Ulta 2014 Annual Report Download - page 27

Failure to maintain adequate financial and management processes and controls could lead to errors in our
financial reporting and could harm our ability to manage our expenses.
Reporting obligations as a public company and our anticipated growth are likely to place a strain on our financial
and management systems, processes and controls, as well as on our personnel. In addition, as a public company
we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002 so that our management can periodically certify as to the effectiveness of our
internal controls over financial reporting. As a result, we have been required to improve our financial and
managerial controls, reporting systems and procedures and have incurred and will continue to incur expenses to
test our systems and to make such improvements. If our management is unable to certify the effectiveness of our
internal controls, or if our independent registered public accounting firm cannot render an opinion on the
effectiveness of our internal control over financial reporting or if material weaknesses in our internal controls are
identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could have a
material adverse effect on our business and our stock price. In addition, if we do not maintain adequate financial
and management personnel, processes and controls, we may not be able to accurately report our financial
performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to
raise capital.
The market price for our common stock may be volatile, and an investor may not be able to sell our stock at a
favorable price or at all.
The market price of our common stock is likely to fluctuate significantly from time to time in response to factors
including:
‰differences between our actual financial and operating results and those expected by investors;
‰fluctuations in quarterly operating results;
‰our performance during peak retail seasons such as the holiday season;
‰market conditions in our industry and the economy as a whole;
‰changes in the estimates of our operating performance or changes in recommendations by any research
analysts that follow our stock or any failure to meet the estimates made by research analysts;
‰investors’ perceptions of our prospects and the prospects of the beauty products and salon services
industries;
‰the performance of our key vendors;
‰announcements by us, our vendors or our competitors of significant acquisitions, divestitures, strategic
partnerships, joint ventures or capital commitments;
‰introductions of new products or new pricing policies by us or by our competitors;
‰stock transactions by our principal stockholders;
‰recruitment or departure of key personnel; and
‰the level and quality of securities research analyst coverage for our common stock.
In addition, public announcements by our competitors, other retailers and vendors concerning, among other
things, their performance, strategy or accounting practices could cause the market price of our common stock to
decline regardless of our actual operating performance.
Use of social media may adversely impact our reputation or subject us to fines or other penalties.
There has been a substantial increase in the use of social media platforms, including blogs, social media websites
and other forms of internet-based communications, which allow individuals access to a broad audience of
consumers and other interested persons. Negative commentary regarding us or the products we sell may be
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