Temporary working capital

ULTA BEAUTY, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and
related notes included elsewhere in this quarterly report. This discussion
contains forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, 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," "targets," "strategies," or other comparable words. Any
forward-looking statements contained in this Form 10-Q 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,
targets, strategies, or expectations contemplated by us will be achieved. Such
forward-looking statements are subject to various risks and uncertainties, which
include, without limitation:

changes in the overall level of consumer spending and the volatility of the

? economic, in particular due to the COVID-19 pandemic and the geopolitical situation

events;

? the impact of current cost inflationary pressures on payroll, benefits, supply

line and other operating costs;

? our ability to support our growth plans and successfully implement our

long-term strategic and financial plan;

the ability to execute our operational excellence priorities, including

? continuous improvement, Project SOAR (our corporate replacement resource

planning platform) and supply chain optimization;

? epidemics, pandemics or natural disasters that have and may continue to

have a negative impact on sales;

? our ability to assess beauty trends and respond to changing consumer preferences

in right time;

? the possibility that we may not be able to compete effectively in our

competitive markets;

the possibility that cybersecurity or information security and other

? disruptions could compromise our information or result in the

disclosure of confidential information;

? the possibility of material disruptions to our information systems;

? failure to maintain satisfactory compliance with applicable confidentiality and

data protection laws and regulations;

the possibility that the ability of our distribution and order fulfillment

? infrastructure and performance of our distribution centers and speed

distribution centers may not be adequate to support our expected future growth

plans;

? changes in the wholesale price of our products;

? a decline in operating results which has caused and may continue to cause

impairment charges and store closures;

? the possibility that new store openings and existing locations will be affected

by promoter or roommate problems;

? our ability to attract and retain key executives;

? the impact of climate change on our business operations and/or our supply chain;

? our ability to successfully execute our common share repurchase program or

implement future common share buyback programs; and

other risk factors detailed in our public securities filings and

Exchange fee (the SECOND), including the risk factors contained in section 1A,

? “Risk Factors” of our Annual Report on Form 10-K for the year ended January 29,

2022, as such may be amended or supplemented in our subsequent filings

Quarterly reports on Form 10-Q (including this report).

Except to the extent required by the federal securities laws, we undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.

References in the following discussion to "we," "us," "our," "Ulta Beauty," the
"Company," and similar references mean Ulta Beauty, Inc. and its consolidated
subsidiaries, unless otherwise expressly stated or the context otherwise
requires.

Insight

We were founded in 1990 as a beauty retailer at a time when prestige, mass, and
salon products were sold through distinct channels - department stores for
prestige products; drug stores and mass merchandisers for mass products; and
salons and authorized retail outlets for professional hair care products. We
developed a unique specialty retail concept that offers a broad range of brands
and price points, select beauty services, and a convenient and welcoming
shopping

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environment. We define our target consumer as a beauty enthusiast, a consumer
who is passionate about the beauty category, uses beauty for self-expression,
experimentation and self-investment, and has high expectations for the shopping
experience. We believe our strategy provides us with the competitive advantages
that have contributed to our financial performance.

Today, we are the largest beauty retailer in the United States and the premier
beauty destination for cosmetics, fragrance, skin care products, hair care
products, and salon services. Key aspects of our business include: a
differentiated assortment of more than 25,000 beauty products across a variety
of categories and price points as well as a variety of beauty services,
including salon services, in more than 1,300 stores predominantly located in
convenient, high-traffic locations; engaging digital experiences delivered
through our website, Ulta.com, and our mobile applications; our best-in-class
loyalty program that enables members to earn points for every dollar spent on
products and beauty services and provides us with deep, proprietary customer
insights; and our ability to cultivate human connection with warm and welcoming
guest experiences across all of our channels.

