UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 7, 2011
ULTA SALON, COSMETICS & FRAGRANCE, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware	 	001-33764	 	36-3685240	
(State or Other
Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
1000 Remington Blvd., Suite 120
Bolingbrook, Illinois 60440
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code: ( 630) 410-4800
Not Applicable
(Former Name or Former Address, if Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

   

 
Item 2.02 Results of Operations and Financial Condition.
On June 7, 2011, Ulta Salon, Cosmetics & Fragrance, Inc. issued a press release regarding its financial results for the first quarter ended April 30, 2011. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information in this report, including the Exhibit attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
      (d) Exhibits
 	 	 	 	 	
Exhibit No.	 	Description	
99.1	 	 	Press release issued by Ulta Salon, Cosmetics & Fragrance, Inc. on June 7, 2011 announcing financial results for the first quarter ended April 30, 2011 furnished herewith.	

 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 	 	 	 	 	
 	ULTA SALON, COSMETICS & FRAGRANCE, INC.
 	 	
Date: June 7, 2011 	By:  	/s/ Robert S. Guttman  	 	
 	 	Robert S. Guttman 	 	
 	 	Senior Vice President, General Counsel
and Secretary 	 	

 
EXHIBIT INDEX
 	 	 	 	 	
Exhibit No.	 	Description	
99.1	 	 	Press release issued by Ulta Salon, Cosmetics & Fragrance, Inc. on June 7, 2011 announcing financial results for the first quarter ended April 30, 2011 furnished herewith.	

Exhibit 99.1

Company Contact:
Gregg Bodnar
Chief Financial Officer
(630) 410-4633

Investors/Media Contacts:
ICR, Inc.
Allison Malkin/Alecia Pulman
(203) 682-8225/(203) 682-8224
ULTA ANNOUNCES FIRST QUARTER 2011 RESULTS
First Quarter Total Sales Increase 20.6%
First Quarter Comparable Store Sales Increase 11.1%
First Quarter Diluted EPS of $0.37, a 60.9% Increase
          Bolingbrook, IL — June 7, 2011 — Ulta Salon, Cosmetics & Fragrance, Inc. [NASDAQ:ULTA], today announced financial results for the thirteen week period (“First Quarter”) ended April 30, 2011, which compares to the same period ended May 1, 2010.
For the First Quarter:

 	•	 	Net sales increased 20.6% to $386.0 million from $320.2 million in the first quarter of fiscal 2010;	
 		
 	•	 	Comparable store sales (sales for stores open at least 14 months) increased 11.1% compared to an increase of 10.8% in the first quarter of fiscal 2010;	
 		
 	•	 	Gross profit increased 230 basis points to 34.9% from 32.6% in the first quarter fiscal 2010;	
 		
 	•	 	Selling, general and administrative (SG&A) expense as a percentage of net sales decreased 70 basis points compared to the first quarter in fiscal 2010;	
 		
 	•	 	Operating income increased 67.4% to $39.1 million, or 10.1% of net sales, compared to $23.3 million, or 7.3% of net sales, in the first quarter of fiscal 2010;	
 		
 	•	 	Net income increased 70.5% to $23.3 million compared to $13.7 million in the first quarter of fiscal 2010;	
 		
 	•	 	Income per diluted share increased to $0.37 compared to $0.23 in the first quarter of fiscal 2010.	
“We had a terrific start to the year with total sales, comparable store sales and net income per share solidly ahead of our guidance, demonstrating the ongoing preference of our beauty experience and the continued success of our growth strategies,” stated Chuck Rubin, President and Chief

 

