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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:
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|
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|
|
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13 Weeks Ended |
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26 Weeks Ended |
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August 3, |
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July 29, |
|
August 3, |
|
July 29, |
(Percentage of net sales) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Cosmetics |
|
39% |
|
40% |
|
40% |
|
42% |
Skincare |
|
24% |
|
23% |
|
24% |
|
22% |
Haircare |
|
20% |
|
22% |
|
19% |
|
21% |
Fragrance |
|
11% |
|
9% |
|
11% |
|
9% |
Services |
|
4% |
|
4% |
|
4% |
|
4% |
Other |
|
2% |
|
2% |
|
2% |
|
2% |
|
|
100% |
|
100% |
|
100% |
|
100% |
Certain sales departments were reclassified between categories in the prior year to conform to current year presentation, including moving the bath category from Fragrance to Skincare.
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 Ulta Beauty 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 the 13 and 26 weeks ended August 3, 2024 and July 29, 2023:
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|
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13 Weeks Ended |
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26 Weeks Ended |
|
|
August 3, |
|
July 29, |
|
August 3, |
|
July 29, |
(In thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Beginning balance |
|
$ |
391,446 |
|
$ |
350,123 |
|
$ |
428,788 |
|
$ |
388,583 |
Additions to contract liabilities (1) |
|
|
120,189 |
|
|
114,374 |
|
|
253,584 |
|
|
237,770 |
Deductions to contract liabilities (2) |
|
|
(123,818) |
|
|
(118,430) |
|
|
(294,555) |
|
|
(280,286) |
Ending balance |
|
$ |
387,817 |
|
$ |
346,067 |
|
$ |
387,817 |
|
$ |
346,067 |
| (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 $7,170 and $8,186 at August 3, 2024 and July 29, 2023, respectively.
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