What the changes say
- AI adoption, misuse, and competitive technology gaps are now explicit risks for Ulta Beauty.
- International expansion through Space NK, Mexico, and Middle East partnerships adds execution and profitability risks.
- Tariffs, trade conditions, inventory management, and brand-partner supply constraints receive greater emphasis.
- Real estate optimization, private-label exposure, reputation, acquisitions, and cybersecurity remain prominent operating risks.
What changed since the prior 10-K
New
- NewBusiness, Operational, and Strategic Risks
If we are not successful in managing our inventory balances, our sales may decline and our results of operations may be negatively affected
Poor inventory forecasting could create beauty-product shortages or excess merchandise, forcing markdowns, lost sales, and lower profitability.
- NewBusiness, Operational, and Strategic Risks
The development and use or misuse of AI or the failure to use AI present risks and challenges that may negatively affect our business
Ulta may lose competitiveness by failing to adopt AI and agentic commerce, or suffer financial and reputational harm from inaccurate or improper AI use.
- NewBusiness, Operational, and Strategic Risks
An inability to execute our real estate growth and optimization strategy could affect our financial results
Ulta may fail to secure attractive leases, optimize stores, or achieve expected results from openings, relocations, remodels, renewals, and closures.
- NewBusiness, Operational, and Strategic Risks
Expanding into international markets exposes us to additional risks
Space NK, Mexico, and Middle East expansion brings unfamiliar markets, higher costs, local competition, and uncertainty about sustained profitability.
- NewBusiness, Operational, and Strategic Risks
Harm to our reputation could adversely impact our ability to attract and retain guests, associates, vendors, and/or other partners
Negative perceptions involving Ulta, products, associates, vendors, partners, or business practices could reduce trust among guests and other stakeholders.
- NewBusiness, Operational, and Strategic Risks
Our private label brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market, and retail exclusive private label brand merchandise
Ulta’s private-label merchandise creates sourcing, manufacturing, regulatory, recall, product-liability, intellectual-property, and overseas supply risks.
- NewBusiness, Operational, and Strategic Risks
We may not realize the anticipated benefits of acquisitions, joint ventures, and partnerships, or these benefits may take longer to realize than expected
Acquisitions, joint ventures, and partnerships may be difficult to integrate, expose Ulta to compliance issues, or fail to deliver expected returns.
- NewBusiness, Operational, and Strategic Risks
Information Security, Cybersecurity, Data Privacy, Regulatory, and Legal Risks
Information-system failures, cybersecurity incidents, privacy problems, or difficulties replacing and upgrading systems could disrupt operations and damage results, especially during holidays.
Dropped
- DroppedBusiness, Operational and Strategic Risks
We may not be able to sustain our growth plans and successfully implement our long-range strategic, operational and financial plans, which could have a material adverse effect on our business, financial condition, profitability, and cash flows
Failure to execute long-range growth, store-opening, operational-excellence, and supply-chain plans.
- DroppedBusiness, Operational and Strategic Risks
Accordingly, our results for any one fiscal quarter are not necessarily indicative of the results to be expected for any other quarter, and comparable sales for any particular future period may decrease. In that event, the price of our common stock may decline
- DroppedBusiness, Operational and Strategic Risks
Use of social media may adversely impact our reputation
- DroppedBusiness, Operational and Strategic Risks
A reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located could significantly reduce our sales and leave us with excess inventory, which could have a material adverse effect on our business, financial condition, profitability, and cash flows
- DroppedBusiness, Operational and Strategic Risks
the sale of our Ulta Beauty branded products. In particular, failure to adequately comply with the following legal requirements could have a material adverse effect on our business, financial condition, profitability, and cash flows
Reworded
- 99% rewrittenBusiness, Operational, and Strategic Risks
Our comparable sales and quarterly financial performance may fluctuate due to seasonality and other factors outside of our control, which could result in a decline in the price of our common stock
The disclosure now focuses on Valentine’s Day, Mother’s Day, and November/December demand forecasting and pre-holiday inventory, rather than a broad list of sales drivers.