The continued growth of our business and any future increases in net sales, net
income, and cash flows is dependent on our ability to execute our strategic
priorities: 1) drive breakthrough and disruptive growth through an expanded
definition of All Things Beauty, 2) evolve the omnichannel experience through
connected physical and digital ecosystems, All In Your World, 3) expand and
deepen our presence across the beauty journey, solidifying Ulta Beauty at the
Heart of the Beauty Community, 4) drive operational excellence and optimization,
5) protect and cultivate our world-class culture and talent and 6) expand our
environmental and social impact. We believe that the attractive and growing U.S.
beauty products and salon services industry, the expanding definition of beauty
and the role that omnichannel capabilities play in consumers' lives, coupled
with Ulta Beauty's competitive strengths, position us to capture additional
market share in the industry.

Comparable sales is a key metric that is monitored closely within the retail
industry. Our comparable sales have fluctuated in the past, and we expect them
to continue to fluctuate in the future. A variety of factors affect our
comparable sales, including general U.S. economic conditions, changes in
merchandise strategy or mix, and timing and effectiveness of our marketing
activities, among others.

Over the long term, our growth strategy is to increase total net sales through
growing our comparable sales, expanding omnichannel capabilities, and opening
new stores. Long-term operating profit is expected to increase as a result of
our efforts to optimize our real estate portfolio, expand merchandise margin and
leverage our fixed store costs with comparable sales increases and operating
efficiencies, partially offset by incremental investments in people, systems,
and supply chain required to support a 1,500 to 1,700 store chain in the U.S.
with successful e-commerce and competitive omnichannel capabilities.

Current trends

Impact of COVID-19

We closely monitor the continuing impact of COVID-19 on all facets of our
business. During the first half of fiscal 2022, we experienced an increase in
sales driven primarily by the favorable impact from the easing of COVID-19
restrictions. While operations during the first half of fiscal 2022 did not
appear to be negatively impacted, the continuing COVID-19 pandemic could have
negative impacts in the future. The extent of the impact of the pandemic on our
future business and financial results will depend on, among other things, the
potential temporary reclosing of certain stores, the potential temporary
restrictions on certain store operating hours and/or in-store capacity, supply
chain disruptions, increased freight costs and higher wholesale costs, the
continued duration of the pandemic and any variants of the virus, the duration,
timing and severity of the impact on consumer spending, the timing and
effectiveness of vaccine distribution, vaccination rates, and how quickly and to
what extent normal economic and operating conditions can resume.

Industry trends

Our research indicates that Ulta Beauty has captured meaningful market share
across all categories over the last several years. However, the COVID-19
pandemic and its various impacts have changed consumer behavior and consumption
of beauty products due to the closures of offices, retail stores and other
businesses and the significant decline in travel,

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entertainment and social gatherings. The overall beauty market declined in 2020 but stabilized in 2021 as consumers began to recover from the effects of COVID-19. We remain confident that our differentiated and diversified business model, our commitment to strategic investments and our highly engaged associates will continue to drive market share gains over the long term.

Impact of inflation and price changes

Although we do not believe that inflation has had a material impact on our
financial position or results of operations to date, continued pressure from
inflation could have an adverse impact on consumer spending and sales and could
lead to a recession. Furthermore, inflation pressure could negatively impact our
ability to maintain current levels of gross margin and selling, general and
administrative expenses as a percentage of net sales if the selling prices of
our products do not increase with higher costs. In addition, inflation could
materially increase the interest rates on any future debt.

presentation basis

The Company has a reportable segment, which includes retail stores, salon services and e-commerce.

We recognize merchandise revenue at the point of sale in our retail stores.
E-commerce sales are recognized upon shipment or guest pickup of the merchandise
based on meeting the transfer of control criteria. Retail store and e-commerce
sales are recorded net of estimated returns. Shipping and handling are treated
as costs to fulfill the contract and not a separate performance obligation.
Accordingly, we recognize revenue for our single performance obligation related
to online sales at the time control of the merchandise passes to the customer,
which is at the time of shipment or guest pickup. We provide refunds for
merchandise returns within 60 days from the original purchase date. State sales
taxes are presented on a net basis as we consider our self a pass-through
conduit for collecting and remitting state sales tax. Salon service revenue is
recognized at the time the service is provided to the guest. Gift card sales
revenue is deferred until the guest redeems the gift card. Company coupons and
other incentives are recorded as a reduction of net sales. Other revenue
includes the private label and co-branded credit card programs, royalties
derived from the partnership with Target, and deferred revenue related to the
loyalty program and gift card breakage.

