Leaving a positive legacy for our world - 2020 ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT
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leaving a positive legacy for our world 2020 ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT
We use the
po w er o f b e au t y
to improve lives,
strengthen communities
and enhance the world
around us.
CEO Message 4 Community 23
TABLE OF Introduction 5 Environment 28
CONTENTS People 9 SASB Index 33
Product 16
the possibilities are beautiful.® 2
Who we are
Mission
Every day, we use the power of beauty to bring to life the
possibilities that lie within each of us—inspiring every guest
and enabling each associate to build a fulfilling career.
Vision
To be the most loved beauty destination of our guests and
the most admired retailer by our Ulta Beauty associates,
communities, partners and investors.
Values
We work toward our mission and vision with our values at the
heart of everything we do.
> Give wow experiences
> Improve always
> Win together
> Love what you do, own what you do
> Do what’s right
> Champion diversity
OUR FOOTPRINT (as of 10/31/2020) FISCAL 2019 NET SALES BY CATEGORY
1,262 6 13.2 million 25,000+ Cosmetics 50% 5%
4%
stores distribution total store products in store XX% Skincare, bath
centers square footage and fragrance 22% 19%
50%
Haircare products
and styling tools 19%
500+ $7.4 billion 50 35,000+ Services 5%
22%
brands offered in fiscal 2019 states associates Other 4%
net sales
the possibilities are beautiful.™ 3
CEO MESSAGE
What a positive legacy
means to us
Over the past 30 years, Ulta Beauty has earned our Another point of pride is our long tradition
reputation as the most admired beauty retailer by of being a diversity-forward company. In
our guests, associates and investors. And after a my seven years as CEO, we’ve worked hard
year like 2020, it’s worth reflecting on our company’s to represent the wonderful diversity of our
role at this moment in history. While our lives have communities in everything we do, from our
been disrupted in so many ways, we believe in the marketing communications to our brand
power and possibility of beauty more than ever partnerships and our team of associates. As
before. During this uncertain time, beauty provides the events of 2020 showed us, systemic racism
happiness, hope and renewal, helping us feel a is pervasive in so many aspects of our society.
little bit like ourselves again. While we have long been aware of and worked to
counteract this harmful legacy, broader awareness
But Ulta Beauty aspires to be known not only for and calls to action in 2020 have sharpened our
providing all things beauty to our guests. We also focus on these issues. Now, we’re working to
want to leave a positive legacy on our world through accelerate our actions in this space and continue
environmental and social impacts. Though we are to be an authentic leader of diversity and inclusion
in the early stages of our sustainability journey in corporate America.
and environmental, social and governance (ESG)
disclosure, operating our business in a responsible Improving the lives of women and families in our
manner and doing the right thing for one another has communities is another enduring focus. Reflecting
always been part of who we are as an organization. this commitment, as of the end of October 2020, we
Over the past year, we have worked to bring together raised more than $37 million to benefit life-changing
our ongoing efforts and track our achievements research at the Breast Cancer Research Foundation®,
across four focus areas—People, Product, Community which we have supported for more than a decade,
and the Environment—so we can more formally and donated more than $1 million to support the
share our ESG strategy with you. We are pleased efforts of Save the Children® in rural communities.
to share our progress in each of these areas in this
inaugural ESG report. The COVID-19 pandemic has brought challenges and
tragedies unlike any we’ve ever faced. Throughout
One of the accomplishments we are extremely this crisis, Ulta Beauty associates, especially in our
proud of is the launch of Conscious Beauty at stores and distribution centers, have continued to
Ulta Beauty™, a first-of-its-kind initiative that will show incredible agility, creativity and commitment
inspire more informed, conscious product choices to the health and safety of our guests and one
for guests, their loved ones and the environment. another. I want to thank my leadership team and all
Through this program, we will provide transparency of our associates for not only caring for themselves
around brands that use clean ingredients in their and each other this year, but also helping shape
products, as well as whose products are cruelty the positive legacy that Ulta Beauty will leave on
free, vegan, use sustainable packaging and have a the world well into the future. We look forward to
positive impact in communities—all practices that continuing to update you on our progress.
we know matter to our guests. With the introduction
of Conscious Beauty at Ulta Beauty™, we also
announced a sustainable packaging commitment that
will align with other company initiatives to conserve
resources and protect the environment. Mary Dillon
Chief Executive Officer
the possibilities are beautiful.™ 4
INTRODUCTION 2020 ESG REPORT
ESG at Ulta Beauty
We believe beauty makes the world a better place. That’s why
the strategic focus of our ESG work is leaving a positive legacy
for our world.
Our ESG priorities are aligned with and are part of our overall business strategy. This
work is focused on four key pillars, which contribute to a positive legacy through the
people we employ and guests we serve, the products we offer and the impact we
have on the environment and on communities.
PEOPLE
We want all associates to feel that they belong at Ulta
Beauty and can be their true, authentic selves
PRODUCT
We empower guests to make informed choices about Board oversight
the products we offer Ulta Beauty’s Board of Directors and the Audit Committee oversees issues of
Executive Team have overall oversight cybersecurity and data privacy.
and accountability for sustainability
within the organization. The Board has Our General Counsel is the executive
COMMUNITY three committees—Nominating & sponsor of our ESG program and works
We improve the lives of women and families Corporate Governance, Compensation with a cross-functional team of experts,
in our communities and Audit—each of which touches ESG including representatives from human
issues in its own way. The Nominating & resources, growth and development,
Corporate Governance Committee has supply chain, merchandising and store
primary responsibility for our ESG policies operations, who drive ESG strategy
ENVIRONMENT and practices, as well as associated risks. across the four pillars. In addition, we
We want to maintain the beauty of our environment Our Compensation Committee has have many associates who are passionate
and minimize our impact on the world around us oversight of diversity and inclusion, and about ESG topics.
the possibilities are beautiful.™® 5
INTRODUCTION 2020 ESG REPORT
Corporate governance
Strong corporate governance allows us to deliver value for
shareholders. We do this with a diverse and engaged Board
of Directors and leadership team who contribute a variety
of experiences and perspectives.
