Stock Analysis on Net

Ulta Beauty Inc. (NASDAQ:ULTA)

$22.49

This company has been moved to the archive! The financial data has not been updated since August 24, 2023.

Analysis of Property, Plant and Equipment

Microsoft Excel

Property, Plant and Equipment Disclosure

Ulta Beauty Inc., balance sheet: property, plant and equipment

US$ in thousands

Microsoft Excel
Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Equipment and fixtures
Leasehold improvements
Electronic equipment and software
Construction-in-progress
Property and equipment, gross
Accumulated depreciation and amortization
Property and equipment, net

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).


The analysis of the annual property, plant, and equipment data reveals several noteworthy trends across the reporting periods.

Equipment and Fixtures
There is a consistent upward trend in the value of equipment and fixtures, increasing from approximately $835 million in early 2018 to about $1.15 billion by early 2023. The growth appears steady, indicating ongoing investment or acquisition in this category over the years.
Leasehold Improvements
This category shows a generally increasing pattern, rising from about $706 million in 2018 to nearly $856 million in 2023. However, the values fluctuate modestly, with a slight dip observed in 2021 before resuming growth. This may reflect maintenance or upgrades aligned with leasing arrangements.
Electronic Equipment and Software
Electronic equipment and software investments steadily increase from $485 million in 2018 to approximately $663 million in 2023. There is a gradual rise each year except for a minor decline between 2021 and 2022, followed by a recovery in 2023, suggesting continuous but cautious expansion in this area.
Construction-in-Progress
Values for construction-in-progress fluctuate significantly across the periods, starting at $122 million in 2018, dropping to about $51 million in 2019, then varying annually before peaking at $196 million in 2023. This variability indicates active development projects at different stages, with heightened activity in the latest year.
Property and Equipment, Gross
The gross property and equipment value exhibits steady growth from roughly $2.15 billion in 2018 to approximately $2.86 billion in 2023. The increase reflects cumulative investments in all property, plant, and equipment categories combined.
Accumulated Depreciation and Amortization
Accumulated depreciation and amortization consistently rise in magnitude (noting they are recorded as negative values), from approximately -$959 million in 2018 to about -$1.85 billion in 2023. This trend is expected with aging assets and ongoing depreciation expense over time.
Property and Equipment, Net
The net property and equipment value initially grows from around $1.19 billion in 2018 to slightly over $1.22 billion in 2019, then declines noticeably in subsequent years to approximately $995 million in 2021 and further to $914 million in 2022. An upward correction is observed in 2023, with net values increasing to about $1.01 billion. This decline and partial recovery suggest significant asset retirements, impairments, or reclassifications followed by new investments or capitalization of assets.

Overall, the data indicate ongoing investments and asset additions, particularly in equipment and fixtures as well as electronic equipment. The fluctuations in construction-in-progress and net property values point to dynamic asset management activities, possibly reflecting capital projects completion and updates in accounting estimates or asset life assessments. The steady increase in accumulated depreciation aligns with the growing asset base and the passage of time.


Asset Age Ratios (Summary)

Ulta Beauty Inc., asset age ratios

Microsoft Excel
Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Average age ratio

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).


The analysis of the average age ratio for the property, plant, and equipment over the examined periods reveals a consistent upward trend from February 3, 2018, through January 29, 2022. The ratio increased from 44.64% in 2018 to a peak of 65.27% in 2022. This indicates that on average the property, plant, and equipment assets are aging, suggesting fewer recent acquisitions or upgrades relative to the accumulated depreciation over these years.

Between January 29, 2022, and January 28, 2023, there is a slight decline in the ratio to 64.75%, which may imply a modest renewal or addition of assets that slightly lowered the average age. Nonetheless, the overall trend over the six-year period is an increasing average age ratio, reflecting an aging asset base.

The rising average age ratio could have several implications. It may indicate potential upcoming capital expenditures needed to replace or upgrade aging assets to maintain operational efficiency. Additionally, aging assets may affect depreciation expenses and book values, possibly impacting the company's balance sheet and future investment strategies.

Trend over time
Consistent increase in average age ratio from 44.64% in 2018 to 65.27% in 2022, followed by a slight decrease to 64.75% in 2023.
Implications
Indicates aging property, plant, and equipment assets, potentially increasing the need for asset renewal or replacement investments.
Recent changes
Minor reduction in average age ratio in the last period may point to some new asset additions or replacements.

Average Age

Microsoft Excel
Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Selected Financial Data (US$ in thousands)
Accumulated depreciation and amortization
Property and equipment, gross
Asset Age Ratio
Average age1

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

2023 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ Property and equipment, gross
= 100 × ÷ =


Accumulated Depreciation and Amortization
There is a consistent upward trend in accumulated depreciation and amortization over the examined periods. Starting from approximately 959 million USD in early 2018, this figure increased steadily each year, reaching around 1.85 billion USD by early 2023. This rising pattern suggests ongoing usage and aging of property and equipment assets, as well as continuous depreciation charges recorded annually.
Property and Equipment, Gross
The gross value of property and equipment shows a general increasing trend from about 2.15 billion USD in early 2018 to approximately 2.86 billion USD by early 2023. Notably, the growth rate decelerated between early 2020 and early 2021, indicating a period of stabilization or limited capital expenditure. Following this, an uptick in asset additions is observed from early 2022 to early 2023.
Average Age Ratio
The average age ratio, expressed as a percentage, has steadily increased from 44.64% in early 2018 to a peak of 65.27% in early 2022, before a slight reduction to 64.75% by early 2023. This suggests the asset base is aging, implying fewer new additions relative to older assets or longer asset retention periods. The slight decrease in the last period may indicate some asset renewal or replacement activity.
Overall Insights
The financial data indicate a maturing asset base characterized by increasing accumulated depreciation and aging assets. While the gross property and equipment value generally grows, the slowing growth and rising average age ratio point to a cautious or selective investment in new assets during the middle years. The minor reduction in the average age ratio towards the latest period suggests a recent focus on asset renewal or modernization efforts.