Comparable sales reflect sales for stores beginning on the first day of the 14th
month of operation. Therefore, a store is included in our comparable store base
on the first day of the period after one year of operations plus the initial
one-month grand opening period. Non-comparable store sales include sales from
new stores that have not yet completed their 13th month of operation and stores
that were closed for part or all of the period in either year. Remodeled stores
are included in comparable sales unless the store was closed for a portion of
the current or prior period. Comparable sales include retail sales, salon
services, and e-commerce. There may be variations in the way in which some of
our competitors and other retailers calculate comparable or same store sales.

Measuring comparable sales allows us to evaluate the performance of our store
base as well as several other aspects of our overall strategy. Several factors
could positively or negatively impact our comparable sales results:

? general national, regional and local economic conditions and

impact on customer spending levels;

? the introduction of new products or brands;

? the location of new stores in existing store markets;

? competition;

? our ability to respond in a timely manner to changes in consumer preferences;

? the effectiveness of our various merchandising and marketing activities; and

? the number of new stores opened and the impact on the average age of all of our

   comparable stores.


Cost of sales includes:

? the cost of goods sold, offset by the income of the seller who is not a

reimbursement of specific, additional and identifiable costs;

? distribution costs, including labor and related benefits, freight, rent,

depreciation and amortization, property taxes, utilities and insurance;


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? shipping and handling charges;

? retail store occupancy costs, including rent, depreciation and amortization,

property taxes, utilities, repairs and maintenance, insurance and licensing;

? salon services salaries and benefits; and

? shrinkage reserves and inventory valuation.

Our cost of sales may be negatively impacted as we open new stores. Changes in
our merchandise or channel mix may also have an impact on cost of sales. This
presentation of items included in cost of sales may not be comparable to the way
in which our competitors or other retailers compute their cost of sales.

Selling, general and administrative expenses include:

? payroll costs, bonuses and employee benefits for retail stores and businesses;

? advertising and marketing costs, offset by supplier revenues which

reimbursement of specific, additional and identifiable costs;

? occupancy costs related to our head office facilities;

? stock-based compensation expense;

depreciation and amortization for all assets except those related to our

? retail stores and distribution operations, which are included in the cost of

Sales; and

? legal, financial, information systems and other corporate overhead costs.

This presentation of items in selling, general and administrative expenses may
not be comparable to the way in which our competitors or other retailers compute
their selling, general and administrative expenses.

Pre-opening expenses include non-capital expenditures during the period prior to
store opening for new, remodeled, and relocated stores including rent during the
construction period for new and relocated stores, store set-up labor, management
and employee training, and grand opening advertising.

Interest expense, net includes both interest expense and income. Interest
expense includes interest costs and facility fees associated with our credit
facility, which is structured as an asset-based lending instrument. Our credit
facility interest is based on a variable interest rate structure which can
result in increased cost in periods of rising interest rates. Interest income
represents interest from cash equivalents and short-term investments with
maturities of twelve months or less from the date of purchase.

Income tax expense reflects the federal statutory tax rate and the weighted average state statutory tax rate for the states in which we operate stores.

Operating results

Our quarterly periods are the 13 weeks ending on the Saturday closest to
April 30, July 31, October 31, and January 31. The Company's second quarter in
fiscal 2022 and 2021 ended on July 30, 2022 and July 31, 2021, respectively. Our
quarterly results of operations have varied in the past and are likely to do so
again in the future. As such, we believe that period-to-period comparisons of
our results of operations should not be relied upon as an indication of our
future performance.