Executive Officer of Ulta. “Our first quarter results included net sales growth of 20.6% driven by an 11.1% increase in comparable store sales and the expansion of our store base. Operating income grew faster than sales climbing 67.4% from the first quarter last year to 10.1% of net sales. During the quarter, we gained market share advancing each of the priorities we set at the beginning of the year. To this end, we were pleased with our new store performance and remain on track to expand square footage by 16% this year. We generated consumer excitement and heightened interest in Ulta with newness across categories, brands and services. In addition, we saw robust growth in guest count in our Ulta stores and at ulta.com as we leveraged our active 8 million member loyalty base and delivered compelling social media, email and direct mail marketing campaigns. I am pleased with our positioning as we begin the second quarter and expect the continued implementation and strength of our strategies coupled with the focused execution of our team to result in a strong year of growth and significant accomplishments toward our long term goals.”
Balance Sheet and Cash Flow
          Merchandise inventories at the end of the first quarter totaled $255.5 million, compared to $228.1 million at the end of first quarter fiscal 2010, representing an increase of $27.4 million. The increase is primarily due to the addition of 47 net new stores opened since May 1, 2010. Inventory per store decreased 1.3% compared to the prior year reflecting the combined effects of inventory reduction initiatives coupled with inventory increases to support the 11.1% increase in comparable store sales.
          The Company did not utilize its credit facility during the three month period ended April 30, 2011.
Store Expansion
          During the first quarter, the Company opened 5 stores located in Davenport, IA; Keizer, OR; New Hartford, NY; Peabody, MA; and West Jordan, UT; relocated 1 store in Schaumburg, IL and remodeled 2 stores. The Company ended the first quarter with 394 stores and square footage of 4,153,420, which represents a 14% increase in square footage compared to the first quarter of fiscal 2010.
Outlook
          For the second quarter of fiscal 2011, the Company currently expects net sales in the range of $378 million to $384 million, compared to actual net sales of $321.8 million in the second quarter of fiscal 2010. This assumes comparable stores sales increase 6% to 8%, compared to a 10.8% increase last year, which would result in a two year comparable store sales increase of 16.8% to 18.8%.
          Income per diluted share for the second quarter of fiscal 2011 is estimated to be in the range of $0.31 to $0.33. The range includes approximately $0.02 per diluted share of additional costs associated with the opening of 19 new stores compared to 10 stores last year. This compares to income per diluted share for the second quarter fiscal 2010 of $0.22, which included a $0.03 per diluted share non-recurring compensation charge. Income per diluted share for second quarter fiscal 2010 was $0.25, excluding the non-recurring compensation charge.

 

For fiscal 2011, the Company continues to plan to:

 	•	 	Open approximately 61 new stores expanding square footage by approximately 16%, remodel 17 stores and relocate 1 store;	
 		
 	•	 	incur capital expenditures of approximately $130 million, compared to $97.1 million in fiscal 2010;	
 		
 	•	 	reduce inventory by approximately 1% to 3% on an average per store basis by year end 2011;	
 		
 	•	 	generate free cash flow.	
Conference Call Information
          A conference call to discuss first quarter results is scheduled for today, June 7, 2011, at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-9039 approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at http://ir.ulta.com and remain available for 90 days. A replay of this call will be available until 11:59 p.m. (ET) on June 14, 2011 and can be accessed by dialing (877) 870-5176 and entering account number 3055 and conference ID number 373316.
About Ulta
          Ulta is the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. Ulta provides affordable indulgence to its customers by combining the product breadth, value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer. Ulta offers a unique combination of over 21,000 prestige and mass beauty products across the categories of cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools, as well as salon haircare products. Ulta also offers a full-service salon in all of its stores. The Company currently operates 394 retail stores across 40 states and also distributes its products through the Company’s website: www.ulta.com.
Forward-Looking Statements
           This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “plans,” “estimates,” or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation: the impact of weakness in the economy;

 

changes in the overall level of consumer spending; changes in the wholesale cost of our products; the possibility that we may be unable to compete effectively in our highly competitive markets; the possibility that our continued opening of new stores could strain our resources and have a material adverse effect on our business and financial performance; the possibility that new store openings and existing locations may be impacted by developer or co-tenant issues; the possibility that the capacity of our distribution and order fulfillment infrastructure may not be adequate to support our recent growth and expected future growth plans; the possibility of material disruptions to our information systems; weather conditions that could negatively impact sales; and other risk factors detailed in our public filings with the Securities and Exchange Commission (the “SEC”), including risk factors contained in our Annual Report on Form 10-K for the year ended January 29, 2011. Our filings with the SEC are available at www.sec.gov. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

