillon

Thank you.


comes the Our ISI. from line Omar next Saad Evercore question with of

question. proceed may your with You

Omar Saad

lot of I it's out curious expired I'd online replenish have you hasn't going be seeing makeup, of of expiration if But sell a year happen. used what is any around is what products add the a that you're or going question this this consumers be last dates back kind if closet, part -- but expiration would in store that will? question. throwing congratulations kind into the Thanks you seeing and on the and them, look for my Thanks. come when you're on makeup uncertainty just to their periods. starting I'd the taking of been and the kind to my given like be to start as I'd curious curious to everyone well. to specific recovery of

Dave Kimbell

cabinets Well, XXXX. with consumers will There's engage expired as first, disruption that about continue we styles fashions, throughout slower point refreshing haven't the issues and and engagement coming guests behaviors, engage happening your the XXXX, had certainly, -- that a there's will happened or that. evolve. stock, in like excited makeup, for pre-pandemic then the at how all about inventory to any But throughout looks, see been is, yes, anything don't and optimistic home how their products we or emergence. just makeup we our a will is renewal people in believe, sure their much We're been -- too the the we that -- behavior

excited we they a different makeup. uncertain, is the -- bit are our probably They categories. but into it's love They love enthusiasts with it. diving know earlier, we our years. coming. said the the beauty. last And -- because guests They see it are I As category challenged, love newness. for a reflection I feel been has that love engagement And timing couple about makeup of less beauty of think that We

replacing talked styles new out your newness, So, coming, tons is and that new, embracing there and that into you cleaning of looks about as stock, moves behavior which leaning with it then we'll exact see new forward.

total So of we think story. the will be part that

Omar Saad

everyone. Good luck Dave. Thanks

Dave Kimbell

Thanks Omar.


Our next Advisory the from question Telsey Group. with Dana comes Telsey of line

proceed with question. may your You

Dana Telsey

Good afternoon, next. Ulta, at on everyone. career wonderful comes Mary, a And and congratulations knows who what

Mary Dillon

Dana. you, Thank

Dana Telsey

congratulations And on to you Dave, new role the also. assuming

to do how on channel get go and how you. Thank we changes you improve had for and the forward about past? As opportunity margins happened Any in the digital margins that e-com and and the of into there? XXXX e-commerce you in think going you've think XXXX, that the digital

Dave Kimbell

that we're with for guests channel. entire in service to embrace with in demand. sure growth that The our has really experience. guests able we and unexpected XXXX years growth our thrilled was our team digital many strong tirelessly e-commerce make worked and, to our of been course, are Well, extraordinary And as

Ulta our dramatically. spend, long and So shows their salon short-term as not for of pay off in the total -- their but frequency increases participating and their engage loyalty to just in-stores total and for history Beauty, a in in-stores, and that aspects that multiple guests Beauty only online get we aspects, not but other our business, engagement will in Ulta time, sales,

we're that that confident so And pay will off.

in to and channels digital more overall, very outcome have engaged it so a our people And that is growth. our business driving for good

want activity of promotional as we're an are, to -- continue We optimize and have our we that there part business, very part that serve, of to And but entire on that? And of are to more give process focused color cost focused through how little costs Scott, margin and on the of business. course, on overall, a see so in pressures part to do that. an to approaching we're on; important positive try you Again, a business. and we the

Scott Settersten

just demonstrated seen promotional no. the which, very in experience the from of by we've of channel the the No, quarter some again, of -- optimization, nature benefits We've a that lot digital fourth the in there. shopping occurs

our side business. business, So both profitability of of also opportunity supply the chain improve to plenty there's of we on believe that the side, of the effectiveness channel on promotional but the

SFC end believe, but long-term. from the will the just strategy, continues strategy, So ship also to store will help, business customers scale grow, that our to rate over the drive we overall getting there as closer help improvement some

Dana Telsey

you. Thank


with of comes the Citi from Kelly next question Research. Crago line Our

question. You your with may proceed

Kelly Crago

talk it lower down to savings to my is consistent given is areas you little first can back Mary, to margin if the be you said first guess, here some about expect think XXXX Thanks. occupancy there. abatements drilling that merchandize line. going Mary, Hi, to just in the like and My question different the the margin, want occupancy chance couple think Could levels you promotional question for number that then rent or there a to of line year, rent the going F the reach could around merch be year. I throughout these the on. some And year got on focus F XXXX? of one, you about be missed. should in how forward? really I gross will of congratulations. XXXX? seems the pull you this Is we then margin A pretty margin. bit a you further gross on up I And that Dave, on

