Annual report pursuant to Section 13 and 15(d)

Revenue

v3.23.1
Revenue
12 Months Ended
Jan. 28, 2023
Revenue  
Revenue

3.   Revenue

Net sales include retail stores and e-commerce merchandise sales as well as salon services and other revenue. Other revenue includes the private label and co-branded credit card programs, royalties derived from the partnership with Target Corporation, and deferred revenue related to the loyalty program and gift card breakage.

Disaggregated revenue

The following table sets forth the approximate percentage of net sales by primary category:

Fiscal year ended

January 28,

January 29,

January 30,

(Percentage of net sales)

2023

2022

2021

Cosmetics

42%

43%

45%

Haircare products and styling tools

21%

20%

20%

Skincare

17%

17%

16%

Fragrance and bath

14%

14%

12%

Services

3%

3%

3%

Accessories and other

3%

3%

4%

100%

100%

100%

Deferred revenue

Deferred revenue primarily represents contract liabilities for the obligation to transfer additional goods or services to a guest for which the Company has received consideration, such as unredeemed Ultamate Rewards loyalty points and unredeemed Ulta Beauty gift cards. In addition, breakage on gift cards is recognized proportionately as redemption occurs.

The following table provides a summary of the changes included in deferred revenue during fiscal 2022 and 2021:

Fiscal year ended

January 28,

January 29,

(In thousands)

2023

    

2022

Beginning balance

$

345,206

$

269,032

Additions to contract liabilities (1)

292,254

261,139

Deductions to contract liabilities (2)

(248,877)

(184,965)

Ending balance

$

388,583

$

345,206

(1) Loyalty points and gift cards issued in the current period but not redeemed or expired.
(2) Revenue recognized in the current period related to the beginning liability.

Other amounts included in deferred revenue were $6,094 and $8,373 at January 28, 2023 and January 29, 2022, respectively.