Name: Ulta Beauty Inc. (NASDAQ:ULTA) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Ulta Beauty Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Net income	1,242,408)	985,837)	175,835)	705,945)	658,559)	555,234)
Depreciation and amortization	241,372)	268,460)	297,772)	295,599)	279,472)	252,713)
Non-cash lease expense	301,912)	276,229)	268,071)	278,820)	—)	—)
Long-lived asset impairment charge	—)	—)	72,533)	—)	—)	—)
Deferred income taxes	15,653)	(25,666)	(24,008)	5,503)	34,080)	(27,095)
Stock-based compensation expense	43,044)	47,259)	27,583)	25,045)	26,636)	24,399)
Loss on disposal of property and equipment	6,688)	5,358)	6,827)	5,850)	2,885)	7,518)
Receivables	34,260)	(40,573)	(53,772)	(20,637)	(36,387)	(11,088)
Merchandise inventories	(104,233)	(331,003)	125,486)	(79,372)	(122,019)	(152,449)
Prepaid expenses and other current assets	(19,432)	(3,412)	(4,363)	9,289)	(39,450)	(10,045)
Income taxes	(45,182)	(35,652)	58,916)	610)	(29,609)	3,641)
Accounts payable	8,309)	66,156)	62,324)	9,993)	78,256)	66,240)
Accrued liabilities	48,249)	58,598)	58,599)	28,183)	29,265)	(30,695)
Deferred revenue	41,098)	79,196)	36,848)	38,481)	50,684)	67,586)
Operating lease liabilities	(324,500)	(303,914)	(297,513)	(256,910)	—)	—)
Deferred rent	—)	—)	—)	—)	27,064)	41,725)
Other assets and liabilities	(7,731)	12,392)	(783)	54,894)	(3,309)	(8,318)
Change in operating assets and liabilities	(369,162)	(498,212)	(14,258)	(215,469)	(45,505)	(33,403)
Adjustments to reconcile net income to net cash provided by operating activities	239,507)	73,428)	634,520)	395,348)	297,568)	224,132)
Net cash provided by operating activities	1,481,915)	1,059,265)	810,355)	1,101,293)	956,127)	779,366)
Purchases of short-term investments	—)	—)	—)	(110,000)	(386,193)	(330,000)
Proceeds from short-term investments	—)	—)	110,000)	—)	506,193)	240,000)
Capital expenditures	(312,126)	(172,187)	(151,866)	(298,534)	(319,400)	(440,714)
Acquisitions, net of cash acquired	—)	—)	(1,220)	—)	(13,606)	—)
Other investments	(2,458)	(4,297)	(5,665)	(62,946)	(2,101)	—)
Net cash used in investing activities	(314,584)	(176,484)	(48,751)	(471,480)	(215,107)	(530,714)
Proceeds from long-term debt	—)	—)	800,000)	—)	—)	—)
Payments on long-term debt	—)	—)	(800,000)	—)	—)	—)
Repurchase of common shares	(900,033)	(1,521,925)	(114,895)	(680,979)	(616,194)	(367,581)
Stock options exercised	46,011)	40,386)	12,229)	43,780)	13,121)	16,190)
Purchase of treasury shares	(6,992)	(15,677)	(3,353)	(9,540)	(6,141)	(4,243)
Debt issuance costs	—)	—)	(1,915)	—)	—)	(583)
Net cash used in financing activities	(861,014)	(1,497,216)	(107,934)	(646,739)	(609,214)	(356,217)
Effect of exchange rate changes on cash and cash equivalents	—)	(56)	56)	—)	—)	—)
Net increase (decrease) in cash and cash equivalents	306,317)	(614,491)	653,726)	(16,926)	131,806)	(107,565)
Cash and cash equivalents at beginning of year	431,560)	1,046,051)	392,325)	409,251)	277,445)	385,010)
Cash and cash equivalents at end of year	737,877)	431,560)	1,046,051)	392,325)	409,251)	277,445)

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 cash flow profile indicates a strong capacity for operational cash generation, characterized by a general upward trajectory in net income and operating cash flow over the six-year period, despite a notable contraction during the 2021 fiscal year. The company consistently generates sufficient cash from its core operations to fund both capital expenditures and aggressive shareholder return programs.

Operating Cash Flow Trends: Net income experienced significant growth, rising from 555,234 thousand US$ in 2018 to 1,242,408 thousand US$ in 2023. A sharp decline occurred in the year ending January 30, 2021, where net income fell to 175,835 thousand US$, followed by a robust recovery. Net cash provided by operating activities mirrors this trend, peaking at 1,481,915 thousand US$ in 2023. The introduction of non-cash lease expenses starting in 2020 suggests a shift in accounting treatment or lease structure, adding significant non-cash add-backs to the operating cash flow.
Working Capital Management: Fluctuations in merchandise inventories have had a material impact on cash flows. A significant cash outflow of 331,003 thousand US$ for inventories was recorded in 2022, while 2021 saw a cash inflow of 125,486 thousand US$, indicating volatile inventory cycle management. Change in operating assets and liabilities consistently exerted downward pressure on cash flows, particularly in 2022 and 2023.
Investing Activities and Capital Expenditure: Capital expenditures have remained a consistent use of cash, though the intensity varied. Spending peaked in 2018 at 440,714 thousand US$ and reached a low of 151,866 thousand US$ in 2021 before increasing again to 312,126 thousand US$ in 2023. Overall, net cash used in investing activities has decreased from 2018 levels, suggesting a more moderated approach to physical expansion or asset replacement in recent years.
Financing Strategy and Shareholder Returns: The company maintains a highly aggressive capital return strategy, primarily through the repurchase of common shares. Repurchase activity peaked in 2022 at 1,521,925 thousand US$, significantly exceeding the net cash provided by operating activities for that year. Financing activities are consistently negative, reflecting a preference for returning value to shareholders over accumulating long-term debt. A temporary liquidity event occurred in 2021 with the simultaneous issuance and payment of 800,000 thousand US$ in long-term debt, resulting in a neutral net impact on the year-end balance.
Overall Liquidity Position: The cash and cash equivalents balance has fluctuated, ending at 737,877 thousand US$ in 2023. The volatility in the ending cash balance is primarily driven by the timing of large-scale share repurchases and the recovery of operating cash flows post-2021.

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