Scott Settersten


getting So back that margin and but question, lot of theme about overall XXXX, takes. again, a connected lot there's puts there's to to the a gross

change of provided gave lot not margin. it on back XXXX. moving, – of is If Part detail would is to a services you say, we our that. manager detail, of our initial geography a of the I to prepared outlook gross out remarks, on lot go back the get to the

a lower So to the for of compare – and sales we overall, sales up creates least when outlook bit – look plus XXXX. initial there there, is our that's but deleverage to something at us, try back there a

So list was mid-teens, of we in there the Again, is a channel going in as XXXX. thinking one sales. is mid-XXs it's we're e-commerce drivers mix XXXX And which a reminder, total laundry be XXXX quite to for is of things look percent a the biggest XXXX. at besides versus the when of

go takes the and to I upside. we puts there. of sales about lot comment mean, I a So, back made would

good good the So part optimistic. sales sales then feel exiting quarter. stronger, again, make-up leverage. we if And fourth helps some come especially there. – back and that in tailwinds business, there's our We are scale about potentially helps And the of drive

Kelly Crago

And on saw consistently the you then, of, in the weighted to it it. given half merchandise the first do year, just expect to is quarter of you margin is first up Got side be sort it pressures – some last throughout the or the it, year?

Scott Settersten


half think the then we're lapping the of a disruptions building first ago, I and little year over course of momentum be year. large a it'll throughout year, some the stronger because

course our a of the levers navigate of – with through a promotion have lot the and some of there's events. and as of cadence lot again, that to year we So push, major pull we

total the we as year. to looking the business So optimize throughout again, we're navigate

Kelly Crago

you. Thank it. Got


Stanley. next line Gutman the of with Our from comes question Simeon Morgan

You your may question. with proceed

Simeon Gutman

and to I defer a to I Day. Mary Analyst Hi, the everyone. that probably Good want think ask question you'll Dave. afternoon. Congratulations,

And of looks like that the question far levels. back is, it it not where chapter to And part guess, So Dave, going below next level XXXX. level of sales the is margin be looks is I growth somewhat in to your can XXXX go. SG&A your like

So of can to XXXX I get level margin? you back of guess, sales level what

Dave Kimbell

around And Well, that you're said manage We're – focused the and improve on growth improving we coming right. see about – – XXXX, that those overall that. as short-term just those for our that excited some Analyst have fall. given ahead see Day We'll the the we've on, of now optimistic and what Scott Scott that that growth, do has pressure talk overtime, you. at – guidance with a future share we're the seen disruptions. we to profitability lot that. through more we in we're we we And can plans described share see that continued We

much this we of our re-emergence in planning and now outlook have the year. detail as get sales right we'll more So, through We're timing business on driving our the the focused outlook, beyond XXXX. through the on in

Scott Settersten

couple And are and that the back I margins. and can mean, senior EBIT the would that we focused the of getting phone We're double-digit just leaderships that. the are this I course confident we're do of add all on over to that, -- talked last team executive we – about to calls, we've very

creates the by nature. plan what we're because we're there quarter you hopefully it within as crisis quicker, see But result can that is and again, overall look the sales of can bit in some fourth get and us think together, drive a initially, I and the little XXXX, at that's an hopefully, than for prudent of better it's confident put reasonable bit little Again, leverage distance. win striking of outlier, some a by the and we a here of the passes today. our sales fashion result and a planning in and level

Simeon Gutman

did dancing. Mary she keynote couple Shoptalk of when a years Dave, back, And for the came Yes. out

-- So

Dave Kimbell

I'll on that, work Yes. Simeon. Thanks.

Simeon Gutman

Take Yes. care.


Wissink comes Jefferies. line Steph of next with Our the question from

with proceed question. may You your

Steph Wissink

whole everyone. It's the you. is well on the a Dave, And add this our team. as afternoon, balance. changes in congratulations Good Thanks. I'll the to question for loyalty

period, or you. may about are And to that customers indication those you meaning is help any about program? you XX% customers if that hasn't Mary, a active those or think reduction loyalty define mentioned you with out that defined reengaging customers customers, you just program. within us in through, someone the a have you Can you function of of Thank have you lost? think so, how shopped is how think, I opted your within giving your that retaining have customers, that

Dave Kimbell


to is define got a has will been of time key one programs Of course, There's retail. future. and We success just to loyalty of for into world-class believe, a no the program our and think we engagement, in loyalty got our our We change we've The the high. incredibly loyalty we've all be well remains it program. how been best long guests.

to points last counted once of XX as is need definition to touch our the a member; at have shopped Our be least in you any in months.

