Ulta Beauty : 2023ESG Report

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As we reflect on 2023, we have a lot to be proud of at Ulta Beauty: strong financial results, engaged guests and passionate associates. We are particularly proud of how we continue to use the power of beauty for good in a uniquely Ulta Beauty way.

Environment

In 2023, we announced emissions reduction goals approved by the Science Based Targets initiative. These targets include our commitment to reduce emissions from the products we sell and engage suppliers to set reduction targets of their own. Together, in partnership with our brands and suppliers, we are confident we can achieve our commitments. As an example of steps we are already taking, we recently announced that we will provide free guidance to all brand partners to support them on their

Dave Kimbell

Chief Executive Officer

Expanding our environmental and social impact is an important part of the strategic framework that guides our company. Expectations of businesses continue to evolve-many of our guests, associates and stakeholders expect us to go beyond selling products or offering services and be part of the solution to environmental and social issues. As the largest U.S. specialty beauty retailer, we have the power to drive positive change, and we take this responsibility seriously. However, we cannot do this alone, and our strong partnerships and collaborative approach will allow us to influence our vendors and brand partners to join us in taking steps to improve the beauty industry as a whole.

We focus our efforts on areas where we believe we can have the greatest impact and that make sense for our guests, our associates and our business. I'm proud to share just a few highlights of the progress we made in 2023 across each of our ESG pillars.

People

We are proud to serve a broad, diverse population of guests who span all ages, ethnicities and walks of life, and remain focused on enhancing and evolving our assortment and service offerings to ensure all guests feel connected and reflected at Ulta Beauty. Representing beauty at its most diverse and inclusive helps our guests feel welcome and allows us to

best meet their needs. Our engaged associates and winning culture are key drivers of our success. With an associate population that is 91% female and 54% people of color, we are making great progress but know we have more work to do. In 2023, we remained focused on helping our associates achieve their full potential by offering a wide array of training and development opportunities contributing to our strong retention rate-proof of the culture of belonging we're creating.

Product

Many of our guests are making lifestyle choices to reduce their environmental impact, including choosing products made with sustainable packaging. In 2023, over 300 brands were certified to one or more pillars of Conscious Beauty at Ulta Beauty®. We're making progress toward our sustainable packaging goal and are further addressing the beauty industry's packaging footprint with the launch of The Beauty Dropoff™ nationwide in 2024. This initiative offers our guests a convenient, responsible means to dispose of hard-to-recycle beauty packaging at Ulta Beauty stores, which are then recycled or converted into energy by a specialty recycling partner. We also welcomed our second cohort of the MUSE program, designed to help BIPOC brands become retail ready.

climate journeys. This is good for them, good for us and good for the planet. We also made meaningful improvements on energy efficiency and will continue looking for ways to reduce the impact of our business on the environment.

Community

Our Ulta Beauty Charitable Foundation continues to play a key role in our ability to use the power of beauty to make a positive impact. In 2023, we raised $6.8 million dollars for our long-time partner, the Breast Cancer Research Foundation, advancing research and continuing our search for a cure. This is just one of the many non-profit partners we supported in 2023, making a real difference in the lives of women and their families across the country. We also provided much-needed support during natural disasters and expanded the impact of our Ulta Beauty associate relief program. We are grateful for the generosity of our guests, associates and the many partners who support our charitable efforts, and look forward to doing even more in 2024.

Ulta Beauty believes in the power of beauty to do good and we look forward to showing the world just how much good we can do when we all work together. We hope you will continue to join us on this journey and encourage you to share your feedback along the way.

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Ulta Beauty Strategic Framework

Drive breakthrough and disruptive growth through an expanded definition of

ALL THINGS BEAUTY

Evolve the omnichannel experience through connected physical and digital ecosystems

ALL IN YOUR WORLD

Expand and deepen our presence across the beauty journey, solidifying Ulta Beauty at the

HEART OF THE BEAUTY COMMUNITY

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How we make a positive impact

Why it matters to our business

We champion inclusion and opportunity in beauty for all.

Our associates are key to helping guests find what they're looking for, inspiring joy and driving loyalty. We keep our associates at the center of everything we do so they can stay focused on delivering great guest experiences.

And we know that turnover is costly. Employees who feel valued are more productive, and more diverse companies tend to outperform their less diverse peers.1,2

We empower guests to make informed choices about the products that we offer.

Beauty is an inherently personal category, and it knows no bounds. To deliver a great experience to every guest, we must have something for everyone, for every stage of their lifelong beauty journey.

Guests also increasingly want to understand and feel good about the products they purchase. Our efforts to provide education and transparency about the products we carry can drive sales and brand loyalty.

We strive to maintain the beauty of our environment and minimize our impact on the world around us.

Working with others to reduce our collective impact builds strong partnerships, helps mitigate risks associated with climate change and enhances business resiliency.

And efficient operations and facilities reduce costs associated with operating our stores and distribution centers.

We support well-being in women and teens, so they can unleash their possibilities.

Approximately 91% of our associates and the majority of our guests are women and their well-being, as well as the well-being of our youth, is critical to their ability to succeed. That's why we view philanthropic donations and volunteerism as investments that benefit our associates, guests and communities whose strength all contribute to our success.

