ULTA SALON, COSMETICS & FRAGRANCE, INC.

ANALYST: CHAD DE GANNES

BACKGROUND INFORMATION CEO: Mary N. Dillon (June 2013) Headquarters: Bolingbrook, IL

Founded: 1990

Exchange: NasdaqGS:ULTA

Last Share Price: $240.18 (11/1/2016)

Description: Ulta Salon, Cosmetics & Fragrance, Inc. operates as a specialty retailer in the United States. Its stores provide cosmetics, fragrance, haircare, skincare, bath and body products, and salon styling tools. Further, the company offers private label products consisting of Ulta branded cosmetics, skincare, bath and body products, and haircare products; and other health and beauty products. As of January 30, 2016, it operated 874 retail stores in 48 states. Currently they have 900 stores in the U.S.

HISTORICAL DATA Peak Revenues of $3.92B in the year ending Jan 2016.

Revenues have increased by 120% since year ending Jan 2012 to year ending Jan 2016.

Ulta occupies around 4% share of the $127 billion beauty market in the U.S. today.

Current P/E Ratio of 42.23, Industry is at 20.87

Stock Performance

11/10/2011: $72.35

11/1/2016: $240.18

Stock price has soared to a price of $240.18, a 231.97% increase over roughly 5 years.

Annual growth rate of 46.3%

ULTA VS ITS’S PEERS (10/27/2016)

STEADY INCREASES EACH YEAR

FUTURE GROWTH

Store and Ecommerce Planned expansion of store locations to 1400-1700 from 900 current store locations by 2019. Ultamate Rewards Program growing customer base and member count more than doubled since 2011. Mobile-first e-commerce business with strong growth. 95% of online orders to be delivered in three days by 2018.Loyalty & Credit Card Programs Alliance Data Systems Corp. has signed a long-term agreement with Ulta, to provide private label and co-branded credit card services. Branded credit cards which are intended to enhance customer experience of Ultamate rewards program. The rewards credit card program will leverage the MasterCard network so card members can use it anywhere MasterCard is accepted

around the world.Sharpening Focus on Key Demographics More focus is being put into three segments, Millennials, Latinas and Teens. Projected income from Millennial segment to be $8.3 Trillion by 2025. Latina shop 24% more than the average customer Teens are 16% more likely to shop at Ulta and 87% of teens enjoy shopping in store for beauty products

MODEL VALUATION

Target Price: $326