#1YOUR BEAUTY DESTINATION Analyst / Investor Day Chicago, Illinois January 27, 2011 (ULTA BEAUTY#2ULTA BEAUTY 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 with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as "outlook," "believes," "expects," "plans," "estimates," or other comparable words. Any forward-looking statements contained in this presentation are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation: the impact of weakness in the economy; changes in the overall level of consumer spending; changes in the wholesale cost of our products; the possibility that we may be unable to compete effectively in our highly competitive markets; the possibility that our continued opening of new stores could strain our resources and have a material adverse effect on our business and financial performance; the possibility that new store openings may be impacted by developer or co-tenant issues; the possibility that the capacity of our distribution and order fulfillment infrastructure may not be adequate to support our recent growth and expected future growth plans; the possibility of material disruptions to our information systems; weather conditions that could negatively impact sales; and other risk factors detailed in our public filings with the SEC. You are urged to carefully review the disclosures we make concerning the risks, uncertainties and assumptions that may affect our business and operating results, including, but not limited to, the risks, uncertainties and assumptions set forth in our most recent Annual Report on Form 10-K under the captions "Risk Factors," "Business," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and any of those made in our Quarterly Reports on Form 10-Q and our other reports filed with the SEC. Please consider our forward-looking statements in light of those risks, uncertainties and assumptions as you evaluate this presentation. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date of the relevant document. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We undertake no obligation to update any forward-looking statements after the date of this presentation, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws and regulations. 2#3Agenda for The Day O @ 1 D Real Estate Strategy Overview • Store Tour - Current Prototype . Introduce Management Team Business Highlights and Strategy Overview Marketing Strategies Overview - Distribution Center Tour Lunch and Wrap-Up Departure for Airport (1:30 PM) ULTA BEAUTY 3#4Experienced & Disciplined Management Team Name Chuck Rubin Gregg Bodnar Janet Taake Kimberley Grayson Alex Lelli Cindy Payne Pat Murphy Erwin Winkler Robert Guttman Christine Schultz Mary Bolyard Barbara Zamudio Holly Schmidt Phil Horvath David Southworth Title President & CEO CFO SVP, Merchandising Chief Marketing Officer SVP, Growth & Dev. SVP, Store Operations VP, Supply Chain VP, Brand Identity SVP, General Counsel CIO SVP, Prestige Cosmetics VP, Mass VP, Fragrance & Skincare VP, Salon VP, E-Commerce Previous Experience Office Depot, Accenture, Federated Stores Borders, Coopers & Lybrand Babies"R" Us, Sears, Mervyn's/Target The Children's Place, Gap, Aerosoles, Bloomingdale's Borders, Fred Meijer, K-Mart David's Bridal, Casual Comer, Disney West Marine, Borders, Avon JP Stevens/Ralph Lauren Home Furnishings, Coach Reynolds & Reynolds, Sears OfficeMax Johnson & Johnson Sears, K-Mart Sears, Mercantile Stores Calco Hair, Regis Corp. Office Max, Sears Years of Retail/ Beauty Experience 29 18 31 28 28 31 30 21 17 7 26 13 22 21 (ULTA 21 BEAUTY Year Joined ULTA 2010 2006 2008 2010 2005 2010 2008 2004 2007 2006 2002 2007 2008 1999 2007 4#5Why Invest in ULTA? # # · # 1 ULTA BEAUTY 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 Experience, Driving Market Share Gains Talented, Experienced Team in Place to Continue to Deliver Strategies Strong Operating Cash Flow Enabling Self-Funded Growth Well Defined Growth Strategies Targeting 25-30% Annual Net Income Growth (Calculated based on estimates using the mid-point of updated Q4 guidance provided on January 6, 2011. 