Was: Our comparable sales and quarterly financial performance may fluctuate for a variety of reasons, which could result in a decline in the price of our common stock
- 98% rewrittenBusiness, Operational, and Strategic Risks
If we are unable to anticipate and fulfill the merchandise needs of the consumer, our net sales may decrease and we may be forced to increase markdowns of slow-moving merchandise, either of which could have a material adverse effect on our business, financial condition, profitability, and cash flows
The risk shifts from distribution-center disruption to impaired brand-partner relationships, changing distribution models, supply shortages, and the absence of long-term agreements.
- 88% rewrittenBusiness, Operational, and Strategic Risks
We, as well as our vendors, are subject to numerous laws and regulations that could require us to modify our current business practices and incur increased costs, which could have a material adverse effect on our business, financial condition, profitability, and cash flows
Coverage expands from U.S. requirements to international markets and explicitly includes potential bans on stores or Ulta Beauty branded-product sales.
Was: We, as well as our vendors, are subject to laws and regulations that could require us to modify our current business practices and incur increased costs, which could have a material adverse effect on our business, financial condition, profitability, and cash flows
- 76% rewrittenBusiness, Operational, and Strategic Risks
If we fail to retain our existing senior management team or attract qualified new personnel at all levels, such failure could have a material adverse effect on our business, financial condition, profitability, and cash flows
The emphasis shifts from retaining senior management and training leaders to retaining qualified store, distribution-center, and corporate associates, while key executives remain covered.
- 74% rewrittenBusiness, Operational, and Strategic Risks
If our marketing, advertising, and promotional programs are unsuccessful, our results of operations and financial condition could be adversely affected
Only terminology changes materially in the provided text, with customers consistently described as guests.
- 71% rewritten
Macroeconomic conditions could have a material adverse impact on our business, financial condition, profitability, and cash flows
The disclosure adds dynamic global trade conditions and elevated tariffs, including potential input costs, supply disruption, pricing volatility, and pressure continuing into 2026.
- 65% rewrittenBusiness, Operational, and Strategic Risks
Increased costs or interruption in our third-party vendors’ overseas sourcing operations could disrupt production, shipment, or receipt of some of our merchandise, which could result in lost sales and could increase our costs
The overseas-sourcing disruption examples now expressly include trade wars alongside import restrictions, tariffs, quotas, and geopolitical or political events.
- 58% rewrittenBusiness, Operational, and Strategic Risks
Cybersecurity or information security breaches and other disruptions could compromise our information, result in the unauthorized disclosure of confidential guest, employee, Company, and/or business partner information, damage our reputation, and expose us to liability, which could negatively impact our business
The provided prior-year and current-year cybersecurity text is materially unchanged.
Was: Cybersecurity or information security breaches and other disruptions could compromise our information, result in the unauthorized disclosure of confidential guest, employee, Company and/or business partners’ information, damage our reputation, and expose us to liability, which could negatively impact our business
- 55% rewritten
The health of the economy may affect consumer purchases of discretionary items such as beauty products and salon services, which could have a material adverse effect on our business, financial condition, profitability, and cash flows
- 53% rewritten
We may be unable to compete effectively in our highly competitive markets
- 48% rewrittenBusiness, Operational, and Strategic Risks
If we are unable to protect our intellectual property rights and our brand name, our brand and reputation could be harmed, which could have a material adverse effect on our business, financial condition, profitability, and cash flows
- 46% rewrittenBusiness, Operational, and Strategic Risks
Litigation and other legal or regulatory proceedings or claims and the outcome of such litigation, proceedings, or claims, including possible fines and penalties, could have a material adverse effect on our business and any loss contingency accruals may not be adequate to cover actual losses
- 44% rewrittenBusiness, Operational, and Strategic Risks
Our secured revolving credit facility contains certain restrictive covenants that could limit our operational flexibility, including our ability to open stores
- 25% rewrittenBusiness, Operational, and Strategic Risks
Failure to maintain satisfactory compliance with applicable privacy and data protection laws and regulations may subject us to negative financial consequences, including civil or criminal penalties, and harm our brand and reputation
- 23% rewrittenBusiness, Operational, and Strategic Risks
Our associates or others may engage in misconduct or other improper activities, including noncompliance with our policies and procedures
- 21% rewrittenBusiness, Operational, and Strategic Risks
Our stock repurchase programs could affect the price of our common stock and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock
All 29 risk factors
Headings as the filing states them, in filing order.
