Ulta 2010 Annual Report Download - page 7

FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K 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 Form 10-K 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 Item 1A, “Risk Factors” of this Annual Report on Form 10-K for the year ended January 29, 2011. We
assume no obligation to update any forward-looking statements as a result of new information, future events or
developments. References in the following discussion to “we”, “us”, “our”, “the Company”, “Ulta” and similar
references mean Ulta Salon, Cosmetics & Fragrance, Inc. unless otherwise expressly stated or the context
otherwise requires.
Part I
Item 1. Business
Overview
Ulta Salon, Cosmetics & Fragrance, Inc. is the largest beauty retailer that provides one-stop shopping for
prestige, mass and salon products and salon services in the United States. We focus on providing affordable
indulgence to our customers by combining the product breadth, value and convenience of a beauty superstore
with the distinctive environment and experience of a specialty retailer. Key aspects of our business include:
One-Stop Shopping. Our customers can satisfy all of their beauty needs at Ulta. We offer a unique
combination of over 21,000 prestige and mass beauty products organized by category in bright, open,
self-service displays to encourage our customers to play, touch, test, learn and explore. We believe we
offer the widest selection of categories across prestige and mass cosmetics, fragrance, haircare, skincare,
bath and body products and salon styling tools. We also offer a full-service salon and a wide range of
salon haircare products in all of our stores.
Our Value Proposition. We believe our focus on delivering a compelling value proposition to our
customers across all of our product categories is fundamental to our customer loyalty. For example, we
run frequent promotions and gift coupons for our mass brands, gift-with-purchase offers and multi-product
gift sets for our prestige brands, and a comprehensive customer loyalty program. We also maintain a
strategic value relationship with others in the category through competitive pricing and promotion.
An Off-Mall Location. We are conveniently located in high-traffic, primarily off-mall locations such as
power centers and lifestyle centers with other destination retailers. Our typical store is approximately
10,000 square feet, including approximately 950 square feet dedicated to our full-service salon. Our
displays, store design and open layout allow us the flexibility to respond to consumer trends and changes
in our merchandising strategy.
3