DIRECTORS BY RACE
Our Board is composed of independent regular management updates on our
directors who bring a wide variety of business operations, financial results 18%
7.3 years
expertise and leadership to help guide and strategy. The Board then discusses directors’ average
our CEO, who is also a director, and and provides guidance with respect 82% tenure
White 82%
our management team. to risks related to those topics. Since Black 18%
relaunching an enhanced enterprise risk
Board diversity management (ERM) program in 2016, we 62 years
One of the things that makes the have successfully raised and improved
directors’ average age
Ulta Beauty Board of Directors uniquely risk awareness across the organization.
effective is its diversity, particularly gender
diversity—55% of our Board members In addition to sharing ERM results with
are women. We are also proud to have our Board and leadership, we also share DIRECTORS BY GENDER
Board members who are racially diverse Learn more about our
feedback with participating associates,
and one member who identifies as business and governance:
who appreciate knowing their input is
LGBTQ+. Regular refreshment of our making a difference. We take a practical > Overview for Investors
Board helps us incorporate new ideas and approach that incorporates the input of > Board of Directors listing
Women 55% 55%
perspectives, and 36% of our directors associates at all levels of the company, > Board Committee composition
Men 45% 45%
joined the Board within the last five years. with special emphasis on the in-store and > Governance documents
distribution center associates who know > Investor FAQs
Risk management our guests and operations best. Through
Our Board provides guidance and this process, we engage approximately
oversight on risk management activities 150 associates per year. We are increasingly
and processes across the company. To using technology to improve our approach,
ensure understanding of the risks we such as facilitating live voting and real-time
face as an enterprise, the Board receives data analysis of results.
the possibilities are beautiful.® 6
INTRODUCTION 2020 ESG REPORT
Data stewardship
We value our guests and associates and the data they entrust to us, and
treat their information and other financial data with care and respect.
We manage data security and privacy at company. We safeguard this data by
the highest levels. Our Board of Directors monitoring and complying with all privacy
has always actively engaged in oversight of laws. In addition, we don’t sell guest data,
cybersecurity, and we recently highlighted and we share aggregated and anonymized
this formal oversight role in the charter data with our brand partners and
of our Audit Committee. Our CEO keeps third-party vendors for our own use.
the Board informed on a wide variety of
cybersecurity and privacy matters via Oversight and enablement
monthly reporting, regular reports in Our Security and Network Operations
the Audit Committee and full Board Center (SNOC) constantly and proactively
discussions throughout the year. monitors our network and application
landscape for threats and anomalies. We
Ulta Beauty’s General Counsel also serves have established processes for sharing data
as our Chief Privacy Officer, and works and performing third-party risk assessment.
closely with our internal data stewardship Other recent improvements include
committee, including our Chief Information disaster recovery planning and testing.
Officer and our IT Risk Management team,
to ensure we take a holistic approach to Security
caring for guest, associate and financial All Ulta Beauty associates have a role as
data. Data stewardship includes three stewards of company data, and it’s essential
primary focus areas: that we educate them on how to keep data
safe. As part of our annual Code of Business
lta Beauty
Personalization and privacy Conduct training, we train associates on
All U tes have
ia
assoc stewards
As a retailer, we use data to drive how to keep devices and data safe in public
demand via targeted marketing, develop places; how to avoid security threats and
as
merchandise insights and strategies, phishing scams; how to maintain a secure
a role ur data.
of o
support member recognition through our workplace; and everyday practices that
loyalty program and provide guest insights help maintain the security of corporate
to drive business objectives across our digital devices, data and systems. Our
security approach also includes multiple
layers of defense and testing of controls.
the possibilities are beautiful.® 7
INTRODUCTION 2020 ESG REPORT
Ethics & compliance
It’s not only our products and services that make us the most loved
beauty destination—it’s also the way we conduct business. Integrity
inspires our actions and strengthens our reputation with guests,
associates, communities, partners and investors.
The Ulta Beauty Code of Business > S peaking with one’s own manager or
Conduct helps us work ethically and another manager
transparently in support of our mission, > Speaking to a Human Resources (HR)
vision and values. All associates, officers Business Partner
and members of our Board of Directors > Contacting the We Care! Let’s Talk
are expected to act in accordance with the line, by email or phone
Code of Business Conduct. It is included
in new hire materials for all associates,
> Calling our third-party Ethics Hotline
anonymously online or by phone
Ulta Beauty Ethics &
Compliance Policies
who must read and acknowledge this > Emailing Legal Services to reach our
policy each year. We also maintain Ulta Chief Compliance Officer
Vendor Standards, which are shared
with, and outline our expectations of, Our Ethics Hotline is managed by HR, but > Americans with Disabilities Act Policy
all Ulta Beauty vendors. These cover our General Counsel and Chief Compliance > Anti-Harassment Discrimination Policy
the ethical conduct and social and Officer also reviews all concerns. Each > Confidentiality Policy
environmental compliance standards that quarter, a cross-functional team meets to > Employment-At-Will Policy
are required of a responsible workplace. discuss reporting trends and share status > Ethics and Business in Business Transactions Policy
of investigations and outcomes. The most > Inappropriate Relationship Policy
The Code of Business Conduct provides commonly reported concerns are general > Insider Trading Policy
guidance on topics including diversity HR-related matters. > Official Government Inspections Policy and Procedure
and inclusion, employee relations, fair > Open Door Policy
competition, human rights, community We continually improve our approach to > Privacy Policy
involvement, environmental protection compliance through the Ulta Compliance > Ulta Beauty Gift & Gratis Policy
and more. We encourage associates to Network (UCN). UCN is a group of
speak up to report any violations of the associates who regularly focus on
Code of Business Conduct. There are compliance. The group meets quarterly
several ways to report a concern: and provides a way for these associates
to share best practices, discuss challenges
and identify useful tools or resources.
the possibilities are beautiful.® 8
people
We want all associates to
feel that they belong at
Ulta Beauty and can be
their true, authentic selves.