Other
- 01Macroeconomic conditions could have a material adverse impact on our business, financial condition, profitability, and cash flows71% rewritten
- 02The health of the economy may affect consumer purchases of discretionary items such as beauty products and salon services, which could have a material adverse effect on our business, financial condition, profitability, and cash flows55% rewritten
- 03We may be unable to compete effectively in our highly competitive markets53% rewritten
- 04Epidemics, pandemics, natural disasters, conflicts, or other catastrophes or crises could have a material adverse effect on our business, financial condition, profitability, and cash flows
- 05Climate change could adversely impact our business operations and/or our supply chain
Business, Operational, and Strategic Risks
- 06Our comparable sales and quarterly financial performance may fluctuate due to seasonality and other factors outside of our control, which could result in a decline in the price of our common stock99% rewritten
- 07If we are not successful in managing our inventory balances, our sales may decline and our results of operations may be negatively affectedNew
- 08If we are unable to gauge beauty trends and react to changing consumer preferences in a timely manner, our sales may decrease
- 09If we are unable to anticipate and fulfill the merchandise needs of the consumer, our net sales may decrease and we may be forced to increase markdowns of slow-moving merchandise, either of which could have a material adverse effect on our business, financial condition, profitability, and cash flows98% rewritten
- 10The development and use or misuse of AI or the failure to use AI present risks and challenges that may negatively affect our businessNew
- 11If we fail to retain our existing senior management team or attract qualified new personnel at all levels, such failure could have a material adverse effect on our business, financial condition, profitability, and cash flows76% rewritten
- 12Our e-commerce platform exposes us to certain additional risks which could adversely affect our results of operations
- 13If our marketing, advertising, and promotional programs are unsuccessful, our results of operations and financial condition could be adversely affected74% rewritten
- 14Increased costs or interruption in our third-party vendors’ overseas sourcing operations could disrupt production, shipment, or receipt of some of our merchandise, which could result in lost sales and could increase our costs65% rewritten
- 15An inability to execute our real estate growth and optimization strategy could affect our financial resultsNew
- 16Expanding into international markets exposes us to additional risksNew
- 17Harm to our reputation could adversely impact our ability to attract and retain guests, associates, vendors, and/or other partnersNew
- 18If we are unable to protect against inventory shrink, our results of operations and financial condition could be adversely affected
- 19Our private label brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market, and retail exclusive private label brand merchandiseNew
- 20We may not realize the anticipated benefits of acquisitions, joint ventures, and partnerships, or these benefits may take longer to realize than expectedNew
- 21Our secured revolving credit facility contains certain restrictive covenants that could limit our operational flexibility, including our ability to open stores44% rewritten
- 22Our stock repurchase programs could affect the price of our common stock and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock21% rewritten
- 23Information Security, Cybersecurity, Data Privacy, Regulatory, and Legal RisksNew
- 24Cybersecurity or information security breaches and other disruptions could compromise our information, result in the unauthorized disclosure of confidential guest, employee, Company, and/or business partner information, damage our reputation, and expose us to liability, which could negatively impact our business58% rewritten
- 25Failure to maintain satisfactory compliance with applicable privacy and data protection laws and regulations may subject us to negative financial consequences, including civil or criminal penalties, and harm our brand and reputation25% rewritten
- 26We, as well as our vendors, are subject to numerous laws and regulations that could require us to modify our current business practices and incur increased costs, which could have a material adverse effect on our business, financial condition, profitability, and cash flows88% rewritten
- 27Our associates or others may engage in misconduct or other improper activities, including noncompliance with our policies and procedures23% rewritten
- 28Litigation and other legal or regulatory proceedings or claims and the outcome of such litigation, proceedings, or claims, including possible fines and penalties, could have a material adverse effect on our business and any loss contingency accruals may not be adequate to cover actual losses46% rewritten
- 29If we are unable to protect our intellectual property rights and our brand name, our brand and reputation could be harmed, which could have a material adverse effect on our business, financial condition, profitability, and cash flows48% rewritten
Other Ulta Beauty 10-Ks
- FY2025 10-K risk factors26 risks
Growth depends on new store openings, e-commerce execution, and managing inventory shrink from organized retail crime.
Filed Mar 27, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.