For the Fourth Quarter:

• Net sales increased 16.1% to $396.4 million from $341.4 million in the fourth quarter of fiscal 2008;
• Comparable store sales (sales for stores open at least 14 months) increased 6.2% compared to a decrease of 5.5% in the fourth quarter of fiscal 2008;
• Pre-opening expenses decreased $1.2 million to $0.6 million in the fourth quarter fiscal 2009 due to the planned decrease in the Company's new store program;
• Operating income increased 60.1% to $34.3 million compared to $21.4 million in the fourth quarter of fiscal 2008;
• Net income increased 64.6% to $20.2 million compared to $12.3 million in the fourth quarter of fiscal 2008;
• Income per diluted share increased to $0.34, compared to $0.21 in the fourth quarter of fiscal 2008.

Lyn Kirby, Ulta's President and Chief Executive Officer, stated: "We are very pleased with our fourth quarter performance. Our results surpassed the increased guidance we provided in January and included a 6.2% comparable store sales increase, a 60 basis point improvement in merchandise margin and continued momentum of our cost management initiatives, all of which contributed to a 61.9% increase in diluted earnings per share - a strong finish to the year."

"As we began the year, our priorities were threefold: growing profitable market share, achieving permanent cost efficiencies and delivering free cash flow," stated Ms. Kirby. "We exceeded each one of our goals in fiscal 2009. Our comparable store sales increased 1.4% for the year, or 1.6% on a two-year basis, and we continued our store expansion by increasing square footage by 12%. We also achieved $19 million in permanent cost reductions and generated free cash flow of $104.7 million."

"As we begin fiscal 2010, we continue to build on our successful 2009 game plan. We are particularly optimistic about our opportunities for market share gains through comparable store sales growth and new store expansion," Ms. Kirby continued. "We expect to continue to generate free cash flow in 2010 while we increase our capital investment in support of our long term growth and believe that we will deliver another strong earnings performance in fiscal 2010," Ms. Kirby concluded.

For the Fiscal Year 2009:

• Net sales increased 12.7% to $1,222.8 million from $1,084.6 million in fiscal 2008;
• Comparable store sales (sales for stores open at least 14 months) increased 1.4% compared to an increase of 0.2% in fiscal 2008;
• Pre-opening expenses decreased $8.3 million to $6.0 million in fiscal 2009 due to the planned decrease in the Company's new store program;
• Operating income increased 47.2% to $68.2 million compared to $46.3 million in fiscal 2008;
• Net income increased 55.8% to $39.4 million compared to $25.3 million in fiscal 2008;
• Income per diluted share increased to $0.66 compared to $0.43 in fiscal 2008.

Balance Sheet and Cash Flow

Merchandise inventories at the end of the fourth quarter totaled $206.9 million, compared to $213.6 million at the end of fourth quarter fiscal 2008, representing a decrease of $6.7 million. The decrease is due to a 12.9% decrease in average inventory per store driven by management initiatives focused on leveraging supply chain inventories, offset by the addition of 35 net new stores opened since January 31, 2009.

For the fiscal year 2009, the Company generated free cash flow of $104.7 million through a combination of increased earnings, working capital management, reduced new store program and lower initial new store investment. Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment. A reconciliation of free cash flow, a non-GAAP measure, is included at Exhibit 5.

Store Expansion

During the fourth quarter, the Company opened 3 stores including Tupelo, MS; Summerville, SC; and Longview, TX. In addition, the Company closed 2 stores. The Company ended the fourth quarter with 346 stores and square footage of 3,613,840, which represents a 12% increase compared to the fourth quarter of fiscal 2008.

Outlook

For the first quarter of fiscal 2010, the Company currently expects net sales in the range of $301 million to $307 million, compared to actual net sales of $268.8 million in the first quarter of fiscal 2009. This assumes comparable stores sales increase 4% to 6%, compared to a decrease of 2.3% in the first quarter last year.

Income per diluted share for the first quarter of fiscal 2010 is estimated to be in the range of $0.14 to $0.16. This compares to income per diluted share for first quarter fiscal 2009 of $0.08.

For fiscal 2010, the Company plans to:

• open approximately 46 new stores, remodel 13 stores and relocate 6 stores;
• incur capital expenditures of approximately $100 million, compared to $68.1 million in fiscal 2009;
• reduce inventory by approximately 5% on an average per store basis by year end 2010
• permanently reduce expenses by $5 million; and
• generate free cash flow.

Conference Call Information

A conference call to discuss third quarter results is scheduled for today, March 11, 2010, at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-0784 approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at http://ir.ulta.com and remain available for 90 days. A replay of this call will be available until 11:59 p.m. (ET) on March 18, 2010 and can be accessed by dialing (877) 660-6853 and entering account number 3055 and conference ID number 345778.

About Ulta

Ulta is the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. Ulta provides affordable indulgence to its customers by combining the product breadth, value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer. Ulta offers a unique combination of over 22,000 prestige and mass beauty products across the categories of cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools, as well as salon haircare products. Ulta also offers a full-service salon in all of its stores. The Company currently operates 346 retail stores across 38 states and also distributes its products through the Company's website: www.ulta.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 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," or other comparable words. Any forward-looking statements contained in this press release 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 or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties, which include, without limitation: the impact of weakness in the economy; changes in the overall level of consumer spending; changes in the wholesale cost of our products; the possibility that we may be unable to compete effectively in our highly competitive markets; the possibility that our continued opening of new stores could strain our resources and have a material adverse effect on our business and financial performance; the possibility that new store openings and existing locations may be impacted by developer or co-tenant issues; the possibility that the capacity of our distribution and order fulfillment infrastructure may not be adequate to support our recent growth and expected future growth plans; the possibility of material disruptions to our information systems; weather conditions that could negatively impact sales and other risk factors detailed in our public filings with the Securities and Exchange Commission (the "SEC"), including risk factors contained in our Annual Report on Form 10-K for the year ended January 31, 2009.Our filings with the SEC are available at www.sec.gov. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

(a) Free cash flow is a non-GAAP financial measure. The Company believes free cash flow is an important metric as it represents a measure of how much cash the Company has available after the deduction of capital expenditures, as the Company requires regular capital expenditures to build and maintain stores and purchase new equipment to improve the business. The Company uses this metric internally as the Company believes the sustained ability to generate free cash flow is an important driver of value creation. However, this non-GAAP financial measure is not intended to supersede or replace the Company's GAAP results.

SOURCE: Ulta Salon, Cosmetics & Fragrance, Inc.

Ulta
Gregg Bodnar, 630-410-4633
Chief Financial Officer
or
Investors/Media:
ICR, Inc.
Allison Malkin/Alecia Pulman
203-682-8225 / 646-277-1220