Inclusive teams.
82% of associates say their teams create a
diverse and inclusive working environment
A place to learn and grow.
A majority of promotions are internal
Being exactly who you are.
6,000+ women elevated to management
roles in the past five years
the possibilities are beautiful.® 9
PEOPLE 2020 ESG REPORT
Beauty from the inside out
Our Ulta Beauty Culture
There’s no place quite like Ulta Beauty. We’re on a mission to use the
power of beauty to bring out the possibilities within every person, and
that work begins with our associates. While we are diverse in so
many ways, our people share a passion for redefining beauty and
retail—and a desire to build fulfilling careers.
The associate experience is grounded Annually, we receive feedback from deeper on specific topics. In 2020, the We build upon and reinforce our culture
in our mission, vision and values. the majority of our associate base survey and roundtables zeroed in on our at every level. Our CEO Mary Dillon
We work as a team to give “wow” (approximately 78%) and follow a specific COVID-19 response and diversity and and other executives regularly make
experiences to our guests, in service of process to make changes based on those inclusion work. We were pleased to themselves available for open dialogue
our vision of becoming the most loved insights. Our results often put us in the discover that 75% of associates surveyed in a variety of forums, including Town
beauty destination and the most top global quartile of companies surveyed feel supported at Ulta Beauty, even amid Halls, store and distribution center visits,
admired retailer. for associate engagement globally. We the shifts and challenges of the past year. special small group gatherings and more.
also hold roundtable sessions to dive
We don’t take our strong culture for
granted. As a guest-centric company, we
put a special focus on the experiences and
feedback of our in-store associates—
those who know our guests the best. “Without question, 2020 has reinforced the power of building a highly
We regularly conduct an associate engaged, diverse culture. Our long-term commitment to creating an
engagement survey to take the pulse of environment where all associates feel they belong and all perspectives
associates’ satisfaction with their role, are valued is a focus for us as we do what’s right—for our people and
their leader and the company as a whole. our business. Diversity is a cornerstone of Ulta Beauty and will continue
to set the tone for how we operate, grow and collaborate, in good times
and challenging times alike.”
Dave Kimbell, President, Ulta Beauty
the possibilities are beautiful.® 10PEOPLE 2020 ESG REPORT
Growing with us
Given our value of Improve Always, unexpected benefit of allowing us to
ongoing training is an important part reach more associates than ever before.
of the associate experience. And there’s
Training & development always something new to learn. For Our leadership development programs
example, in-store associates use a digital prepare promising future leaders for
workplace tool for microtraining on new new levels of responsibility. Each year,
product lines, sales skills and, this past we organize a training program that
year, COVID-19 safety practices. focuses on high-potential talent at the
Ulta Beauty offers inspiring career paths for professionals at every level. director level and above. In 2019, we
The Ulta Beauty work experience is rolled out a new program through which
We provide opportunities to gain new expertise not only through
challenging, rewarding and fun. Associates officers mentor high-potential directors,
traditional training programs, but also through participation in have the opportunity to build individual with a specific focus on diverse talent.
cross-functional projects. development plans to help them work Across the company, the majority of our
toward career goals, and to use a learning promotions are internal. As we continue
management system that houses training to promote and develop from within,
We find new associates by meeting them during which all new hires learn about on role-specific skills, interpersonal skills we’re building a bench of associates
where they are. Many associates learn the company and responsibilities of and more. In 2020, even more training and leaders who know our company
about Ulta Beauty through word of mouth, each department and engage with the was delivered virtually, which had the inside and out.
but we also recruit through job postings, Executive Team. Our CEO and Executive
on campuses and online. For associates Team participate in this event.
working in salon services, we often
connect through professional platforms In-store associates take part in a structured
and licensing programs. While scaled onboarding program during which they
back in 2020, our corporate internship engage in learning on specific tracks based
program is typically another source of on their role. All new store managers
promising talent. participate in a customized, role-based
training program known as Ultamate
We waste no time welcoming new Pathways. Topics covered include store
associates to the Ulta Beauty team. operations, guest service expectations and
Orientation takes a variety of forms inventory control processes. Managers
across our stores, distribution centers also get a full introduction to Ulta Beauty’s
and corporate office. For corporate mission, vision and values, along with our
associates, we organize a one-day commitment to diversity and inclusion.
event called the Ultamate Foundation,
the possibilities are beautiful.® 11PEOPLE 2020 ESG REPORT
Changing how the world ULTA BEAUTY ASSOCIATES
sees beauty 8%
Diversity & Inclusion Women 92% 92%
Men 8%
As a leader in the beauty industry, we have a responsibility
to shape how the world sees and experiences beauty. Beauty
can be fun, approachable and empowering, and we’re
committed to using the power of beauty to create a more
inclusive world. EXECUTIVE TEAM
While diversity and inclusion (D&I) have head of the table. We know we have
always been part of Ulta Beauty’s DNA, an opportunity to increase representation
these beliefs informed purposeful work of people of color across Ulta Beauty, Women 50%
50% 50%
on our formal D&I program, which began particularly in leadership positions. provided associates with an opportunity Men 50%
in 2018. The program’s goal is to create Together, we’re building a workforce that to learn about and explore ways to mitigate
an inclusive environment where every reflects the available talent where we unconscious bias in their everyday lives.
associate feels they can fully contribute work, live and do business and one that In 2020, we leaned into the national
and every guest is optimally served, mirrors our guest community. conversation on race through the Race
regardless of differences. Throughout Matters series. The series featured Ulta
2020, we took specific actions to embed D&I is more than representation. It’s also Beauty leaders and included sessions on
D&I for associates and guests, through a about creating an environment where being Black in America, white privilege BOARD OF DIRECTORS
journey to learn and develop awareness, associates feel they belong and can be and allyship. Participation was required XX%
understanding and celebration. their authentic selves. A critical way we of our 8,800+ leaders, who had the option
achieve this is by educating all associates of attending a live session or completing
Leveraging the power of on the lived experiences of their peers and the training on their own. We concluded
diverse perspectives key moments in time that have cultural the experience by encouraging each Women 55% 55%
Celebrating diversity everywhere starts or heritage significance—as well as the associate to take ownership of their role Men 45% 45%
with a diverse workforce. With fifty percent unconscious beliefs and biases that shape to be an inclusive leader and colleague.