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The following tables present the components of our consolidated results of operations for the periods indicated:

                                                     13 Weeks Ended                26 Weeks Ended
                                                July 30,       July 31,       July 30,       July 31,
(Dollars in thousands)                            2022           2021           2022           2021
Net sales                                      $ 2,297,113    $ 1,967,207    $ 4,643,014    $ 3,905,726
Cost of sales                                    1,368,949      1,169,244      2,773,824      2,353,975
Gross profit                                       928,164        797,963      1,869,190      1,551,751

Selling, general and administrative expenses 534,459 464,299

   1,035,429        908,174
Pre-opening expenses                                 2,277          1,357          4,625          5,946
Operating income                                   391,428        332,307        829,136        637,631
Interest expense (income), net                       (108)            425  
         293            783
Income before income taxes                         391,536        331,882        828,843        636,848
Income tax expense                                  95,859         80,989        201,771        155,666
Net income                                     $   295,677    $   250,893    $   627,072    $   481,182

Other operating data:
Number of stores end of period                       1,325          1,296  
       1,325          1,296
Comparable sales                                     14.4%          56.3%          16.2%          60.9%


                                                   13 Weeks Ended             26 Weeks Ended
                                                July 30,     July 31,     July 30,     July 31,
(Percentage of net sales)                         2022         2021         2022         2021
Net sales                                          100.0%       100.0%       100.0%       100.0%
Cost of sales                                       59.6%        59.4%        59.7%        60.3%
Gross profit                                        40.4%        40.6%        40.3%        39.7%

Selling, general and administrative expenses 23.3% 23.6%

  22.3%        23.3%
Pre-opening expenses                                 0.1%         0.1%         0.1%         0.1%
Operating income                                    17.0%        16.9%        17.9%        16.3%
Interest expense (income), net                     (0.0%)         0.0%         0.0%         0.0%
Income before income taxes                          17.0%        16.9%     
  17.9%        16.3%
Income tax expense                                   4.2%         4.1%         4.3%         4.0%
Net income                                          12.9%        12.8%        13.5%        12.3%


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Comparison of 13 weeks completed July 30, 2022 at 13 weeks completed July 31, 2021

Net sales

Net sales increased $329.9 million or 16.8%, to $2.3 billion for the 13 weeks
ended July 30, 2022, compared to $2.0 billion for the 13 weeks ended July 31,
2021. The net sales increase was primarily due to the favorable impact from the
continued resilience of the beauty category, the impact of new brands and
product innovation, the easing of COVID-19 restrictions and an increase of $19.0
million in other revenue compared to the 13 weeks ended July 31, 2021. The total
comparable sales increase of 14.4% during the 13 weeks ended July 30, 2022 was
driven by an 8.3% increase in transactions and a 5.6% increase in average
ticket.

Gross profit

Gross profit increased $130.2 million or 16.3%, to $928.2 million for the 13
weeks ended July 30, 2022, compared to $798.0 million for the 13 weeks ended
July 31, 2021. Gross profit as a percentage of net sales decreased to 40.4% for
the 13 weeks ended July 30, 2022, compared to 40.6% for the 13 weeks ended July
31, 2021. The decrease in gross profit margin was primarily due to lower
merchandise margin and higher inventory shrink, partially offset by leverage of
fixed costs and strong growth in other revenue.

Selling, general and administrative expenses

Selling, general and administrative (SG&A) expenses increased $70.2 million or
15.1%, to $534.5 million for the 13 weeks ended July 30, 2022, compared to
$464.3 million for the 13 weeks ended July 31, 2021. SG&A expenses as
a percentage of net sales decreased to 23.3% for the 13 weeks ended July 30,
2022, compared to 23.6% for the 13 weeks ended July 31, 2021, primarily due to
lower marketing expenses and leverage of store payroll and benefits and store
expenses due to higher sales, partially offset by deleverage in corporate
overhead primarily due to strategic investments and higher incentive
compensation.

Pre-opening fees

Pre-opening expenses increased $0.9 million to $2.3 million for the 13 weeks
ended July 30, 2022 compared to $1.4 million for the 13 weeks ended July 31,
2021.

Interest expense (income), net

Interest income, net was $0.1 million for the 13 weeks ended July 30, 2022
compared to interest expense, net of $0.4 million for the 13 weeks ended July
31, 2021. Interest income represents interest from cash equivalents and
short-term investments with maturities of twelve months or less from the date of
purchase. Interest expense represents interest on borrowings and fees related to
the credit facility. We did not have any outstanding borrowings on our credit
facility as of July 30, 2022, January 29, 2022, and July 31, 2021.

income tax expense

Income tax expense of $95.9 million for the 13 weeks completed July 30, 2022
represents an effective tax rate of 24.5%, compared to $81.0 million tax expense representing an effective tax rate of 24.4% for the 13 weeks July 31, 2021.