early closed, a we changed. so that when next stores we seeing hasn't and the little lapping So year -- we'll months, our about this particularly few what -- a in for were is, start ago But as crisis really over that. are

with term. Our store-only guests -- less We've open the We We had They engaged bad pivot we engaged, big who know the of short experience they have for did not our a them. focus little to bit reengaging tenured behavior less the e-commerce just that beauty or in didn't that they business. know less that and out a of Ulta. are. shopped members in changed stepped lost either of retailers some some at a were

with lapping challenges this strong in had is of we're start were some XX to strong of the so in we the XXXX. as months months, And math, some we XXXX lap,

biggest work really, retention, Except or of so, most really one next have few there's parts these any guests, the done. in we've our suggests very most our maintained nothing our is, Ulta continue of in Beauty. And committed guests, to best-in-class over important our guests any connected less engaged in anything beauty engaged Beauty that months. through And Ulta and research to and that we'll that time, diamond and platinum are that that of over

focused, newness, really have our and team we great our love loyalty team our the the The is a through has do communication have evolution, that's broad done we guests. whole they everything for a scale assortment marketing, personalization, job. merchant So we

a are every ensuring great experience. stores focused guest that on Our gets

on. confident. those So a as but And positive. very through bit element a loyalty There's we're lapping long-term for we disruption, outlook going the is work short-term of

Steph Wissink

Thank you.


UBS. Lasser question the comes line of Michael next Our from with

with proceed question. may You your

Michael Lasser

a Thanks evening. everybody. and Good lot for my congratulations to question taking

As operating long-term in Ulta's e-commerce the fact XXXX mid-XX% to simply profit versus reflect in part conservatively be to range? help more does when be roles, provide as XX% transition with process, as succession will and high there as the XXXX the the guide flexibility won't range part ahead it's for their the or was penetration that folks being was in been year in of thought to to new a it the margin low for it

Mary Dillon

our we range some is this, what to to say the would that. happen ability guide best we going I think Well, to around of with

ahead, if under a you uncertainty any and look the still as would we into just on business. a encouraged So momentum of uncertainty at the of we not normally embedded our to and circumstances, about that due great transition. as outlook we've guidance, there's But optimistic we the feel deal some said,

into visibility category, As in the timing an which we of said, we exact our is still lack clear improvement makeup. largest

the pipeline, see -- is green excited So timing uncertain. the shoots some We we while but we're something it see I think about well. and Dave explained really

but leads think the we're also business investing takes, we both guidance the provided. that to recovery. managing future well, faster to ready quickly we So if of and with the costs, We puts doing I all that economic us even guidance. think the recovery the get But consumer in think this very of move things and it's terms We're achievable. is reasonable in

Michael Lasser

luck. good and you Thank


Our Bank. line Trussell from the comes next Paul question of with Deutsche

may with your proceed You question.

Paul Trussell

the Kecia, congratulations Mary, team. and well; and and Dave my afternoon also to Good as

the a On is household fan. muse this campaign,

long-term context and inquire of years and if Just can think how that outer in just growth XX-store kind One, this about door a wanted updates; reacceleration and put about potential year, the maybe openings in to few had what you've any you updates of Canada you are launches? as shop-in-shop similarly, then around conversations on partners with that the any Target expectations and just that? incorporate into for your just your vendor updates partnership that when And maybe further

Dave Kimbell


So really and muse. yes, we're our first is I'll listening the The On team of team thanks start I'm for have stores, glad The on proud of all they'll we -- hear to shout-out some that. of XX that all, sure be work. And have here. we X,XXX guidance we've that consistent the all changes to to no had That's that news no overtime to and and that. grow related to No year specifically we in on pause, related X,XXX with to can this remain as stores. stores update, that. -- Canada

and of and We this opening outlook the locations continue positive to optimistic to the find see continue just growth retail really XX -- physical country. we terrific us. The about we plenty about we'll ahead and across good of we're feel be really, of that year, we're

plan connected the So, in that's on Target ways our business. That's to stores.

to as new we life. together, definitely with along, standpoint, just a that make had we've on a from so of more is your -- mean really have I overall, to excited just in which this as this has So, engage that's just really the exceptional sure segment the it critical We that way really about from and time Target, this for and and coming is it's completely are really not in up hard of from worked think retail consumers. pumped same marketplace. the beauty just not. partnership. this see this we're then disruption concept the prestige we've about we question to the with we've feedback how They in building our consumers been pleased The we're with been our come to relationship really, thrilled

launch high the assortment, anticipating our tremendous earlier biggest closer. assure we the the are sharing in engagement, curated experience, what exceptional of ready completely Beauty that our the for today. We're can I new, compelling But and be best and get brand and beautiful as going over new than much this partners of staffing, to focused on we different, to brands. is in brand not I consumer that support and big, from sharing guest totally time. prestige, members more emerging and detail us, presentation, We'll be millions We're best on that So, have bit Ulta partners, you plans have, highly we're acquiring a shared script track. both small we