of our Executive Team made up of women, our behavior today. During fiscal year 2019, To transform these lessons into action,
we’re proud to be a place where women we welcomed the Check Your Blind Spots attendees received support materials to
aren’t only in the room; they’re at the unconscious bias tour, hosted by the CEO promote open dialogue, awareness and
Action for Diversity & Inclusion®, that greater understanding.
the possibilities are beautiful.® 12PEOPLE 2020 ESG REPORT
Diversity & Inclusion (continued)
Our D&I Champions Network also helps > lack History Month
B
us promote D&I across our daily work and > International Women’s Day
experiences. This team of enthusiastic > Asian Pacific American Heritage Month
associates has committed to promoting > Pride Month
the value and practice of a diverse > Juneteenth
and inclusive workplace by creating > Latinx Heritage Month
interactive educational experiences > National Disabilities Employment
for their peers. They also identify Awareness Month
opportunities for Ulta Beauty to engage > Coming Out Day
with communities on D&I-related work. > Veterans Day
Launched in October 2019, the network > Transgender Day of Remembrance
has approximately 100 members and has
organized numerous initiatives, including Offering beauty at its most inclusive
our celebrations of special days including: From the products and services we
offer, to the people who appear in our
> M artin Luther King, Jr. Day marketing and advertising, we’re in a
> Lunar New Year powerful position to shape society’s
meeting the moment
While Ulta Beauty’s D&I program has been underway for some time, growing
calls for action against racism and police brutality in 2020 gave this work a
special urgency. As a society, we began confronting racism and its presence
in everyday systems, and stakeholders demanded more than statements of
support from businesses. When UOMA Beauty CEO Sharon Chuter launched
Pull Up or Shut Up, challenging beauty brands to share posts on social media
disclosing the number of Black employees they have in leadership roles, we
responded quickly. Eighteen percent of Ulta’s Board of Directors, and 13% of
our Executive Team leaders, identify as Black. ULTA BEAUTY LEADERSHIP*
Knowing that our associates were also looking for ways to support the 64% 18%
movement, we announced Double Up for Justice, a special gift-matching women people of color
opportunity where the Ulta Beauty Charitable Foundation matched associate
donations to organizations dedicated to racial equality. The program ran for two *Leadership is defined as director and above.
months and supported the Equal Justice Initiative, YWCA® USA, Chicago Area
Urban League and Skills for Chicagoland’s Future.
the possibilitiesare beautiful.® 13PEOPLE 2020 ESG REPORT
Diversity & Inclusion (continued)
standards of beauty. Ulta Beauty’s goal Exploring the possibilities
is to respect and represent every guest We can’t do it all on our own. Ulta Beauty
through our words and our actions. aspires to be recognized as a D&I leader
both inside and outside the retail industry,
Services training is one way we’re putting and is engaging with communities and
our commitments into action. In 2021, we external partners to scale up our impact.
plan to equip all stylists with foundational We’re increasing our investments in
technical skills to support future plans organizations focused on addressing
in certifying our stylists in the art inequality and creating opportunity, such
of textured hair. Externally, we are as YWCA®’s Until Justice campaign as a
enhancing our multicultural marketing founding member of the Racial Justice
and communications strategies, such as League. Other opportunities we’re
amplifying BIPOC (or Black, Indigenous exploring include increasing our spend
and people of color)-owned brands, with diverse suppliers and forming
founders, creatives and artists. partnerships with influencers and brands
who share our mission and values.
In addition, we aim to ensure that all
in-store experiences are equitable, This work is a journey, and we have a
fair and unbiased. We’re taking action plan to hold ourselves accountable. Our
to support this goal by conducting D&I program is supported by a strong
mandatory trainings for in-store governance structure that keeps our work
associates and providing weekly bite- moving forward. Working groups lead our
sized learning opportunities to focus efforts to create more diverse and inclusive
on guest perspectives and reinforce recruiting and development practices,
key takeaways. We are offering similar in-store experiences and external D&I recognition
training across the organization to help partnerships. Next, we are localizing
key decision-makers and associates in this work, incorporating D&I Councils > Forbes 2019 Best Employers for Diversity
their own learning journeys and support at stores and distribution centers. > Forbes 2019 Best Employers for Women
our Champion Diversity value and > Forbes 2020 Best Employers for Diversity
inclusion competency. > Forbes 2020 Best Employers for Women
> Diversity Inc. Noteworthy Companies for Diversity
the possibilities are beautiful.® 14PEOPLE
PEOPLE 2020 ESG REPORT
Taking care of each other
Safety, wellness & benefits
Our commitment to our associates and their well-being—inside and
outside of work—is one of our highest priorities. Ulta Beauty has
carefully assembled a suite of benefits that affirms and supports
all that our associates contribute each and every day.
Well-being begins with health care for all eligible associates, which includes those who
work more than 30 hours a week for Ulta Beauty in any position. Coverage extends
to eligible dependents, including spouses, same-sex partners and children under 26. These and other benefits helped ease
Our healthcare plans are above market for retailers and other service industry companies. some of the hardships created by
Our medical plans provide above-average levels of health care coverage, with less cost COVID-19. The Ulta Beauty Charitable
share placed on associates, compared to many other retailers. We offer comprehensive Foundation maintains an Associate Relief
medical plans that empower employees to choose the coverage that best suits them. Program through which we provide
Other key benefits include: grants to associates facing unforeseen
financial setbacks. For associates who
> 01(k) plan with up to a 4% company match
4 care for children who are learning from
> Disability and life insurance home, due to the COVID-19 pandemic,
> Company-paid short-term disability pay at 80% of pay we also provided access to discounts for
> Additional insurance options, including legal, pet, home and auto online educational resources.