Net income

Net income was $295.7 million for the 13 weeks ended July 30, 2022, compared to
$250.9 million for the 13 weeks ended July 31, 2021. The increase in net income
is primarily due to the $130.2 million increase in gross profit, partially
offset by the $70.2 million increase in SG&A expenses and the $14.9 million
increase in income taxes.

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Comparison of 26 weeks completed July 30, 2022 at 26 weeks completed July 31, 2021

Net sales

Net sales increased $737.3 million or 18.9%, to $4.6 billion for the 26 weeks
ended July 30, 2022, compared to $3.9 billion for the 26 weeks ended July 31,
2021. The net sales increase was primarily due to the favorable impact from the
continued resilience of the beauty category, the impact of new brands and
product innovation, the easing of COVID-19 restrictions and an increase of $39.4
million in other revenue compared to the 26 weeks ended July 31, 2021. The total
comparable sales increase of 16.2% during the 26 weeks ended July 30, 2022 was
driven by a 9.2% increase in transactions and a 6.4% increase in average ticket.

Gross profit

Gross profit increased $317.4 million or 20.5%, to $1.9 billion for the 26 weeks
ended July 30, 2022, compared to $1.6 billion for the 26 weeks ended July 31,
2021. Gross profit as a percentage of net sales increased to 40.3% for the 26
weeks ended July 30, 2022, compared to 39.7% for the 26 weeks ended July 31,
2021. The increase in gross profit margin was primarily due to leverage of fixed
costs, strong growth in other revenue, and favorable channel mix shifts,
partially offset by lower merchandise margin and higher inventory shrink.

Selling, general and administrative expenses

SG&A expenses increased $127.3 million or 14.0%, to $1.0 billion for the 26
weeks ended July 30, 2022, compared to $908.2 million for the 26 weeks ended
July 31, 2021. SG&A expenses as a percentage of net sales decreased to 22.3% for
the 26 weeks ended July 30, 2022, compared to 23.3% for the 26 weeks ended July
31, 2021, due to lower marketing expenses and leverage of store payroll and
benefits due to higher sales, partially offset by deleverage in corporate
overhead primarily due to strategic investments.

Pre-opening fees

Pre-opening expenses decreased $1.3 million to $4.6 million for the 26 weeks
ended July 30, 2022, compared to $5.9 million for the 26 weeks ended July 31,
2021.

Interest expense, net
Interest expense, net was $0.3 million for the 26 weeks ended July 30, 2022
compared to $0.8 million for the 26 weeks ended July 31, 2021. Interest expense
represents interest on borrowings and fees related to the credit facility. We
did not have any outstanding borrowings on our credit facility as of July 30,
2022, January 29, 2022, and July 31, 2021.

income tax expense

Income tax expense of $201.8 million for the 26 weeks ended July 30, 2022
represents an effective tax rate of 24.3%, compared to $155.7 million of tax
expense representing an effective tax rate of 24.4% for the 26 weeks ended
July
31, 2021.

Net income
Net income was $627.1 million for the 26 weeks ended July 30, 2022 compared to
$481.2 million for the 26 weeks ended July 31, 2021. The increase in net income
is primarily due to the $317.4 million increase in gross profit, partially
offset by the $127.3 million increase in SG&A expenses and the $46.1 million
increase in income taxes.

Cash and capital resources

Our primary sources of liquidity are cash and cash equivalents, cash flows from
operations, and borrowings under our credit facility. The most significant
components of our working capital are merchandise inventories and cash and cash
equivalents reduced by related accounts payable, accrued expenses and deferred
revenue. As of July 30, 2022, January

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29 2022, and July 31, 2021we had cash and cash equivalents of $434.2 million,
$431.6 millionand $770.1 millionrespectively.

Our primary cash needs are for rent, capital expenditures for new, remodeled,
and relocated stores, increased merchandise inventories related to store
expansion and new brand additions, supply chain improvements, share repurchases,
and continued improvement in our information technology systems.

