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    Ulta Salon, Cosmetics & Fragrance, Inc.

1000 Remington Blvd.

Bolingbrook, IL 60440

Tel: (630) 410-4800

January 4, 2011

VIA EDGAR

Mr. H. Christopher Owings

Assistant Director

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549-3628

              Re:

    Ulta Salon, Cosmetics & Fragrance, Inc.

Form 10-K for the fiscal year ended January 30, 2010

Filed March 31, 2010

Forms 10-Q for the periods ended May 1, 2010, July 31, 2010, and October 30, 2010

Filed June 3, 2010, September 2, 2010, and December 2, 2010, respectively

Definitive Proxy Statement on Schedule 14A

Filed May 7, 2010

File No. 1-33764

Dear Mr. Owings:

          On behalf of Ulta Salon, Cosmetics & Fragrance, Inc. (“Ulta” or the “Company”), I am
submitting our responses to the comment letter dated December 3, 2010 addressed to Mr. Carl Rubin,
Ulta’s President and Chief Executive Officer. The comments in your letter are duplicated below and
are followed immediately by the Company’s responses.

Form 10-K for the fiscal year ended January 30, 2010

Item 1A. Risk Factors, page 14

    1.

    Please delete the language in the last two sentences of the opening paragraph in which you
state that other unknown or immaterial risks may also impair your business operations. All
material risks should be described in your disclosure. If risks are not deemed material, you
should not reference them.

Division of Corporation Finance

Securities and Exchange Commission

January 4, 2011

Page 2 of 11

We will revise our “Risk Factors” section in future filings to delete the language in the last two
sentences of the opening paragraph in which we state that other unknown or immaterial risks may
also impair our business operations.

Item 9A. Controls and Procedures, page 44

    2.

    We note that you state that your disclosure controls and procedures were effective “to
ensure that the information required to be disclosed by [you] in [y]our reports that [you]
file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified.” Please supplementally confirm, if true,
that your officers concluded that your disclosure controls and procedures were also effective
to ensure that information required to be disclosed in the reports that you file or submit
under the Exchange Act is accumulated and communicated to your management, including your
principal executive and principal financial officer, to allow timely decisions regarding
required disclosure. In addition, please confirm that you will revise future filings,
including any amendments to filings as applicable, accordingly. See Exchange Act Rule
13a-15(e). This comment also applies to your Form 10-Q for the fiscal period ended May 1,
2010, your Form 10-Q for the fiscal period ended July 31, 2010 and your Form 10-Q for the
fiscal period ended October 30, 2010.

Our Chief Executive Officer and Chief Financial Officer concluded that as of January 30, 2010
(fiscal 2009), May 1, 2010 (first quarter 2010), July 31, 2010 (second quarter 2010) and October
30, 2010 (third quarter 2010), disclosure controls and procedures were effective in ensuring that
information required to be disclosed in the reports that the Company filed or submitted under the
Exchange Act was accumulated and communicated to the Company’s management, including our principle
executive officer and principal financial officer, to allow timely decisions regarding required
disclosure. We confirm that we will revise our future filings, including any amendments to filings
as applicable, accordingly.

Item 15. Exhibits and Financial Statement Schedules, page 46

Statements of Income, page 50

    3.

    Your discussion of operating expenses on page 35 indicates a portion of depreciation and
amortization is classified within selling, general and administrative expenses and excluded
from cost of goods sold. Please revise the description of the cost of goods sold line item
in future filings to comply with SAB Topic no. 11.B.

We acknowledge the Staff’s comment and believe our accounting and disclosure is in compliance with
current generally accepted accounting principals (GAAP) and Securities and
Exchange Commission (SEC) rules and guidance. We do not believe the guidance prescribed by SAB
Topic 11B applies to our facts given that the Company is not excluding depreciation and

Division of Corporation Finance

Securities and Exchange Commission

January 4, 2011

Page 3 of 11

amortization from cost of sales or operating expenses. The following table sets
forth depreciation and amortization expense for the periods indicated:

    Fiscal

    2009

    2008

    2007

    Depreciation and amortization included in
cost of sales

    $
    51,919

    $
    42,751

    $
    34,533

    Depreciation and amortization included in
selling, general and adminstrative expenses

    10,247

    8,694

    4,970

    Total
depreciation and
amortization expense

    $
    62,166

    $
    51,445

    $
    39,503

As described on page 35 of the Form 10-K, cost of sales includes depreciation and amortization
related to warehousing and distribution activities as well as depreciation and amortization related
to store fixturing and construction. Selling, general and administrative (SGA) expenses, which are
considered operating expenses, includes depreciation and amortization for all assets except those
related to our retail and warehouse operations, which is included in cost of sales, meaning SGA
includes depreciation and amortization for general corporate use assets only. This disclosure is
replicated in our policy note on page 58 of the Form 10-K which describes cost of sales and
selling, general and administrative expenses.

We believe our existing disclosure is consistent with current GAAP and SEC requirements.

2. Summary of significant accounting policies, page 55

General

    4.

    We assume the absence of disclosure related to segment reporting suggests you have
concluded that you have only one reportable segment. Please explain to us in detail how you
determined you have one reportable segment. Please also tell us if you aggregate operating
segments, and if so, how the aggregation into one reportable segment complies with the
aggregation requirements of FASB ASC 280-10-50. Lastly, revise your future disclosure to
comply with the requirements of FASB ASC 280-10-50-21. Please show us what your revised
disclosure will look like.