 
Exhibit 1
Ulta Salon, Cosmetics & Fragrance, Inc.
Statements of Income
(In thousands, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	13 Weeks Ended	 	 	13 Weeks Ended	 	
 	 	April 30,	 	 	May 1,	 	
 	 	2011	 	 	2010	 	
 	 	(Unaudited)	 	 	(Unaudited)	 	
Net sales	 	$	386,006	 	 	 	100.0	%	 	$	320,196	 	 	 	100.0	%	
Cost of sales	 	 	251,101	 	 	 	65.1	%	 	 	215,661	 	 	 	67.4	%	
 	 	 	 	 	 	 	
Gross profit	 	 	134,905	 	 	 	34.9	%	 	 	104,535	 	 	 	32.6	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expense	 	 	94,615	 	 	 	24.5	%	 	 	80,729	 	 	 	25.2	%	
Pre-opening expenses	 	 	1,230	 	 	 	0.3	%	 	 	474	 	 	 	0.1	%	
 	 	 	 	 	 	 	
Operating income	 	 	39,060	 	 	 	10.1	%	 	 	23,332	 	 	 	7.3	%	
Interest expense	 	 	173	 	 	 	0.0	%	 	 	118	 	 	 	0.0	%	
 	 	 	 	 	 	 	
Income before income taxes	 	 	38,887	 	 	 	10.1	%	 	 	23,214	 	 	 	7.2	%	
Income tax expense	 	 	15,591	 	 	 	4.0	%	 	 	9,553	 	 	 	3.0	%	
 	 	 	 	 	 	 	
Net income	 	$	23,296	 	 	 	6.0	%	 	$	13,661	 	 	 	4.3	%	

Net income per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	0.38	 	 	 	 	 	 	$	0.23	 	 	 	 	 	
Diluted	 	$	0.37	 	 	 	 	 	 	$	0.23	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	60,554	 	 	 	 	 	 	 	58,306	 	 	 	 	 	
Diluted	 	 	62,758	 	 	 	 	 	 	 	60,276	 	 	 	 	 	

 
Exhibit 2
Ulta Salon, Cosmetics & Fragrance, Inc.
Condensed Balance Sheets
(In thousands)
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	April 30,	 	 	January 29,	 	 	May 1,	 	
 	 	2011	 	 	2011	 	 	2010	 	
 	 	(Unaudited)	 	 	 	 	 	 	(Unaudited)	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	116,811	 	 	$	111,185	 	 	$	8,670	 	
Receivables, net	 	 	15,634	 	 	 	22,292	 	 	 	8,051	 	
Merchandise inventories, net	 	 	255,547	 	 	 	218,516	 	 	 	228,082	 	
Prepaid expenses and other current assets	 	 	32,513	 	 	 	32,790	 	 	 	29,134	 	
Prepaid income taxes	 	 	4,233	 	 	 	10,684	 	 	 	—	 	
Deferred income taxes	 	 	8,922	 	 	 	8,922	 	 	 	8,060	 	
 	 	 	
Total current assets	 	 	433,660	 	 	 	404,389	 	 	 	281,997	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Property and equipment, net	 	 	332,147	 	 	 	326,099	 	 	 	285,766	 	
 	 	 	
Total assets	 	$	765,807	 	 	$	730,488	 	 	$	567,763	 	

Liabilities and stockholders’ equity	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable	 	$	81,510	 	 	$	87,093	 	 	$	60,693	 	
Accrued liabilities	 	 	66,488	 	 	 	76,264	 	 	 	54,789	 	
Accrued income taxes	 	 	—	 	 	 	—	 	 	 	6,740	 	
 	 	 	
