ULTA
#Again, when you're giving guidance, there's a range of outcomes, right, that you're looking at, a continuum.
And so, we feel comfortable that between having flexibility on the upside to do better with promotion tactics.
I mentioned earlier, other benefits coming out of supply chain investments maybe quicker than we had originally thought, and just other stronger retail trends that drive a lot of leverage on fixed-store cost.
So a combination of those things, and as we look at the range, we feel very comfortable that we can stick to our target.
The promotional environment what, that we're ---+.
Yes, the best way to think about it is that we compete across a lot of dimensions.
So we compete with I like to say 70,000 places on any given day that you can beauty, because we offer all the product categories and price points.
So department stores are certainly one source.
But we also compete with mass, with drug, online retailers, so it's really across the board.
Promotional environment, for us, what I feel good about is the quarter that we had with consistent levels of promotion a year ago.
I think is a really good way to think about the underlying health of our business, and that we're always going to make sure that we're providing a great value to our guests.
And so, there's always going to be some levels of coupons or promotions in store, but certainly, our loyalty programs allow us to get that much more focused and targeted and we've been doing that over the last few years.
So I feel like we've got good control over our levers.
We've got levers we use as we need them.
And more importantly, we're really just in an environment where beauty is certainly, it's a growing category, it's very active, there's a lot of players.
Nobody is doing exactly what we do, so we really try to just play our offense.
And that's why we're talking about really continued investment in the long term of our business.
Because obviously, the beauty enthusiast is voting with her dollars.
We are not complacent, we are not perfect, so we know we just have to stay on top of our game.
Yes, so I'd start by saying we don't give, as we said before, we don't give specific numbers on that.
But I'd say increasingly, many ---+ most of our stores, certainly more than half, have at least one boutique in them.
And as we continue to grow.
I think if you look at the history of what we've talked about, we said at the beginning of last year that we started the year, started 2016 with approximately 200 of each shipped Clinique and Lancome, and 700 of benefit.
And then we added about 500 boutiques last year, and this year, as we said, another 700.
So increasingly, we will be reaching pretty much the whole fleet with at least one over time.
And we think that's important to continue to elevate the experience and invest in our stores, as <UNK> has said.
As far as the mix between prestige and mass, we really focus on making sure the entire store is growing.
Certainly prestige has been leading, but our mass business across cosmetics, for sure, but also skin care and bath has also been contributing in a very strong way to our overall business.
And that's really important, because that's ultimately what our guest comes to us for is that mix.
So as much as we talk about and we spend a lot of time today talking about prestige boutique investments, we've been equally as focused on building all parts of our store.
We're investing in our hair care business, adding a lot of new brands there.
We're, as I said, building our mass side.
So the balance overall is important.
We don't see a real dramatic shift.
Might gradually continue to grow within prestige, but we're focused on keeping that balance for the long term.
Yes, so as far as D&A and CapEx is concerned I think D&A we said $215 million.
$250 million.
$250 million, sorry, $2-5-0 million for 2017 is the estimate.
And CapEx, <UNK>, it's hard for me to sit here today and think about how we could do any more.
How could we take on anymore with the capacity that we have.
So with respect to CapEx, I've learned now never say never, but it's hard to imagine that the number could get larger than what we're looking at for 2017.
It's a large undertaking, but again, a lot of it is going into the store fleet so we think there's great payback there and great prospects for our investors over the long term.
One other thing I would say about CapEx, so again, getting back to that $80 million number year over year, there's a lot of other things going on behind the scenes, right, besides just the MAC and Clinique and Lancome boutiques.
There's things like Estee Lauder; we introduced it last year, going much larger with it this year across the fleet, 250 comp stores, up an additional 100 new stores.
There's things like that.
Remember when we go into the stores and we do these boutique drop-ins, we're also taking the opportunity to refresh the store right, on a pretty large scale.
So we're going in with new nail fixtures, fragrance fixtures, updating the Ulta Beauty collection where it makes sense.
So there's a lot of activity going on in the store just to keep it fresh.
When she comes back, it's like a new shopping experience, and we just want to continue to do that.
So that's the CapEx explanation.
Great, and the Ulta Beauty collection I think we break it out.
It's between 3% and 4% of the business, similar online to in store, which is true for most of our business.
But actually I'm really proud about our little Ulta Beauty collection, the growth rate.
<UNK> talked about this.
The mass side of our business is very important to our guests, and our private label brand, we've really doubled down and making that a stronger brand than we had, and I'm proud of it.
So part of the investments in store have to do with making sure that we're choosing fixtures and showcasing that brand to its best possible light.
We've invested in, we bring down the packaging, we're really bringing newness to that line much more rapidly and it's doing very, very well.
So I don't know if there's a cap.
Certainly, I like it; it's a great margin and our guess was the response to our guests is wonderful.
The constraint would be we're not going to be too big in anything.
We want this to be a mosaic of brands that our guests want and love.
Having said that, we know it can be bigger, it will be bigger, and we have a fair amount of space dedicated.
We can make that space even more productive over time and we will.
But we're proud about what's happening with Ulta Beauty collection.
Thank you.
Yes, I would say again, the quarter, when we look at individual quarter, every quarter has a special set of challenges and opportunities right.
And really over the last couple years, there's been a lot of investments.
So I think we saw last year in the fourth quarter, we deleveraged on the SG&A line.
For the year, we were flattish.
But the fourth quarter included some consulting expense, we were thinking about our analyst day and refreshing the five-year plan.
We were ---+ the business was strong so we pulled forward some of our supply chain expense to try to get a head start on things.
We also had people decisions that we made to get more footsteps on the ground to make sure we could ramp up some these investments even quicker.
So again, we're lapping that in 2016, and you saw fourth quarter this year, we saw the fruits of our labor, so to speak, in a lot of different ways.
We got a lot of leverage this year, because we've gotten an early start on a lot of those things.
So I think we mention as we look at 2017 now, SG&A, slight leverage I would say for the full year.
So there's still a number of things that we need to work on people wise and tool wise, and we're just being pragmatic and doing what we think is good for the business for the long term.
Thank you.
I just want to reiterate we're really proud about the year that we had in 2016, and I'd really like to thank our 32,000 associates for delivering that year and all their efforts to continue to drive our success in 2017 and beyond.
I appreciate your interest in Ulta Beauty and look forward to speaking with everyone soon.
Take care.