> Tuition reimbursement program bundles of joy
> Paid time off, including an extended illness bank Across all locations, associates receive
> Discounts on retail products and salon services instruction on how to keep themselves The Ulta Beauty family is always growing.
and guests safe. Many associates receive At any given time across our workforce, we
And because wellness, like beauty, is more than skin deep, we offer mental training that is specific to their roles—for typically have about 250 associates who
health resources, such as counseling services and access to apps; financial example, salon professionals are trained are expecting a child. We help associates
wellness planning and guidance; and health apps and educational resources in the safe handling of chemicals. celebrate and prepare for this joyful
for soon-to-be parents.
milestone with information and resources.
We also offer adoption assistance for
associates seeking to grow their families
by adopting a child.
the possibilities are beautiful.® 15product
We empower guests to
make informed choices
about the products we offer.
Limitless assortment.
25,000+ SKUs across 500+ brands
The power of choice.
Transparent information about product
ingredients—so guests can choose
what’s right for them
A clean-beauty destination.
200+ brands certified by the Conscious
Beauty at Ulta Beauty™ platform
the possibilities are beautiful.® 16PRODUCT 2020 ESG REPORT
All Things Beauty.
All In One Place. ®
We have been visionaries since day one. When Ulta Beauty was
founded in 1990, prestige, mass and salon beauty products were sold
through distinct channels. There was no single place that beauty lovers
could go to meet all of their needs. We envisioned a new specialty re-
tail concept that brought together a wide range of products, styles and
price points: offering All Things Beauty. All in One Place®.
Today, our assortment continues to reflect A copy of our Ulta Vendor Standards is
the diversity of our guests. At our stores provided to all suppliers. This document
and at ulta.com, you’ll find more than outlines our expectations for ethical
25,000 products across all categories business conduct, worker safety,
and price points, including our private environmental protection and product
label, Ulta Beauty Collection®. standards. Our supplier relations team
onboards new brands and vendors, using
webinars and other tools to educate
Product stewardship them on how to succeed with us. This
level of engagement allows us to work
Our products and services
Our breadth of products is made possible
successfully with beauty brands that PRODUCTS SALON SERVICES
by more than 500 brand partnerships.
have well-established supply chain > Cosmetics > Hair cut, color, treatment
We work closely with these partners
infrastructures, as well as up-and-coming > Fragrance and styling
to understand, not just their products,
brands that may need extra guidance. > Haircare > Lash applications
but also their businesses, so that we
> Skincare > Makeup
can curate an assortment that meets
> Bath and body products > Brow and wax services
the needs of our guests and helps
> Salon styling tools
brand partners succeed.
the possibilities are beautiful.® 17PRODUCT 2020 ESG REPORT
All Things Beauty. All In One Place.® (continued)
Ulta Beauty Collection® formulation based on our specifications
for color, fragrance and performance. helping guests shop safely in unprecedented times
Beyond our brand partners’ products, we’re The Ulta Beauty Collection® team then
proud to offer the Ulta Beauty Collection®, evaluates and provides feedback on To create safer shopping environments in stores following the outbreak of
our private label. This collection offers products and packaging, from confirming COVID-19, we followed government and health guidance and were recognized
essential products in key categories such that mascara brushes resist clumps to for our industry leadership in keeping guests safe.
as cosmetics, skincare and bath. We ensuring that pump bottles dispense just
market the collection in an engaging and the right amount of product. Our formulas In addition, we allowed guests to make purchases online for in-store pickup
approachable way to connect with our and packaging are thoroughly tested to and curbside pickup as a contactless and convenient option for guests to meet
guests and help strengthen their perception validate the product concept and ensure their beauty needs. As a result of these and other practices, Ulta Beauty was
of Ulta Beauty as a contemporary beauty it meets safety standards. named one of the top retailers in NAPCO Research’s new report, Retailer
destination and authority on all things Readiness: COVID-19 In-Store Safety Index.
beauty. These on-trend products appeal We hold our vendors to the highest of
to guests of all ages, particularly those industry standards. We expect all suppliers We collaborated with the Retail Industry Leaders Association (RILA) to share
who may not be beauty experts but are to sign a manufacturing agreement as
MOBILE (100px)
best practices across the industry. The resulting practices are known as our
MOBILE (100px)
looking for high-quality products for well as a social compliance agreement. Shop Safe Standards, and include:
everyday use. In addition, factory visits and third-party
audits are conducted to evaluate work
We manage the full development cycle practices as appropriate. Ulta Beauty
MOBILE (100px) MOBILE (100px)
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of these products in partnership with a Collection® is currently a part of the Clean Mandatory face coverings Suspension of
network of approximately 60 suppliers Ingredients and Cruelty Free pillars within for associates and guests product testers
worldwide. The process begins with the Conscious Beauty at Ulta Beauty™
MOBILE (100px) MOBILE (100px)
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product briefs that we develop based on program, with goals of being added to
our research into emerging trends and the Sustainable Packaging pillar by 2025 Visual cues to reinforce Increased protocols for
guests’ needs. We present a product brief (learn more about Conscious Beauty at social distancing cleaning and disinfecting
to a vendor, who then develops a unique Ulta Beauty™.) MOBILE (100px) MOBILE (100px)
Added safety measures Daily wellness checks
for salon services for associates
Hand sanitizer throughout
the store
the possibilities are beautiful.® 18PRODUCT 2020 ESG REPORT
A clean beauty evolution
Today’s consumers are more interested than ever in choosing products
that will support their overall health and wellness. They are also paying
attention to the connection between their personal well-being and the
well-being of workers, animals, communities and the environment.
And they are increasingly supporting brands whose actions align
with their own values.