Total current liabilities	 	 	147,998	 	 	 	163,357	 	 	 	122,222	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Deferred rent	 	 	139,359	 	 	 	134,572	 	 	 	114,051	 	
Deferred income taxes	 	 	29,084	 	 	 	30,026	 	 	 	20,952	 	
 	 	 	
Total liabilities	 	 	316,441	 	 	 	327,955	 	 	 	257,225	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ equity	 	 	449,366	 	 	 	402,533	 	 	 	310,538	 	
 	 	 	
Total liabilities and stockholders’ equity	 	$	765,807	 	 	$	730,488	 	 	$	567,763	 	

 
Exhibit 3
Ulta Salon, Cosmetics & Fragrance, Inc.
Statements of Cash Flows
(In thousands)
 	 	 	 	 	 	 	 	 	
 	 	13 Weeks Ended	 	
 	 	April 30,	 	 	May 1,	 	
 	 	2011	 	 	2010	 	
 	 	(Unaudited)	 	
Operating activities	 	 	 	 	 	 	 	 	
Net income	 	$	23,296	 	 	$	13,661	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	17,510	 	 	 	15,918	 	
Deferred income taxes	 	 	(942	)	 	 	—	 	
Non-cash stock compensation charges	 	 	2,808	 	 	 	1,735	 	
Excess tax benefits from stock-based compensation	 	 	(8,736	)	 	 	(724	)	
Loss on disposal of property and equipment	 	 	477	 	 	 	197	 	
Change in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Receivables	 	 	6,658	 	 	 	5,426	 	
Merchandise inventories	 	 	(37,031	)	 	 	(21,134	)	
Prepaid expenses and other current assets	 	 	277	 	 	 	1,138	 	
Income taxes	 	 	15,187	 	 	 	(3,317	)	
Accounts payable	 	 	(5,583	)	 	 	4,306	 	
Accrued liabilities	 	 	(14,271	)	 	 	(7,722	)	
Deferred rent	 	 	4,787	 	 	 	333	 	
 	 	 	
Net cash provided by operating activities	 	 	4,437	 	 	 	9,817	 	
 	 	 	 	 	 	 	 	 	
Investing activities	 	 	 	 	 	 	 	 	
Purchases of property and equipment	 	 	(19,540	)	 	 	(7,698	)	
 	 	 	
Net cash used in investing activities	 	 	(19,540	)	 	 	(7,698	)	
 	 	 	 	 	 	 	 	 	
Financing activities	 	 	 	 	 	 	 	 	
Proceeds from issuance of common stock under stock plans	 	 	11,993	 	 	 	1,810	 	
Excess tax benefits from stock-based compensation	 	 	8,736	 	 	 	724	 	
 	 	 	
Net cash provided by financing activities	 	 	20,729	 	 	 	2,534	 	

Net increase in cash and cash equivalents	 	 	5,626	 	 	 	4,653	 	
Cash and cash equivalents at beginning of period	 	 	111,185	 	 	 	4,017	 	
 	 	 	
Cash and cash equivalents at end of period	 	$	116,811	 	 	$	8,670	 	

 
Exhibit 4
2011 Store Expansion
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Total stores open	 	Number of stores	 	Number of stores	 	 	
 	 	at beginning of the	 	opened during the	 	closed during the	 	Total stores open	
Fiscal 2011	 	quarter	 	quarter	 	quarter	 	at end of the quarter	
 	
1 st Quarter	 	 	389	 	 	 	5	 	 	 	0	 	 	 	394	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Gross square feet	 	 	 	 	
 	 	Total gross square	 	for stores opened	 	Gross square feet	 	Total gross square	
 	 	feet at beginning	 	or expanded during	 	for stores closed	 	feet at end of the	
Fiscal 2011	 	of the quarter	 	the quarter	 	during the quarter	 	quarter	
 	
1 st Quarter	 	 	4,094,808	 	 	 	58,612	 	 	 	0	 	 	 	4,153,420