ULTA BEAUTY, INC.

Red flags

• Fiscal 2025 net income fell to $1.153 billion from $1.201 billion in fiscal 2024 and $1.291 billion in fiscal 2023, while diluted EPS rose to $25.64 mainly alongside a reduction in diluted shares to 44.991 million from 47.404 million.
• Cash and cash equivalents declined from $703.2 million to $424.2 million year over year, even after the company generated substantial earnings and repurchased $898.5 million of stock.
• Space NK had $62.3 million outstanding under its revolving facility at January 31, 2026; the subsidiary’s facility is secured by its assets and has leverage and interest-coverage covenants.
• The company carried $2.12 billion of operating lease liabilities and paid $438.8 million in operating lease liabilities during fiscal 2025, creating meaningful fixed-cost exposure if traffic or comparable sales weaken.
• Vendor allowances receivable increased to $157.3 million from $145.3 million, while total receivables rose to $296.2 million from $223.3 million; collection and vendor-health exposure bears monitoring in a pressured environment.