Our most significant ongoing short-term cash requirements relate primarily to
funding operations (including expenditures for lease expenses, inventory, labor,
distribution, advertising and marketing, and tax liabilities) as well as
periodic spend for capital expenditures, investments, and share repurchases. Our
working capital needs are greatest from August through November each year as a
result of our inventory build-up during this period for the approaching holiday
season.

Long-term cash requirements are mainly related to charges related to finance leases and other purchase commitments.

We generally fund short-term and long-term cash requirements with cash flow from operations. We believe that our primary sources of liquidity will meet our short-term (next 12 months) and long-term liquidity needs.

Cash flow

We believe our ability to generate substantial cash from operating activities
and readily secure financing at competitive rates are key strengths that give us
significant flexibility to meet our short and long-term financial commitments.

The following table provides a summary of our cash flows for the 26 weeks ended
July 30, 2022 and July 31, 2021:

                                                   26 Weeks Ended
                                              July 30,       July 31,
(In thousands)                                  2022           2021

Net cash flow generated by operating activities $540,667 $401,413
Net cash used in investing activities (121,749) (57,305) Net cash used in financing activities (416,252) (619,959)

Operational activities

Operating activities consist of net income adjusted for certain non-cash items,
including depreciation and amortization, non-cash lease expense, deferred income
taxes, stock-based compensation expense, realized gains or losses on disposal of
property and equipment, and the effect of working capital changes.

The increase in net cash provided by operating activities in the first 26 weeks
of fiscal 2022 is mainly due to the increase in net income and merchandise
inventories, partially offset by timing of accounts payable and accrued
liabilities and increase in deferred revenue compared to the first 26 weeks of
fiscal 2021. The increase in net income was primarily due to an increase in
gross profit resulting from higher sales, partially offset by an increase in
SG&A expenses and income taxes.

Merchandise inventories, net were $1.67 billion at July 30, 2022, compared to
$1.44 billion at July 31, 2021, representing an increase of $222.4 million or
15.4%. The change in total inventory is primarily due to the following:

? $32 million increase due to the addition of 29 net new stores opened since July

31, 2021;

? $81 million increase due to the launch of key new brands; and

? $109 million increase due to increased cost of inventory and inventory receipts

   maintain strong in-stocks of key items to support expected demand.


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Investing activities

In the past, we have primarily used cash for new, remodeled, relocated and refurbished stores, supply chain investments, short-term investments and investments in information technology systems. Investing activities for capital expenditures have been $120.5 million in the 26 weeks ended July 30, 2022compared to $57.3 million in the 26 weeks ended July 31, 2021.

During the 26 weeks ended July 30, 2022, we opened 17 new stores and relocated
10 stores, compared to the 26 weeks ended July 31, 2021, when we opened 35 new
stores, relocated two stores and remodeled five stores.

The increase in net cash used in investing activities in the first 26 weeks of
fiscal 2022 compared to the first 26 weeks of fiscal 2021 was primarily due to
more capital expenditures.

Our future investments will depend primarily on the number of new, remodeled,
and relocated stores, information technology systems, and supply chain
investments we undertake and the timing of these expenditures. Based on past
performance and current expectations, we believe our sources of liquidity will
be sufficient to fund future capital expenditures.

Fundraising activities

Financing activities include share repurchases, borrowing and repayment of our
revolving credit facility, and capital stock transactions. Purchases of treasury
shares represent the fair value of common shares repurchased from plan
participants in connection with shares withheld to satisfy minimum statutory tax
obligations upon the vesting of restricted stock.

The decrease in net cash used in financing activities in the first 26 weeks of
fiscal 2022 compared to the first 26 weeks of fiscal 2021 was primarily due to a
decrease in share repurchases.

We had no borrowings outstanding under the credit facility as of July 30, 2022,
January 29, 2022, and July 31, 2021. The zero outstanding borrowings position
continues to be due to a combination of factors including sales demand, overall
performance of management initiatives including expense control, and inventory
and other working capital reductions. We may require borrowings under the
facility from time to time in future periods for unexpected business
disruptions, to support our new store program, seasonal inventory needs, or
share repurchases.

