Ulta Beauty, Inc. Segments Disclosure
18. Segment reporting
The Company operates specialty beauty retail stores in the United States selling cosmetics, fragrance, skincare products, haircare products, wellness products, and services. Nearly every store features a full-service salon. The Company has one operating segment and one reportable segment, both of which include retail stores, salon services, and e-commerce.
The Company’s President and Chief Executive Officer operates as the chief operating decision maker (“CODM”) and evaluates performance based on net income that is reported on the consolidated statements of income. The measure of segment assets is reported on the consolidated balance sheets as total assets. The Company’s net sales are generated within the United States and its long-lived assets are located primarily in the United States.
The CODM considers both budget-to-actual and forecast-to-actual variances on a monthly basis for profit measures when assessing performance and making decisions about allocating capital and resources. The CODM also uses net income in competitive analysis by benchmarking to competitors. The competitive analysis along with the monitoring of the financial results are used in assessing performance of the reportable segment and in establishing compensation.
Within the reportable segment, there are significant expense categories regularly provided to the CODM and included in the measure of the segment’s net income as shown below:
Fiscal year ended | |||||||||
February 1, | February 3, | January 28, | |||||||
(In thousands, except per share data) | 2025 |
| 2024 |
| 2023 | ||||
Net sales | $ | 11,295,654 | $ | 11,207,303 | $ | 10,208,580 | |||
Less: | |||||||||
Cost of sales (1) | 6,908,401 | 6,826,203 | 6,164,070 | ||||||
Associate expenses (2) | 1,459,231 | 1,391,175 | 1,264,139 | ||||||
Advertising expense, net (3) | 431,455 | 422,779 | 374,730 | ||||||
Pre-opening expenses | 13,689 | 8,510 | 10,601 | ||||||
Other segment expenses (1) (4) | 917,906 | 880,607 | 756,430 | ||||||
Interest income, net | (15,094) | (17,622) | (4,934) | ||||||
Income tax expense | 378,948 | 404,646 | 401,136 | ||||||
Net income | $ | 1,201,118 | $ | 1,291,005 | $ | 1,242,408 | |||
| (1) | Included within cost of sales and other segment expenses is depreciation and amortization expense of $267,042, $243,840, and $241,372 is fiscal years 2024, 2023, and 2022, respectively, as described in Note 2, “Summary of significant accounting policies.” |
| (2) | Associate expenses include salaries, wages, bonus, and other forms of compensation related to associates as described in Note 2, “Summary of significant accounting policies.” |
| (3) | Advertising expense, net consists of print, digital and social media, and television and radio advertising, net of vendor income that is a reimbursement of specific, incremental, and identifiable costs as described in Note 2, “Summary of significant accounting policies.” |
| (4) | Other segment expenses include other corporate overhead and store operating expenses within SG&A expenses as described in Note 2, “Summary of significant accounting policies.” |
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About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.