In the beauty space, this translates As the premier destination for all things
into a desire for “clean beauty,” which beauty, Ulta Beauty is stepping into
can refer to products that have fewer this opportunity. We have long offered
ingredients and are free from potentially products that incorporate clean
harmful substances. While there is clear ingredients, ethical practices and
consumer demand for cleaner products, environmental benefits. Now, we are
there is no broadly agreed-upon creating a holistic solution that will
definition of what clean beauty really educate, guide and simplify this complex
means. Nor has there been a good way landscape for guests as they choose the
to evaluate clean ingredients alongside beauty products that meet their needs
other priorities, such as animal welfare and align to their personal values.
or environmental sustainability.
BASED ON ULTA BEAUTY CONSUMER RESEARCH:
63% 90% 75%
of those who seek out clean of Gen Z’ers intend to buy of customers wish it were
beauty products say “safer clean beauty products easier to know which
for the planet” options are over the next 12 months products are truly clean
important to them
the possibilities are beautiful.® 19PRODUCT 2020 ESG REPORT
Introducing Conscious Beauty
at Ulta Beauty.TM CLEAN INGREDIENTS
Brands whose products exclude
parabens, phthalates and other
CL
EA
ingredients on our Made Without
N
IN List, which was developed with
CT GR
PA ED consideration for the human and
IM IE
N
environmental health impact of
VE
TS
TI
ingredients. We will evolve the
SI
PO
Made Without List over time
with input from experts and
brand partners.
CRUELTY FREE SUSTAINABLE PACKAGING
Brands that do not conduct Product packaging is one of
animal testing. Our definition the most tangible and obvious
will be tied to existing cruelty-free aspects of Conscious Beauty
SUSTA
certifications, including PETA, at Ulta Beauty™ for guests. At
E
Leaping Bunny or Choose Cruelty least 50% of the packaging
INA
FRE
Free. Many of our brand partners from certified brands must
BLE
LTY
already possess these designations. be made from recycled or
PA
UE
CK
CR
biosourced materials or be
AG
recyclable or refillable.
I NG
VEGAN
Vegan is an area of importance
for many consumers today. POSITIVE IMPACT
We have adopted the standard Beauty brands give back in so
VEGAN
definition of vegan: products many ways, and we will use
that are free of animal products, this pillar to highlight brands
animal byproducts and whose philanthropic efforts
animal derivatives. are critical to their DNA.
the possibilities are beautiful.® 20PRODUCT 2020 ESG REPORT
A clean beauty evolution (continued)
How we bring Conscious Partnership
Strong partnerships through Conscious
Beauty at Ulta Beauty™ to life Beauty at Ulta Beauty™ will allow us to
evolve the program with leading experts
Certification across the space. In tandem with the
Brands are certified to the Conscious Conscious Beauty at Ulta Beauty™
Beauty at Ulta Beauty™ pillars through an launch, we are collaborating with clean
online portal powered by ClearForMe, beauty pioneer Credo® to introduce the
our strategic partner. ClearForMe is a Credo Collection at Ulta Beauty. This
leader in the clean beauty space that curated collection will feature a rotation
manages the most comprehensive of clean beauty brands, available in
ingredient database on the market, select stores and online, that will allow
and will both onboard brands into the us to continuously introduce customers
Conscious Beauty at Ulta Beauty™ to new brands.
program and support us in bringing
ingredient transparency to life for our Conscious Beauty Advisory Council
guests. To date, over 200 brands have We are also planning and expect to
been certified in one or more pillars. convene a Conscious Beauty Advisory
Council made up of a diverse set of
Education leaders at the forefront of product
The program launched in stores and development, packaging sustainability,
on ulta.com in October 2020, with more trends and insights. This forum of
than 200 certified brands. We celebrated leading beauty brands and experts
and began to educate guests, influencers will collectively evolve Conscious
and the press with virtual events and in- Beauty at Ulta Beauty™.
store endcaps made with sustainable and
recyclable materials. Training for in-store
associates will allow them to help guests
make informed choices about clean
beauty products. the beauty of giving back
Brands that do good deserve a special spotlight. That’s the purpose of
our Positive Impact pillar, which many of our brand partners, including
Kreyòl Essence, embody perfectly. The Kreyòl Essence team began
working with Haitian farmers and cooperatives in 2014 to plant 100,000
castor trees, which help reduce deforestation, soil erosion and
greenhouse gases. Kreyòl Essence has a goal of supporting 30,000
families in the next five years and cultivating over 1,000 hectares of land.
the possibilities are beautiful.® 21PRODUCT 2020 ESG REPORT
Our sustainable
packaging commitment
Sending less to the landfill means good things for the planet. According
to Zero Waste Week, the global cosmetics industry produces 120 billion
units of packaging annually. Much of that packaging is plastic, and the
majority of it is not recycled. That’s why Sustainable Packaging is a key
pillar of Conscious Beauty at Ulta Beauty™.
To qualify for our Sustainable Packaging durable, reusable containers rather than
HOW LOOP ORDERING WORKS
pillar, at least 50% of a brand’s product single-use disposables. In early 2021, we
packaging must be made from recycled will give guests the opportunity to order Ulta Beauty’s Sustainable
or biosourced materials or be recyclable their favorite products for home delivery Packaging Goal Guest shops via
an Ulta Beauty x Guest is shipped a
or refillable. To date, more than 90 brands in Loop’s waste-free containers. Loop microsite
50%
reusable container
have already qualified. These leaders
will help us meet our goal of 50% of How2Recycle
owned and non-owned brand packaging Standardized labels on Ulta Beauty
being made from recycled or biosourced Collection® products and select Ulta
of packaging sold at Ulta
materials, recyclable or refillable by Beauty print materials will educate guests
Beauty will be recyclable,
2025. This goal aligns with targets being on how best to recycle. How2Recycle’s
refillable, or made from
set by other brands and retailers, and has clear labels take the guesswork out of
recycled or bio-sourced
the potential to make a major impact on recycling, and allow us to track and
materials by 2025
our industry’s waste challenge. Several measure recyclability across our portfolio. Including both Ulta Beauty Cleaned container After use, empty
key partnerships and memberships will Collection and other brands sold is refilled to be container is
allow us to amplify our Sustainable Sustainable Packaging Coalition® (SPC) distributed again shipped to Loop
for cleaning
Packaging work: We support the SPC’s mission of making
actionable improvements to packaging
Loop systems. Through our membership, we
Loop, a reusable packaging pioneer will have the opportunity to learn from
owned by TerraCycle®, eliminates waste fellow retailers and other leaders in the
by delivering consumer products in sustainable packaging space.
the possibilities are beautiful.® 22c o mm u n i t y
We improve the lives of
women and families in
our communities.
