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Company Links |
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Major Stock Holders
(Prior To
Offering) |
Name |
Class A |
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Charles Heilbronn |
22.70% |
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Doublemousse B.V |
22.50% |
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GRP II, L.P. and affiliated entities |
26.30% |
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Steven E. Lebow |
28.10% |
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Yves Sisteron |
26.70% |
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Major Stock Holders
(After Offering) |
Name |
Common Stock |
Class A |
Class B |
Class C |
Class L |
ADS |
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Charles Heilbronn |
0% |
19.60% |
0% |
0% |
0% |
0% |
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Doublemousse B.V |
0% |
19.50% |
0% |
0% |
0% |
0% |
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GRP II, L.P. and affiliated entities |
0% |
22.70% |
0% |
0% |
0% |
0% |
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Steven E. Lebow |
0% |
24.30% |
0% |
0% |
0% |
0% |
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Yves Sisteron |
0% |
23.10% |
0% |
0% |
0% |
0% |
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Business Environment |
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The U.S. beauty products and salon services market represented approximately $75 billion in retail sales, according to Kline & Company and IBISWorld Inc. The approximately $35 billion beauty products industry includes color cosmetics, haircare, fragrance, bath and body, skincare, salon styling tools and other toiletries. The approximately $40 billion salon services industry consists of hair, face and nail services.
Distribution for beauty products is varied. Prestige products are typically purchased in department or specialty stores, while mass products and staple items are generally purchased at drug stores, food retail stores and mass merchandisers. In addition, salon haircare products are sold in salons and authorized professional retail outlets.
From 2000 to 2006, changes in consumer shopping preferences and industry consolidation have resulted in declines in the market share of department stores from 18% to 15% and of food retail stores and other channels from 33% to 31%, while the specialty retail channel has increased its share of the beauty retail market from 7% to 9%, according to Kline & Company. Distribution for salon products and services is highly fragmented.
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Company Strategy |
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The Company is the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. |
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Product/Services Portfolio |
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The Company’s stores are located in high-traffic, off-mall locations such as power centers and lifestyle centers with other destination retailers. The Company’s typical store is approximately 10,000 square feet, including approximately 950 square feet dedicated to its full-service salon. As of August 4, 2007, The Company operated 211 stores in 26 states.
The Company operates full-service salons in all of its stores. The Company’s current ULTA store format includes an open and modern salon area with eight to ten stations.
The entire salon area is approximately 950 square feet with a concierge desk, esthetics room, semi-private shampoo and hair color processing areas. Each salon is a full-service salon offering hair cuts, hair coloring, permanent texture, with most salons also providing facials and waxing.
The Company established ULTA.com to give its customers an opportunity to access the product offerings beyond its retail stores. The Company plans to go live with a new version of its website in 2008 or earlier. The new version of ULTA.com will more effectively support the key elements of the ULTA brand proposition by providing access to over 9,000 beauty products from over 400 brands.
ULTA stores are open seven days a week, 11 hours a day, Monday through Saturday, and seven hours on Sunday. The Company’s stores have extended hours during the holiday season.
A typical Company’s salon is staffed with eight to 15 licensed salon professionals, including one salon manager, eight to 12 stylists, and one to two estheticians.
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Investment Analysis |
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Net sales increased $72.6 million, or 22.5%, to $394.6 million for the six months ended August 4, 2007, compared to $322.0 million for the six months ended July 29, 2006.
Gross profit increased $18.4 million, or 18.4%, to $118.5 million for the six months ended August 4, 2007, compared to $100.1 million for the six months ended July 29, 2006.
Pre-opening expenses increased $2.2 million, or 88.3%, to $4.6 million for the six months ended August 4, 2007, compared to $2.4 million for the six months ended July 29, 2006.
Interest expense increased by $0.7 million, or 48.1%, to $2.2 million for the six months ended August 4, 2007, compared to $1.5 million for the six months ended July 29, 2006.
Net income decreased $1.8 million, or 18.8%, to $7.5 million for the six months ended August 4, 2007, compared to $9.3 million for the six months ended July 29, 2006.
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Income Data (Thousand $ Except EPS) |
| Year |
Revenues |
Costs |
Oper Income |
Taxes |
Net Income |
EPS |
| 2004
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491,152 |
0.00 |
18,496 |
6,201 |
9,460 |
-0.70 |
| 2005
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579,075 |
0.00 |
29,424 |
10,504 |
15,969 |
0.74 |
| 2006
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755,113 |
0.00 |
40,088 |
14,231 |
22,543 |
1.38 |
| 2007
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394,562 |
0.00 |
14,805 |
5,122 |
7,525 |
-0.01 |
| *As of period ended August 4, 2007
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Balance Sheet Data
(Thousand $) |
Year |
Cash |
Acct Recv. |
Inventory |
Total Cur Assets |
Total Cur Liability |
PPE |
Total Assets |
LT Debt |
SH Equity |
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2005 |
2,839 |
0.00 |
0.00 |
145,451 |
68,978 |
133,003 |
282,615 |
0.00 |
123,015 |
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2006 |
3,645 |
0.00 |
0.00 |
172,046 |
83,941 |
162,080 |
338,597 |
0.00 |
148,760 |
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2007 |
3,165 |
0.00 |
0.00 |
194,787 |
120,106 |
196,919 |
397,594 |
0.00 |
161,007 |
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*As of period ended August 4, 2007
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| Cash
Flow Summary
(Thousand $) |
Year |
Net Cash-Ops |
Net Cash-Inv |
Net Cash-Fin |
Net Change |
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2004 |
29,261 |
-34,807 |
5,372 |
-174 |
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2005 |
37,601 |
-41,607 |
3,841 |
-165 |
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2006 |
55,630 |
-64,745 |
9,921 |
806 |
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2007 |
57 |
-38,422 |
37,885 |
-480 |
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*As of period ended August 4, 2007
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- Avoid 
- Short-Term Growth
- Long-Term Growth 
- Long-Term Value 