Share buyback program

In March 2020, the Board of Directors authorized a share repurchase program (the
2020 Share Repurchase Program) pursuant to which the Company could repurchase up
to $1.6 billion of the Company's common stock. The 2020 Share Repurchase Program
authorization revoked the previously authorized but unused amount of $177.8
million from the earlier share repurchase program. The 2020 Share Repurchase
Program did not have an expiration date but provided for suspension or
discontinuation at any time.

In March 2022, the Board of Directors authorized a new share repurchase program
(the 2022 Share Repurchase Program) pursuant to which the Company may repurchase
up to $2.0 billion of the Company's common stock. The 2022 Share Repurchase
Program revokes the previously authorized but unused amounts from the 2020 Share
Repurchase Program. The 2022 Share Repurchase Program does not have an
expiration date and may be suspended or discontinued at any time.

A summary of common stock repurchase activity is presented in the following
table:

                                       26 Weeks Ended
                                   July 30,       July 31,
(Dollars in millions)                2022           2021
Shares repurchased                  1,129,828      1,989,576

Total cost of shares repurchased $434.4 $635.8

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Credit facility

On March 11, 2020, we entered into Amendment No. 1 to the Second Amended and
Restated Loan Agreement (as so amended, the Loan Agreement) with Wells Fargo
Bank, National Association, as Administrative Agent, Collateral Agent and a
Lender thereunder; Wells Fargo Bank, National Association and JPMorgan Chase
Bank, N.A., as Lead Arrangers and Bookrunners; JPMorgan Chase Bank, N.A., as
Syndication Agent and a Lender; PNC Bank, National Association, as Documentation
Agent and a Lender; and the other lenders party thereto. The Loan Agreement
matures on March 11, 2025, provides maximum revolving loans equal to the lesser
of $1.0 billion or a percentage of eligible owned inventory and eligible owned
receivables (which borrowing base may, at the election of the Company and
satisfaction of certain conditions, include a percentage of qualified cash),
contains a $50.0 million subfacility for letters of credit and allows the
Company to increase the revolving facility by an additional $100.0 million,
subject to the consent by each lender and other conditions. The Loan Agreement
contains a requirement to maintain a fixed charge coverage ratio of not less
than 1.0 to 1.0 during such periods when availability under the Loan Agreement
falls below a specified threshold. Substantially all of the Company's assets are
pledged as collateral for outstanding borrowings under the Loan Agreement.
Outstanding borrowings bear interest, at the Company's election, at either a
base rate plus a margin of 0% to 0.125% or the London Interbank Offered Rate
plus a margin of 1.125% to 1.250%, with such margins based on the Company's
borrowing availability, and the unused line fee is 0.20% per annum.

From July 30, 2022, January 29, 2022and July 31, 2021we had no outstanding borrowings under the credit facility.

From July 30, 2022we were in compliance with all the terms and covenants of the loan agreement.

Seasonality

Our business is subject to seasonal fluctuation. Significant portions of our net
sales and profits are realized during the fourth quarter of the fiscal year due
to the holiday selling season. To a lesser extent, our business is also affected
by Mother's Day and Valentine's Day. Any decrease in sales during these higher
sales volume periods could have an adverse effect on our business, financial
condition, or operating results for the entire fiscal year. Our quarterly
results of operations have varied in the past and are likely to do so again in
the future. As such, we believe that period-to-period comparisons of our results
of operations should not be relied upon as an indication of our future
performance.

Significant Accounting Policies and Estimates

Management's discussion and analysis of financial condition and results of
operations is based upon our consolidated financial statements, which have been
prepared in accordance with U.S. generally accepted accounting principles. The
preparation of these consolidated financial statements required the use of
estimates and judgments that affect the reported amounts of our assets,
liabilities, revenues, and expenses. Management bases estimates on historical
experience and other assumptions it believes to be reasonable under the
circumstances and evaluates these estimates on an on-going basis. Actual results
may differ from these estimates. There have been no significant changes to the
critical accounting policies and estimates included in our Annual Report on
Form 10-K for the fiscal year ended January 29, 2022.

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