Turnover can cost up to 2X an employee's salary3

More than 85% of beauty shoppers are interested in clean beauty products4

Energy efficiency can tie directly to operational expense savings

Charitable giving affects 73% of Americans' spending decisions5

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Suppliers

We believe sourcing from a diverse base of suppliers ensures we benefit from a wide variety of expertise and perspectives. We actively seek businesses with supplier diversity certifications and share information with qualified businesses about the benefits of certification. Learn more

Stores and e-commerce

We meet the needs of our diverse guests wherever they shop-in our stores and online. We train our beauty-loving associates to make all guests feel welcome and help them find the products and services they are looking for. Learn more

Products

We're proud to support beauty entrepreneurs with specific programs designed to ensure inclusivity through support of founders who identify as Black, Hispanic, Asian American/ Pacific Islander and members of the LGBTQ+ community. Supporting up- and-coming businesses provides our guests with more choice and allows them to also support entrepreneurial spirit. Learn more

Workplace

Champion diversity is a core value- one that all associates strive to infuse into their daily work. We ensure oversight and leadership of DEI at the highest levels of the company, including in our corporate offices, distribution centers and stores. Our aspiration is to create an inclusive, safe and equitable environment for all-sothat we can maintain high levels of associate engagement while focusing on our guests. Learn more

Community

The Ulta Beauty Charitable Foundation's aspiration is for all women and teens to have access to the resources and support they need to support healthy minds, strong bodies and deep connections with others. Together with leading nonprofits, our foundation reaches women and teens across the U.S. Learn more

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Progress against our commitments

Ulta Beauty uses the power of beauty to make a positive impact on our industry and the world.

As we work to influence change in our industry, many of the outcomes of our efforts will be qualitative, far-reaching and long term. At the same time, we have made several quantitative and time-bound commitments across various areas of our business. These include our science-based emissions reduction target, which was approved by the Science Based Targets initiative (SBTi) in 2023.

The information in the table below represents the progress we made toward our goals in 2023. New goals we set for 2024 can be found throughout this report. We will continue reporting progress towards our goals in future ESG Reports.

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Protecting and enriching our culture

To be at the heart of the beauty community we need talented people at the heart of our company. We're proud of the world-class culture we've built over the past 33 years and believe it's one of the biggest drivers of our continued success.

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.

Insights from associates bear this out: during our annual culture survey, we continue to meet or exceed industry benchmarks for associate engagement. During our most recent survey, we learned that our people feel united by a sense of purpose and are comfortable being themselves at work. For the first time in 2023, we also conducted a survey specifically for job candidates who receive offers to work at Ulta Beauty. Survey findings, particularly from prospective associates just beginning to learn about our company, confirm that our caring culture is a magnet for talent.

GOAL FOR 2024:

Strive to maintain overall retention

We are proud of our historically high levels of associate retention. In 2024, we set a goal to strive to maintain this level of performance (for all except seasonal and temporary associates). We will do this through continued focus on associate engagement, development, competitive pay and strong benefits offerings.

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How we manage and engage talent

We continue to invest in our People Success function to support all associates and to remain an employer of choice. This means helping individual associates grow their careers, with a refreshed competency model to drive consistency in our talent management processes and give us clear ways to measure success. It also means continuing to think about our workforce as one team, and identifying the talent today who will lead our business into the future. A major focus in 2023 was developing succession plans for key roles to improve our bench depth and readiness, as well as offering intentional development opportunities.

Through inclusive recruiting strategies, equitable talent management processes and bespoke career development opportunities, we're cultivating a workforce that is representative of our guests' diverse lived experiences and the communities in which we operate. Our inclusive recruiting strategy focuses on talent acquisition, development, training and associate engagement and retention. Within our early-career recruiting workstream, we conduct outreach to students from under-resourcedcommunities-just one example of our dynamic recruiting approach.

Keeping associates safe amid organized retail crime

Nothing is more important than associate and guest safety. Ulta Beauty is deeply committed to investing in ways we can address organized retail crime (ORC), theft and enhance overall safety in our stores. While this widespread problem is not unique to Ulta Beauty and one we cannot solve alone, we've taken a range of actions to move the needle in the right direction and mitigate the impacts of these incidents.

• Partnerships-Ulta Beauty is working with industry peers, as well as community leaders, landlords, retailers, district attorney offices, law enforcement, ORC alliances and government at all levels to push for legislative and law enforcement action to disrupt ORC efforts.
• Staffing-We strategically added resources and people to our Field Loss Prevention and ORC teams to provide more support to our stores. ORC managers conduct in-store visits to raise awareness about how to respond to and report ORC issues and conduct events with law enforcement.
• Training-We created an Introduction to ORC training course for all in-store associates and provide reference guides to reinforce learning.
• Protective Measures-To protect merchandise most frequently targeted by ORC and shoplifting, such as fragrances, we have installed secure fixtures to the majority of our stores, with added staffing to ensure an elevated guest experience.
• Strategic Support-EPICenter, our 24/7 strategic support center, operates as a single point of contact for associates to report safety incidents. It also performs remote monitoring and keeps stores informed about local safety incidents that could impact them and other business disruptions.