5#6Large Addressable Beauty Market $44 Billion Salon Services Market $96 Billion U.S. Market Hair Care Services 44% Nail Salons 3% Hair Care 10% Source: 2009A data from Euromonitor (May 2010) and IBIS World (April 2010). Other includes: oral care, bath and shower, deodorants and other toiletries. Other (1) 18% Skin Care 10% Cosmetics 9% Fragrance 6% ULTA BEAUTY $52 Billion Beauty Products Market ULTA Is the ONLY Retailer That Offers Products and Services Across ALL Segments of the Beauty Market 6#7Shifting Beauty Consumer Buying Patterns Favor ULTA . i CAGR 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 8% 10% Specialty Stores 7.9% 16% Beauty Sales by Channel 2003 2008 14% Department Stores (0.5%) 17% 18% Drug Stores Source: Kline & Co. (Data excludes services), manufacturer sales by beauty channel. 3.4% 31% 31% ULTA BEAUTY Mass Merchandisers 2.4% 28% 27% Other 1.9% 7#8Demonstrated Track Record of Growth (ULTA Number of Stores at Year End Sales and Comp Store Sales Growth Net Income Sales 167 2005 $579 2005 Comps 8.3% $16 2005 68.8% 196 2006 $755 2006 14.5% $23 249 2007 $912 2007 6.4% $25 311 2008 $1,085 2008 0.2% $25 2006 2008 2007 41.2% 12.4% (0.3%) Growth Note: $ in millions; ULTA's fiscal year ends January of the following year. Based on estimates using the mid-point of updated Q4 guidance provided on January 6, 2011. 346 2009 $1,223 $1,446 2009 1.4% 389 $39 2010E(¹) 2010E(1) 10.4% $68 2010E(¹) 2009 55.8% 74.4% BEAUTY CAGR +18% CAGR +20% CAGR +34% 8#9Strong Holiday Season Performance to Finish 2010 Holiday Season - Revenue (3) Growth: 18.4% $262.2 2009 $310.4 2010 Fourth Quarter Guidance (January 6, 2011) Net Sales: $463 $467 million Comp Store Sales: 8% -9% EPS: $0.43 $0.44 (including $0.01 non-recurring compensation charge) Adjusted EPS(2): $0.44 - $0.45 Q4 2009 EPS: $0.34 Two Year Comp(¹): 17.4% B i . Holiday Season - Comp(³) 7.9% 2009 (ULTA Net Sales Growth: 18% BEAUTY Comp Store Sales Increase: 10.4% Opened 47 New Stores: 13% Growth Remodeled 13 Stores EPS Growth of 68% (including $0.06 non-recurring compensation charge) Operating Margin Expansion of 240 bps to 8% Note: $in millions, except per share data. (1/2-Yr Comp equals the 1-Yr Comp plus the prior year comparative period. (2)Excludes non-recuming compensation charge of $0.01 per share. (3)Sales results for seven week holiday period beginning the week prior to Thanksgiving through the end of the week following Christmas (4)Represents estimates calculated based on mid-point of updated 04 guidance provided on January 6, 2011. 9.5% 2010 Full Year Highlights (4) 2010 9#10Well 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: Annual Comparable Store Sales Growth: ULTA BEAUTY 3-4 Yr. Target 15% - 20% 3% - 5% 10#111,000 Store Opportunity with Proven National Concept . 0 # • D 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 Expansion · Increased Square Footage Growth to 13%, or 47 Stores, in 2010 Targeting 15% in 2011 Expect Long Term Square Footage Growth of 15% to 20% Note: Store data as of January 6, 2011. Stone (ULTA 389 Stores in 40 States 11 BEAUTY 12 12 De 1 NO 6 11#12Potential for 1,000 Stores • Early Phase of Store Expansion Analytically Derived Using Loyalty Data 1,000 Locations Identified That Meet Our Strict Criteria Store Potential 2,000 1,500 1,000 500 1,500 73% BED BATH & BEYOND 1,450 82% BEST BUY 1,230 Source: Public filings, company transcripts, and Wall Street research. 93% PETSMART =% Penetration 1,000 39% (ULTA V Store Potential 800 64% DICK'S SPORTING GOODS ma cha mapana na mama da man da ULTA BEAUTY 720 100% BARNES & NOBLE 12#13Continue Growth in New Products, Services and Brands . # Category Lends to Continuous Product / Brand Innovation and Newness Salon Services Opportunity in a $44 Billion Services Market Ojon™ Hair pürminerals 2007 Juut dermalogica EXTEN Fekkai NICK CHAVEZ stila Bare Escentuals Proven Ability to Add New Brands 2008 2009 PUREOLOGY serious colour care Ed Hardy Fragrance Lò RA: OSCAR BLANDI Benefit benefit KORRES tarte COSMEDICINE™ PHYTO CARGO philosophy Pioneering Innovative In-Store "Brand Boutique" Dermalogica dermalogis (ULTA BEAUTY 10th wenky 2010 bliss Hydroxatone BROCATO philosophy Philosophy 13 ليا#14Enhance Successful Loyalty Program (ULTA 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 Online for Cash Discounts on Purchases Provides a Robust Database of Customer Information and Shopping Behavior for CRM Applications " · 10 Provides Significant Opportunity for Segmentation Based on Customer Behaviors Facilitates Tailored, One-On-One Marketing Initiatives to Customers Long Term Opportunity BEAUTY THE Club AT ULTA BEAUTY ULTAmate rewards 14#15Broaden Marketing Channels 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 (ULTA ww $35 ULTA OPI FEN ULTA 5. 