Ulta Beauty, Inc. · NASDAQ:ULTA
Ulta Beauty — Ulta Salon, Cosmetics & Fragrance — Investor Day (January 2011)
20 slides from Ulta Beauty's investor day presentation, Jan 27, 2011
Slide 1: Analyst / Investor Day Chicago, Illinois January 27, 2011
Analyst / Investor Day Chicago, Illinois January 27, 2011
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, or the Exchange Act, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect our current views wi
Slide 3: Agenda for The Day
Agenda for The Day • Introduce Management Team Business Highlights and Strategy Overview • Marketing Strategies Overview • Real Estate Strategy Overview • Store Tour - Current Prototype • Distribution Center Tour Lunch and Wrap-Up Departure for Airport (1:30 PM) 3
Slide 4: Management Team
Name Title Previous Experience Years of Retail / Beauty Experience Year Joined ULTA Chuck Rubin President & CEO Office Depot, Accenture, Federated Stores 29 2010 Gregg Bodnar CFO Borders, Coopers & Lybrand 18 2006 Janet Taake SVP, Merchandising Babies "R" Us, Sears, Mervyn's/Target 31 2008 Kimberley
Slide 5: Why Invest in ULTA?
• Fast Growth Retailer with 39% Penetration into 1,000 Store Plan • Proven Concept Growing Profitability at a 34% 5-Year Net Income CAGR(1) • Strong Performance Through Economic Cycles with over 10 Consecutive Years of Positive Comp Store Sales • Customers Continuing to Choose ULTA Shopping Experien
Slide 6: Large Addressable Beauty Market
$44 Billion Salon Services Market Source: 2009A data from Euromonitor (May 2010) and IBIS World (April 2010). (1) Other includes: oral care, bath and shower, deodorants and other toiletries. $96 Billion U.S. Market $52 Billion Beauty Products Market Hair Care Services 44% Nail Salons 3% Skin Care 10
Slide 7: Shifting Beauty Consumer Buying Patterns Favor ULTA
• Consumers Continue to Demonstrate a Preference for the Specialty Store Experience vs. Department Stores • Specialty Stores Displaying Fastest Channel Growth and Smallest Market Share Ulta Gaining Market Share Source: Kline & Co. (Data excludes services), manufacturer sales by beauty channel. CAGR
Slide 8: Demonstrated Track Record of Growth
Note: $ in millions; ULTA's fiscal year ends January of the following year. (1) Based on estimates using the mid-point of updated Q4 guidance provided on January 6, 2011. 2007 249 2006 2005 167 Number of Stores at Year End Net Income 196 CAGR +18% CAGR +34% 2007 $25 Sales and Comp Store Sales Growth
Slide 9: 2010 Full Year Highlights and Fourth Quarter Guidance
Note: $ in millions, except per share data. 2-Yr Comp equals the 1-Yr Comp plus the prior year comparative period. Excludes non-recurring compensation charge of $0.01 per share. Sales results for seven week holiday period beginning the week prior to Thanksgiving through the end of the week following
Slide 10: Well Defined Growth Strategies
Well Defined Growth Strategies • Accelerate Pace of New Store Expansion - 1,000 Store Plan • Continue Growth in New Products, Services and Brands • Enhance Successful Loyalty Program • Broaden Marketing Channels • Increase Focus On ULTA.Com Growth Annual Square Footage Growth: 15% - 20% Annual Compa
Slide 11: 1,000 Store Opportunity with Proven National Concept
Note: Store data as of January 6, 2011. Suburban 10,000 sq. ft. Model Excludes Urban & Smaller Store Opportunities Excludes International Established Presence in Large Metro Markets Successful Single-Store Markets Seasoned Team, Disciplined and Successful Process Accelerate Pace of New Store Expansi
Slide 12: Potential for 1,000 Stores
Early Phase of Store Expansion Analytically Derived Using Loyalty Data 1,000 Locations Identified That Meet Our Strict Criteria 73% 82% 93% 39% 64% 100% 720 800 1,000 1,230 1,450 1,500 Store Potential Source: Public filings, company transcripts, and Wall Street research. 12 Potential for 1,000 Store
Slide 13: Continue Growth in New Products, Services and Brands
2009 2008 Proven Ability to Add New Brands Pioneering Innovative In-Store "Brand Boutique" 2007 Fragrance Bare Escentuals Benefit Philosophy Dermalogica 13 Continue Growth in New Products, Services and Brands 2010 Category Lends to Continuous Product / Brand Innovation and Newness Salon Services Opp
Slide 14: Enhance Successful Loyalty Program
• Approximately Seven Million Plus Customer Loyalty Program Members • Represents Over 50% of Sales and Is Growing • Higher Shopping Frequency and Spend Than Non-Members • In Process of Prudent Conversion to New Customer Preferred Program, "ULTAmate Rewards" • Customer Can Redeem Points In-Store and
Slide 15: Broaden Marketing Channels
National Print • Primarily Have Utilized Direct Mail Advertising, Catalogues and Newspaper Inserts • Attractive Opportunity to Continue to Evolve Into New Marketing Channels • Customized One-on-One Marketing, Facilitated by Enhanced CRM Capabilities Direct Mail / Catalogues / Newspaper Inserts Digit
Slide 16: Increase Focus on Ulta.Com Growth
Digital Sales and Marketing has Tremendous Runway: • Dual Purpose: Drive Online Revenue and Support Multi- Channel Business • Extension of Marketing and Prospecting Strategies • Enhanced Customer Engagement • Expand E-Commerce Sales (Low Single Digit Penetration) Increasing Focus on Investment in UL
Slide 17: Three to Four Year Financial Targets
Three to Four Year Financial Targets Three to Four Year Financial Targets 17
Slide 18: Incremental Earnings Growth Through Margin Expansion
Incremental Earnings Growth Through Margin Expansion Supply Chain Efficiencies - Automated Material Handling Technology and Equipment, Labor Management Tools and Network Design Merchandising Productivity Improvements - Demand Planning and Forecasting, Promotion/Management and Business Planning Tools
Slide 19: Increasing Returns & Self-Funded Growth
Increasing Returns & Self-Funded Growth Proven Disciplined Investment Strategy for New Store Program Lower Up-Front Investment Costs Shorter Payback Period New Store Model Economics Net Working Capital Efficiencies Self- Funded Growth Reduced Average Inventory per Store by 12.9% in 2009 Without Impa
Slide 20: Why Invest in ULTA?
• Fast Growth Retailer with 39% Penetration into 1,000 Store Plan • Proven Concept Growing Profitability at a 34% 5-Year Net Income CAGR(1) • Strong Performance Through Economic Cycles with over 10 Consecutive Years of Positive Comp Store Sales • Customers Continuing to Choose ULTA Shopping Experien
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