In fact, originally brands we're going launch more to considered. than we with

with and that excited We it. brands launch have we to more about the and we're this wanted

to going of but partnering with with experience. together We're So, beauty. chapter coming this create in next future an exceptional be partners we're go nothing Target. to just to excited to We awesome great. They’ve be build it's this thrilled been think it's the and


Michael Our with the next question Suisse. of from line comes Credit Binetti

may your with question. You proceed

Michael Binetti

call year us you'd XXX know that add Dave lot, partially dollars as understand we plan EBIT XXXX, it's of Scott. guess and a the to the the in Mary, think us you're working be Thanks a of role. I'm the what look described just first per around how But think look offsetting that closer I it like my at in and is we'll Dave, much I wondering maybe you new for have we let lot, and investment. guided I if Congrats my -- Hey. guidance like, to metrics margin. the some if the forward tailwinds on store, me to on you with guys the any one I investments will SG&A congrats. help looks you. miss you can of this But $XXX,XXX.

what curious, there you cosmetics seems the restrictive markets how like as markets beauty your that it thoughts the reopen? us or then, with up focus less And a So, describing lot have low seeing -- you in or of opened as to quickly, I'm are in just SG&A. the the more visibility start category the been that here Mary, as leading rest uncertain will indicators category you of leaves guide the on color is

Mary Dillon

it's across COVID. folks I know time makeup, And of say just have I under where a the just COVID. markets to material part. then, think We've seen there's with period wouldn't been with long everything and I Yes, makeup prior we've we even certainly a disruptions that's their it for a in changing category most we pressure been closely. routines. that are mean watching weather difference And been performance

are that. people of wearing we We're the that, it's sure social not large, very innovation has in know to for category and come when more newness makeup to engaged like start category. going makeup, and exactly people and are the so, just things occasions And lots

So we the know, skincare, self-care, a fragrance categories that aspect model so categories the have it across the many you performed, but of watching great closely, that business well. it's our bath exceptionally and as we're are

and will we to uptick, which well-balanced, poised advantage think we're So the of take we're come.

Scott Settersten

the And on question. of the part SG&A

guess, So in end XXXX we again, keep it of context time XX in XXXX, roughly XXXX. specific stores get to fleet that depends or what net store to you're there's XXXX. be trying XXXX the the it the I'll to measure new by compared against, I

other margin, through costs signage of a store. takes to So variable then that, element that it that fixed there's payroll all that and and operate on a there's runs cost and the stores natural variable gross piece of a cost right, for

top So that's is. initial that's embedded On weaker our is slightly a outlook there. line in what than XXXX

right, So element margin into The that's service of of a big out manager, it. SG&A. gross down re-categorization,

we've don't year. never That's investment, margin business. a -- shied SG&A help for margin gross I it's I our up in win it. we're recovery it's of on line, that. it. mean, it away part overall The at plus the we headwind overall. the operating So line, big on is mean, but but company is it's a the we're on is It a effective Makeup yes, a an more XXXX, looking because from how

part and there's will a IT will, guests a both innovate future Dave optimistic omni-channel great just able of We're uncertainty and for timing, And is there's key experience to back. but it the deliver just which, the in lot the on the As a a again, Mary growth the continuing and especially of when that of to come long-term all component being and for sure infrastructure, that's there's business. our continuing help big then it business. and we're said, that investments to space, to to a digital drive in question to make

Michael Binetti

a Scott. Thanks lot,


question comes Our of from Forbes with next Guggenheim line the Steve Securities.

You proceed question. may your with

Steve Forbes

me the Thank you, ad to for spend. I on extend well. outlook everyone. Maybe wanted and congratulations evening, let my good focus And as

all seems the to and right, trends, So, customer you there's And adoption, services member reopening reaccelerate about a very Maybe was those a opportunity just quick large like ahead two-part the drive drive maybe here. as think us. for then on year-over-year. here, opportunity XXXX. new you, us, of just mentioned if it right, expense tell to importantly, acquisition, of can, Scott, you for I more ratio maybe what flat

you're or opportunity, like it's spend, thinking -- terms just level vehicle? how So of on hear love be about hear or you're how ad more I'd just to not about this to acquisition higher overall whether in customer payback viewing reopening thoughts right, why aggressive, right, just

