Ulta 2014 Annual Report Download - page 15

Information technology
We are committed to using technology to enhance our competitive position. We depend on a variety of
information systems and technologies to maintain and improve our competitive position and to manage the
operations of our growing store base. We rely on computer systems to provide information for all areas of our
business, including supply chain, merchandising, POS, e-commerce, marketing, finance, accounting and human
resources. Our core business systems consist mostly of purchased software programs that integrate with our
internally developed software solutions. Our technology also includes a company-wide network that connects all
corporate users, stores and our distribution infrastructure and provides communications for credit card and daily
polling of sales and merchandise movement at the store level. We intend to leverage our technology
infrastructure and systems where appropriate to gain operational efficiencies through more effective use of our
systems, people and processes. We update the technology supporting our stores, distribution infrastructure and
corporate headquarters on a regular basis. We will continue to make investments in our information systems to
facilitate our growth and enable us to enhance our competitive position.
Intellectual property
We have registered over 40 trademarks in the United States and other countries. The majority of our trademark
registrations contain the ULTA mark, including Ulta Salon Cosmetics Fragrance (and design), Ulta.com and Ulta
Beauty and two related designs. We maintain our marks on a docket system to monitor filing deadlines for
renewal and continued validity. All marks that are deemed material to our business have been applied for or
registered in the United States and select foreign countries, including Canada.
We believe our trademarks, especially those related to the Ulta brand, have significant value and are important to
building brand recognition.
Government regulation
We are affected by extensive U.S. laws, governmental regulations, administrative determinations, court decisions
and similar constraints. Such laws, regulations and other constraints may exist at the federal, state or local levels
in the United States. Many of the products we sell in our stores, such as cosmetic, dietary supplement, food and
over-the-counter (OTC) drug products, including our Ulta branded products, are subject to regulation by the U.S.
Food and Drug Administration (FDA), the U.S. Federal Trade Commission (FTC), state regulatory agencies and
State Attorneys General (AG). Such regulations principally relate to the safety of ingredients, proper labeling,
manufacturing, advertising, packaging and distribution of the products.
Products classified as cosmetics (as defined in the Federal Food, Drug and Cosmetic (FDC Act) are not subject to
pre-market approval by the FDA, but the products must generally be safe and must be properly manufactured and
labeled. Certain products, such as sunscreens and acne treatments, are classified as OTC drugs, and certain
ingestible products, such as vitamins and minerals, are classified as dietary supplements. Both OTC drugs and
dietary supplements have specific ingredient, labeling and manufacturing requirements. The labeling of these
products is subject to the requirements of the FDC Act and the Fair Packaging and Labeling Act. Further, claims
we make in advertising, including claims about the safety or efficacy of products, pricing claims and
environmental claims, are subject to regulation by the FTC and State AGs who generally prohibit deceptive
practices.
The government regulations that most impact our day-to-day operations are the labor and employment and
taxation laws to which most retailers are typically subject. We are also subject to typical zoning and real estate
land use restrictions and typical advertising and consumer protection laws (both federal and state). Our services
business is subject to state board regulations and state licensing requirements.
In our store leases, we require our landlords to obtain all necessary zoning approvals and permits for the site to
be used as a retail site and we also ask them to obtain any zoning approvals and permits for our specific use (but
at times the responsibility for obtaining zoning approvals and permits for our specific use falls to us). We require
our landlords to deliver a certificate of occupancy for any work they perform on our buildings or the shopping
11