Life-changing research.
Support for 25 researchers affiliated with
the Breast Cancer Research Foundation®
Surpassing our goals.
$1.2 million raised for Save the
Children® in just two weeks in 2020
Caring for people.
Helping 750 associates dealing with
COVID-19-related hardship through
our Associate Relief Program
the possibilities are beautiful.® 23COMMUNITY 2020 ESG REPORT
The power to
improve lives
MEET OUR NATIONAL PARTNERS
We strive to make a positive
difference in the communities ®
where we live and work. That’s
why, in 2016, we created the Ulta PARTNER SINCE 2009 PARTNER SINCE 2016 PARTNER SINCE 2017
Beauty Charitable Foundation
Works to prevent and cure breast Works to give vulnerable children Empowers women to achieve
(UBCF) to enhance the well- cancer by supporting clinical and in the U.S. and around the world economic independence by
being and education of women WHAT THEY DO translational research at medical a healthy start in life and the providing a network of support,
and families. Women make up institutions across the world. opportunity to learn. professional attire and the tools
to help them thrive in work and
the majority of our guests and in life.
our associates, and our donations
help women across the country
Our donations fund the work of We implement a program once a UBCF provides Dress for Success®
live to their fullest potential. a diverse group of researchers. year at the in-store point of sale. Worldwide with financial support,
This support covers the entire Associates also wore red in 2020 products and associate volunteer
spectrum of breast cancer to raise awareness with guests, time. We adjusted to provide
HOW WE HELP
Our philanthropic efforts began in research—from understanding and associates had the opportu- services virtually in 2020.
2009, when we began our partnership metastatic disease to identifying nity to write letters to children in
with the Breast Cancer Research new targets and treatments. vulnerable communities.
Foundation. Since then, we have
broadened our focus to support other
organizations that help women and
families thrive. We have since added
$37 million+ $2.3 million $500,000
two more national partners, Save the raised since 2009 raised since 2016 for donated since 2017
Children® and Dress for Success® education and emergency
Worldwide, who we support each year OUR IMPACT $5.5 million response programs 22,000+
with monetary and in-kind donations, raised in 2019, supporting women impacted in
board leadership and volunteer service. 110,000 research hours for $1.2 million 35 U.S. cities
UBCF has its own board made up of 25 researchers raised in two weeks in 2020,
Ulta Beauty executives who help set impacting 750,000 kids
policy and direction for the Foundation.
the possibilities are beautiful.® 24COMMUNITY 2020 ESG REPORT
The power to improve lives (continued)
Wherever possible, we engage associates and guests in programs for giving back.
During a typical year, associates will donate their time and talents to, for example,
create hair and makeup styles for women looking to find employment or undergoing
treatment for breast cancer, organize donation drives or participate in fundraising
races. Meanwhile, guests can make contributions to our national partners at the
register or online, and participate in Cut for a Cause®, where the cost of a service is
donated to the Breast Cancer Research Foundation®. Due to COVID-19, many of these
in-person events have been temporarily suspended, and, as a result, we have shifted
to focus on matching gifts for associates and reaching guests and our nonprofit
partners’ clients online.
In late 2020, we organized Beauty on the Move, a virtual fitness event benefiting
BCRF® and open to all associates. Associates pledged to get moving by running,
walking, swimming or biking, and raised funds through donations from family and
friends. More than 450 associates took part in the event and collectively raised
nearly $110,000 for BCRF®.
funding research that matters
While we review our BCRF® funding portfolio annually, we try to fund projects
and investigators whom we can support in growing their research programs over
time. One of our grantees is Dr. William Kaelin, who works to rapidly apply
knowledge gained from studying other cancers to the treatment of breast
cancer. This work earned him the 2019 Nobel Prize in Physiology or Medicine.
There are so many angles from which we’re helping researchers get closer to
ending this disease. Ulta Beauty’s support is helping the research community In 2019, we featured
Steph Aiello, a makeup artist, influencer and
with grants in a range of areas:
wheelchair user, in one of our advertisements.
3% The ad caught the eye of young Maren Anderson,
7%
whose mother, Carolyn, captured this photo and
14% posted it on Facebook along with this caption:
Tumor Biology 38% 38% “Well Ulta, you absolutely stopped my girl in her
tracks this evening. It was mesmerizing to watch
Treatment 38%
her stop, turn and gaze at this poster.”
Metastasis 14%
Heredity & Ethnicity 7%
38%
Lifestyle & Prevention 3%
the possibilities are beautiful.® 25COMMUNITY 2020 ESG REPORT
Hometown giving
Ulta Beauty’s corporate headquarters are located just outside the city
of Chicago, and supporting organizations that support the area is one
of our priorities. We’re also building partnerships with nonprofits that
empower underserved individuals in Chicago and beyond.