Scott Settersten


So maybe I can start there.

being space, the So into in flexible, the I say would looking the we at reallocated right, especially us, of Like we when results COVID were pulled just that. think, and area of was digital we're crisis again, XXXX significantly, resources print in back I on smartly,

the advertising large print So of efficiencies we for about growth, long-term. again, when bucket EFG, the talk is area the an over whole this -- is opportunity another us area for

print. thinking for better our to distribution ways so just look how long-term. market we over we print working partners the the ways about new also go – postage the on And to both continue vendor the and with to overall, to and optimize but of cost be print

sales. activities, parcel it's percent And be and would to a of of part say. thinking that's everyday again, I guess, year-over-year we're So going as I our flattish

progress. So – but always a work in

Dave Kimbell

yes, confident biggest our category return, seeing, reopening and the about particularly category. points just And what on the reiterate uncertain about the to we're but in reengaging the makeup. – in Yes. your in guest and in pace feel We

adjust. take Scott prepared whatever has at Mary becoming to the further as just said, guidance I our feel, – we being agility so increased but think, feel and right, skills also enhanced XXXX to as And prepared said, that is we at we we're have – We've us. comes

drive And industry feel and that and we've growth correct. given the but guidance we're to the like – lead is also so ready

Mary Dillon

So Lora, take have we for – I question. think more time one we’ll

Steve. Sorry,

Steve Forbes

you. Thank worries. No

Dave Kimbell

Thanks, Steve.


the with Ike from comes Wells Fargo. Boruchow question final Our of line

proceed may You with your question.

Ike Boruchow

as Thanks, well. Hi. everyone Congrats to everyone.

Just two quick ones.

would not you And embedded it store next – two year? productivity. $XXX you So that necessarily given half, to imply you where to e-com first decline seems color them normalizing about revenue, but to productivity on Anything on Can the Thanks, you or see maybe you a based years, that doing dollars e-com? talk guidance, pre-COVID. to us rise sales, what's on expecting Scott, store this full Dave in some guys. either mix. foot e-com point, year, over for – helpful. the I you're give of were year-over-year be three around back to the Can on kind maybe you think do half the to in Could

Dave Kimbell

are then in part so, getting increasingly us reengaged. and closely. e-com for said specifics We're general, we're as watching positive figure I any of that, in it, productivity, to that out know guests will too. physical they lot couldn’t really that know channel and seeing Having give and because we but committed we've back store we in play positive want down. settle things trends store Ulta a to demonstrating get On now guests Yes. remain a our are where I the got settle physical We telling bigger of about a think and and out way, Beauty beauty right

So we a talk big that'll imagine as for our a of longer-term it's kind a in sure. about be of fall outlook, part the but focus I discussion big

Scott Settersten

In now we'd the that store fact with been while. trends just the – I a is have share traffic exactly. to the investors. have would in mean, the negative I fall, to add that more trends Yes. on on the for

and how have consumers fits of XXXX how plays how to rebounds here And watch so and equation. the to that that omni-channel digital part as business – going out our into overall we're

team – size it yes, and making goes, them we we're And We're right the question ago out so sure scale shop we're in e-com mid-XXXX-ish on us that brick-and-mortar, apologizing in And as us. for the the advantage a was now up you're are and kind Ike, store we a guest that and again, the take with opportunities time. come presented customers business experience not based fleet, That is as to brand. to just teams of that XXXX. sure, focused on and that which, and the the take year guiding engaged back care just far great on delivering delivered the what to year, penetration continue keep ready, track of this for there we're are of As twice there. is the XXXX we're ready make

Ike Boruchow

Thanks guys.

Mary Dillon


done Thank with questions. I the think you. we're

just I really Beauty. is for to bright us The Ulta So future for thank joining everybody want today.

year have gains, next results. We're of of differentiated the leadership from lead continue business will growth for chapter shape time in market and Ulta with I'm further good year. all strategically job to that a the the for did excited We're Beauty amazing deliver report growth. this team and XXXX to Ulta have very Beauty momentum. I'm strong forward emerging We years It's for excited on right investing but to as proud and many look the tough us. we our with to confident about the you. the the again in about store, for for business we come. to pandemic of distribution chapter really Kecia right time to me all Thank opportunity. you our I'm drive growth remain for of first time May when next and center quarter Ulta long-term all continues model. and beauty strong the Beauty I associates and speaking We personally, ahead industry. share the drive the the Dave right corporate


conference. today's concludes This

the time. your of you lines your Enjoy disconnect may for Thank You rest day. this at your participation.