Ulta Beauty, Inc. Revenue Disclosure
3. Revenue
Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue. Other revenue includes the private label and co-branded credit card programs, royalties derived from the partnership with Target Corporation, and deferred revenue related to the loyalty program and gift card breakage.
Disaggregated revenue
The following table sets forth the approximate percentage of net sales by primary category:
Fiscal year ended | ||||||
February 1, | February 3, | January 28, | ||||
(Percentage of net sales) | 2025 | 2024 | 2023 | |||
Cosmetics | 39% |
| 41% |
| 42% | |
Skincare | 23% | 22% | 20% | |||
Haircare | 19% | 20% | 22% | |||
Fragrance | 13% | 11% | 11% | |||
Services | 4% | 4% | 3% | |||
Other | 2% | 2% | 2% | |||
100% | 100% | 100% | ||||
Certain sales departments were reclassified between categories in the prior year to conform to current year presentation, including moving the bath category from Fragrance to Skincare.
Deferred revenue
Deferred revenue primarily represents contract liabilities for the obligation to transfer additional goods or services to a guest for which the Company has received consideration, such as unredeemed Ulta Beauty Rewards loyalty points and unredeemed Ulta Beauty gift cards. In addition, breakage on gift cards is recognized proportionately as redemption occurs.
The following table provides a summary of the changes included in deferred revenue during fiscal 2024 and 2023:
Fiscal year ended | ||||||
February 1, | February 3, | |||||
(In thousands) | 2025 |
| 2024 | |||
Beginning balance | $ | 428,788 | $ | 388,583 | ||
Additions to contract liabilities (1) | 362,563 | 332,369 | ||||
Deductions to contract liabilities (2) | (298,444) | (292,164) | ||||
Ending balance | $ | 492,907 | $ | 428,788 | ||
| (1) | Loyalty points and gift cards issued in the current period but not redeemed or expired. |
| (2) | Revenue recognized in the current period related to the beginning liability. |
Other amounts included in deferred revenue were $7,678 and $7,803 at February 1, 2025 and February 3, 2024, respectively.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2025 | Showing above |
| 2024 | Mar 26, 2024 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.