For the past few years, we have developed Other Chicago-based organizations with
relationships with the Chicago Area Urban which Ulta Beauty supports through cash,
League, which works to achieve equity for products, volunteerism and/or board
Black families and communities through leadership include:
social and economic empowerment; and
Skills for Chicagoland’s Future, which > Communities in Schools of Chicago
helps unemployed job-seekers re-enter > After School Matters
the workforce. Our support takes the form > Big Brothers Big Sisters of
of donations, board service, volunteer Metropolitan Chicago
time and even hands-on training on > Metropolitan Family Services
topics like interview skills. We increased > Youth Guidance
our support for both of these organizations > Start Early (formerly known as
in 2020. We have hired more than Ounce of Prevention)
170 Chicagoans since we formed our > Step Up
partnership with Skills for Chicagoland’s
Future, and the organization named us We’re also proud to partner with
the 2020 Champion for the Unemployed
for our efforts to hire the underserved
organizations that are helping women
and girls find the beauty within. Project Standing up for justice
and empower even more individuals to Glimmer helps young women, particularly
use their talents and skills to build a women of color, grow personal confidence Systemic racism, unfortunately, affects every community
better future. and build their professional networks. And we serve. Ulta Beauty has responded in meaningful ways
GLAM4GOOD is on a mission to create to growing calls to address racial inequities in the U.S.,
“social change through style,” providing including donating nearly $150,000 to organizations
makeovers and gifts to everyday heroes focused on racial justice and equality. Read more about
and people in need. Over the past year, we how we’re championing diversity inside and outside
have supported both of these organizations our company.
with in-kind donations of product.
the possibilities are beautiful.® 26COMMUNITY 2020 ESG REPORT
Comfort in an
uncertain time
With the ongoing physical, social and economic toll of COVID-19, many
of us have needed a little extra care. Ulta Beauty has given back where
we can throughout this challenging time.
Our support began early in the pandemic response efforts. Given the unique
with products for front-line workers. We challenges presented by COVID-19, we
donated 450,000 medical gloves, as well have given all of our community partners
as products like moisturizers, sanitizers and greater flexibility to spend planned
balms needed by health care professionals financial support from Ulta Beauty as
putting in long, difficult hours, whose skin they see fit.
often got chafed from personal protective
equipment. In total, we donated $1.2 million We also reimagined the way we care
worth of product to 25 organizations. To for associates. Since 2017, the Associate
further show our appreciation for health Relief Fund has provided monetary
care heroes’ tireless efforts, we offered a grants to associates facing personal
half price haircut and style for health care hardship. We expanded the criteria for
workers with ID during the first month receiving funding to include those in
that their local Ulta Beauty store reopened. need of extra assistance as a result
Connecting COVID-19 relief with support of COVID-19. Thanks to the generosity
for our national partners, we began selling of our senior management team, Board
a branded face mask in stores and online of Directors and associates across
to raise funds for Dress for Success® the company, we raised $750,000
Worldwide toward their pandemic for the fund, allowing us to support
750 associates.
the possibilities are beautiful.® 27envi r o n m e n t
We want to maintain the
beauty of our environment
and minimize our impact
on the world around us.
Industry leadership.
#16 among the U.S. EPA’s top Retail Green
Power Partners
Doing more with less.
An estimated 486 tons of plastic saved,
thanks to new, smaller shopping bags
Getting better all the time.
Comparable store electricity consumption
reduced by over 5 million kWh in the last
four years
the possibilities are beautiful.® 28ENVIRONMENT 2020 ESG REPORT
How we manage INSIDE AN ULTA BEAUTY STORE
our footprint Some sustainability challenges we face are uniquely tied to our business model—a
comprehensive beauty destination with salon stations in close proximity to shopping
areas. Here are a few of the factors we consider as we manage our stores’ footprint:
Ulta Beauty strives to operate in an
FRESH INDOOR AIR
environmentally responsible manner. We
Our salons make use of a range of products,
have been implementing sustainability including hairsprays, dyes and more. We run
initiatives in our stores, distribution exhaust fans continuously during business
centers and corporate offices for years. hours to ensure safe management of any
volatile organic compounds (VOCs) that
could enter the air.
We have a dedicated Corporate Energy &
Sustainability Team that focuses on managing GLAM-WORTHY LIGHTING
our energy use and conserving resources across
To ensure products look their best, we
millions of square feet of real estate. The average
use more lighting per square foot than
Ulta Beauty store is approximately 10,000 square most retailers. Over the past several years,
feet, with roughly 950 square feet devoted to we’ve undertaken a gradual transition to
full-service salon space. Like many companies, we highly efficient LED lighting.
face the challenge of minimizing our environmental
footprint as our business grows. As we open new
stores, increase foot traffic and expand salon TEMPERATURE MANAGEMENT
services, we incorporate efficient technology and We use state-of-the-art HVAC systems to
apply best practices for continuous improvement. maintain a comfortable temperature for
guests throughout the year—taking into
account changing weather, open-concept
store designs, and guests who may have
wet hair or have removed layers for
salon treatments.
MANAGING WATER USE
Water is an essential part of many
salon services. We are committed
to using efficient practices in our
salons where feasible.
the possibilities are beautiful.® 29ENVIRONMENT 2020 ESG REPORT
Minimizing our impact
on the world
Energy & emissions
Our retail stores are the focus of our energy reduction efforts.
Up to 99% of stores make use of an energy management system
(EMS), which helps us actively conserve energy while saving on
annual operating costs.
The EMS precisely controls temperature Since 2018, Ulta Beauty has earned
and ensures minimal lighting is in use recognition as a Green Lease Leader,
outside of retail hours. The system also a voluntary program led by the Institute
detects malfunctioning equipment before for Market Transformation and the U.S.
it impacts the store environment and Department of Energy Better Buildings
wastes energy. An EMS allows Ulta Beauty Alliance that recognizes landlords and
stores to participate in automated demand tenants for following practices that
response programs by shifting or reducing promote high-performance, healthy
electricity usage during peak periods, buildings. We earned Gold status in 2020
helping to stabilize the electric grid. We (up from Silver in 2018), making us the
also utilize peak load management, or first small-box retail tenant to earn this
demand-limiting, strategies to reduce designation. Our green lease option
peak demand and save on utility bills. tracks energy and water usage, requests 5 million*
whole-building Energy Star scores,
implements energy management best
kWh of electricity usage
practices and accepts a cost recovery
reduced since 2016
clause for energy efficiency upgrades. Equivalent to avoiding 3,600
metric tons* of GHG emissions
*This data has not been assured.
the possibilities are beautiful.® 30You can also read