10 F (UITA 20offentire 3 201 SPRING National Print MICHES UPS ULTA VANITY FAIR InStyle VOGUE GLAMOUR marie claire allure Pesxgram The Aface Digital Media LULTA Pod Search Fac ULTA BEAUTY Broadcast Bravo cu Hallmark NETWORKS food abc NBC Fox style TLC ие tbs very funny E VIT TNT SOAP Usa oxygen network CBSO 15#16Increase Focus on Ulta.Com Growth (ULTA education beauty content center Test Drive Hybrid- Foundation, That is Um featured articles What Have You GottoHide? 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Te so baie se haga d MAKEUP SKINCARE FRAGRANCE BATH & BOOK HARCARE TOOLS MEN GIFTS dermalogical buona $20 gift $46 Mario Badescu Acne oportering you to get proc oung door and healthy. bareMinerals $2950 A$42 VALUE NEW Danewineras ning A Spor Hey 2000 P By SEGNAL NHING WA cross chanel support email support of store offers & events MENYA pat va madai ya ULTA Top Picks SMAL HA Comporter ALTA, pa v Sydaki www.b wer ni 134 JY HE Baran SPT Page smashbox CSEMETER presents Lalified IN BLOOM SPRING 2011 HE IN BLOOM new features quickiew for faster checkout SAREESCENTUALE F ULM SELECT OPTION Palun Borge your taga Therm Excurtain B P a Barted Kin brand videos IN BLOOM PETAL Digital Sales and Marketing has Tremendous Runway: · . · BEAUTY • Enhanced Customer Engagement Dual Purpose: Drive Online Revenue and Support Multi- Channel Business Extension of Marketing and Prospecting Strategies . Expand E-Commerce Sales (Low Single Digit Penetration) Increasing Focus on Investment in ULTA.Com Development: • Delivery of Entertainment and Educational Functionality On Site ▪ Mobile Commerce Assortment Expansion 16#17Three to Four Year Financial Targets (ULTA Annual Square Footage Growth: Annual Comparable Store Sales Growth: Operating Margins: Annual Net Income Growth: Return on Equity: BEAUTY 15% - 20% 3% - 5% Low Double Digits 25% - 30% 20% -22% 17#18Incremental Earnings Growth Through Margin Expansion Gross Margin SG&A # Merchandising Productivity Improvements - Demand Planning and Forecasting, Promotion/Management and Business Planning Tools • Store Level Operating Leverage from Same Store Sales Growth i Supply Chain Efficiencies - Automated Material Handling Technology and Equipment, Labor Management Tools and Network Design Leverage Corporate Operations · @ Increased Use of Process Automation Technology Expanding Store Base . Marketing Program Leverage Existing Print Media More Efficient One-to-One Marketing Store Operations - Engineered Processes and Automation Technology ULTA BEAUTY Operating Margin Expansion: Annual Net Income Growth: Estimate 2010 8% (1) (1) Represents estimate calculated based on mid-point of updated Q4 guidance on January 6, 2011. 3-4 Yr. Target Low Double Digit 25% - 30% 18#19Increasing Returns & Self-Funded Growth (ULTA New Store Model Economics Net Working Capital Efficiencies Self- Funded Growth . H N Proven Disciplined Investment Strategy for New Store Program Lower Up-Front Investment Costs Shorter Payback Period Reduced Average Inventory per Store by 12.9% in 2009 Without Impacting Customer Experience Projected 3% to 5% Average Inventory per Store Reduction in 2010 Further Inventory Efficiencies Through Increasing Use of Technology Debt-Free Balance Sheet Strong Cash Flow From Operations No Need for Additional Equity $200M Credit Facility Through 2013 Return on Equity: (1) Cumulative store level EBITDA divided by total new store investment. 2009 15% Cumulative Cash-on-Cash Return(¹) 95% Year 3 2008 Store Model 14.7% $106 2008 2008 NWC as % of Net Sales BEAUTY 3-4 Yr. Target 20 - 22% 50 144% Year 3 2009 Forward Store Model 2009 Total Debt ($ in millions) Total Debt 11.2% 2009 50 Q3 2010 19#20Why Invest in ULTA? # # · # 1 ULTA BEAUTY 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 Experience, Driving Market Share Gains Talented, Experienced Team in Place to Continue to Deliver Strategies Strong Operating Cash Flow Enabling Self-Funded Growth Well Defined Growth Strategies Targeting 25-30% Annual Net Income Growth (Calculated based on estimates using the mid-point of updated Q4 guidance provided on January 6, 2011. 20