Ulta 2015 Annual Report Download - page 4

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Compelling Loyalty Program and Customer Relationship Management
Our Ultamate Rewards loyalty program and CRM platform continue to be among our most valuable assets. We
accelerated growth in our loyalty program membership during 2015, adding 3.2 million members to reach 18.2 million
active members by year-end. We rebranded the loyalty program across all touch points, and we are seeing excellent
trends in retention rates, sales per member, frequency of purchase and average ticket. By leveraging our loyalty
program in more personalized and eective ways, we have been able to reduce our spending on less productive
promotional tactics. Our brand partners are finding increasing value in working with our data analytics team and our
CRM platform to jointly develop targeted email and direct mail campaigns, exclusive oers for our best members
and programs to drive trial of new products. All of these eorts drove incremental sales and margin dollars.
Infrastructure Improvements
We continue to invest in infrastructure to support our guest experience and growth, and capture scale eciencies.
We opened our new distribution center in Greenwood, Indiana, in August of 2015 and successfully ramped this facility
to serve 125 stores and deliver 25,000 e-commerce orders per day during the peak holiday season. We are very
pleased with how the new distribution center is performing and we expect to continue ramping up this facility to
serve another 100 stores by the end of 2016. In 2015, we delivered against complex IT goals, with the implementation
of a host of new systems across the enterprise. The next new distribution center in Dallas, Texas, is on track to open
during the summer of 2016.
A Winning Culture
Underlying our progress against our organization’s long range strategic plan is a foundational imperative reflecting
the importance of talent and our company’s culture. We believe that talent drives a winning culture: guest-centric,
values-based and high performance. Our 2015 results are a reflection of the attractive beauty category, sound
strategies and great execution, but also the progress we’ve made in building our company’s culture. We are putting
our guest and our associate at the center of everything we do and we now have evidence these eorts are having an
impact. We achieved significant year over year increases in the level of engagement of our associates, as measured by
a third party through our annual culture survey. We were proud to achieve global top quartile employee engagement
scores among best in class companies in 2015.
2015 Financial Position
Ulta Beauty’s financial position remains very strong. We generated $76.7 million in free cash flow in fiscal 2015 after
investing $299.2 million in capital. At year end, our debt free balance sheet included $475.8 million of cash and short
term investments. During 2015, we returned value to shareholders through our stock repurchase program, buying
back approximately one million shares for $167.4 million.
In closing, I would like to thank our 26,000 dedicated Ulta Beauty associates who join me in our quest to bring the fun
of beauty to all – constantly delighting our guests with all things beauty, all in one place. I would also like to thank our
shareholders, guests, brand partners and our Board of Directors for their continued support.
Sincerely,
Mary Dillon
Chief Executive Ocer