Balance Sheet: Liabilities and Stockholders’ Equity
The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.
Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.
Ulta Beauty Inc., consolidated balance sheet: liabilities and stockholders’ equity
US$ in thousands
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 financial data reveals notable trends in liabilities, equity, and overall financial structure over the six-year period analyzed:
- Current Liabilities
- Current liabilities show a steady increase from $642.2 million in 2018 to $1.68 billion in 2023. Key components such as accounts payable and accrued payroll, bonus, and employee benefits contributed significantly to this growth. Accounts payable rose consistently each year, reaching $559.5 million by 2023. Similarly, accrued payroll and related benefits nearly doubled over the period, indicating growing obligations to employees. Deferred revenue also expanded considerably, suggesting increased customer prepayments or advances.
- Accrued Liabilities
- Accrued liabilities increased almost 2.3 times from $189.2 million in 2018 to $444.3 million in 2023, reflecting heightened short-term obligations. The surge was supported by accrued payroll, accrued taxes, and other accrued liabilities. The introduction of accrued capital expenditures and accrued advertising liabilities starting in 2022 further underscores growing operational spending commitments.
- Operating Lease Liabilities
- Current operating lease liabilities, not reported until 2020, have increased steadily, reaching $283.3 million in 2023. Non-current operating lease liabilities, also first reported in 2020, showed a slight decline from $1.7 billion to approximately $1.62 billion by 2023. This suggests stable commitments on long-term leased assets with some reduction in scale or renegotiation over time.
- Long-term and Total Liabilities
- Long-term liabilities more than tripled from $492.3 million in 2018 to peaks around $1.82 billion in 2020 before slightly declining and stabilizing near $1.73 billion in 2023. Total liabilities followed a similar pattern, surging from $1.13 billion to over $3.41 billion. The 2020 jump aligns with the initial recognition of significant lease liabilities, impacting long-term obligations substantially.
- Stockholders’ Equity
- Stockholders’ equity generally increased from $1.77 billion in 2018 to about $2 billion in 2021, followed by a sharp decline to $1.54 billion in 2022 before rebounding to nearly $1.96 billion in 2023. The drop in retained earnings in 2022—from $1.19 billion to $653 million—largely contributed to the equity reduction, partly offset by increased additional paid-in capital. Treasury stock acquisitions grew consistently, meaning more shares were repurchased, reducing equity.
- Total Assets
- Total liabilities and stockholders' equity combined indicate total assets trends. These rose steadily from $2.91 billion in 2018, peaked at approximately $5.09 billion in 2021, slightly declining to $4.76 billion in 2022, before increasing again to $5.37 billion in 2023. The variations reflect the shifting balance between liabilities and equity.
- Deferred Income Taxes and Other Long-term Liabilities
- Deferred income taxes initially grew until 2020 but then declined sharply before a moderate rise in 2023, suggesting changes in tax positions or timing differences. Other long-term liabilities steadily increased over the period, reflecting growing non-operational obligations possibly linked to financing or contingent liabilities.
In summary, the financial data presents a pattern of expansion in both current and long-term liabilities, with significant influence from operating lease commitments starting in 2020. Current liabilities nearly tripled, driven by rising payables and accrued expenses. The sharp increase in total liabilities outpaced the growth in equity, although equity levels showing resilience with some volatility, particularly in 2022. The substantial repurchase of treasury stock indicates an active capital management strategy. The overall increase in total assets corresponds with the company's expanded liability and equity base, indicating growth in scale alongside increased financial obligations.