The Company has determined that it has three operating segments: retail stores, salon services and
e-commerce. The operating results for these operating segments are reviewed regularly by
our Chief Executive Officer, who operates as our chief operating decision maker (CODM). The salon
services and e-commerce operating segments do not meet the quantitative thresholds prescribed by
ACS 280-10-50-12 for separate disclosure. We believe that salon services and e-commerce also meet
the majority of the aggregation criteria in ACS 280-10-50-11 which allows both operating segments
to be combined with retail stores into one reportable segment pursuant to 280-10-50-13. In
addition, management does not believe that separate disclosure would be helpful to the readers of
the financial statements. We disclose in the “Basis of presentation” section on page 34 of the
Form 10-K that our salon service revenue represents less than 10% of our combined product sales and
service revenues. E-commerce sales were low single digits

Division of Corporation Finance

Securities and Exchange Commission

January 4, 2011

Page 4 of 11

compared to the Company’s fiscal 2009 combined net sales.

We will revise future filings to include the following disclosure in both our Management Discussion
and Analysis and notes to financial statements:

Segment reporting

The Company has determined its operating segments on the same basis that it uses to internally
evaluate performance. The Company has combined its three operating segments: retail stores, salon
services and e-commerce, into one reportable segment.

    5.

    Please disclose in tabular form for each period presented the amount or percentage of total
revenue contributed by each class of similar products or services. In this regard we note
you offer salon services and products including make-up, skincare, fragrances and styling
tools. Please refer to FASB ASC 280-10-50-40. See also Item 101(c)(1) of Regulation S-K as
it relates to disclosure in your Business description.

We have considered FASB ASC 280-10-50-40 with respect to our disclosure and believe we are in
compliance in all material respects. We have determined that salon services revenue is not
material and does not require separate disclosure. We also do not believe that separate disclosure
of salon services revenue would be beneficial to readers of the financial statements. We describe
for our reader in “Item 1. Business, Merchandising” beginning on page 9 of the Form 10-K that our
retail stores carry a variety of beauty-related products including prestige and mass cosmetics,
fragrance, haircare, skin care, bath and body products and salon styling tools. We believe all of
these products are part of one product category, personal care products.

We also believe we are in compliance with Regulation S-K Item 101(c)(1) generally and Item
101(c)(1)(i) specifically in all material respects in “Item 1. Business, Overview” beginning on
page 3 of the Form 10-K because we provide the reader with a significant amount of qualitative
information describing our products, services, principal markets and methods of distribution. We
do not believe additional disclosure is required based on our conclusion that salon services
revenue is immaterial and that all of the retail products sold in our retail stores are part of one
product category, personal care products.

Revenue recognition, page 57

    6.

    You disclose that e-commerce sales are recorded upon shipment of merchandise. Please
expand your disclosure to state when title transfers to the customer. Further, please
explain to us how your accounting policy complies with the delivery and performance
requirements of SAB Topic 13:A. If shipping terms determine risk of loss during shipment
and/or title transfer to the customer, please explain the terms to us and revise your
disclosure to clarify these terms. If revenue on e-commerce sales is recognized prior to the
transfer of title and

Division of Corporation Finance

Securities and Exchange Commission

January 4, 2011

Page 5 of 11

    delivery of the product to the customer, please clarify how your policy complies with
GAAP.

E-commerce sales were low single digits compared to the Company’s fiscal 2009 combined net sales.
E-commerce sales are not material to our financial results and, therefore, we do not believe
further disclosure in our financial statements is required or provides any additional benefit to
users of our financial statements. Currently, we record sales at the time of shipment by our third
party carrier because we believe this is the most reliable measurement from a control perspective.
We estimate that in-transit goods represented approximately $200,000 of revenue and $50,000 of
margin at any one quarterly balance sheet date during fiscal 2009. We do not believe that the
benefit associated with estimating in-transit goods outweigh the cost. If e-commerce sales become
material to our financial results in the future, we will disclose our accounting policy and ensure
that it is consistent with SAB Topic 13A.

    7.

    Please explain to us and disclose your policy for granting product returns. Further,
please explain to us how accurate your historical estimates for the past three fiscal years
have been with respect to estimating your allowance for sales returns, and how variances
between actual and estimated returns are tracked and reviewed by management. Lastly,
reference is made to your valuation and qualifying accounts disclosure on page 68. Explain
to us in detail why you did not disclose the allowance for sales returns activity, or revise
your disclosure. Please refer to Rules 5-04 and 12-09 of Regulation S-X.

The Company’s return policy generally provides for a full refund of the customer’s purchase price
as long as the product is returned within 60 days of the original purchase provided certain
conditions are met. In future filings we will revise our “Revenue recognition” disclosure to
indicate our policy for granting product returns.

Actual product returns are tracked and our sales return reserve is adjusted on a monthly basis
based on data from our point of sale (POS) system. The sales return reserve represents the
difference between the estimated net sales return and the corresponding gross margin adjustment,
and the reserve is included in the “Other accrued liabilities” item of the “Accrued liabilities”
note on page 61 of the Form 10-K.

The historical year end sales return estimates as compared to the actual results are as follows:

    Fiscal

    (Dollars in thousands)

    2009

    2008

    2007

    Sales return estimate (A)

    $
    (1,289
    )

    $
    (1,182
    )

    $
    (1,013
    )

    Cost of sales adjustment

    736

    677

    588

    Net reserve

    $
    (553
    )

    $
    (505
    )

    $
    (425
    )

    Sales return estimate (A)

    $
    (1,289
    )

    $
    (1,182
    )

    $
    (1,013
    )

    Actual returns

    (1,338
    )

    (1,023
    )

    (738
    )

    Variance (unfavorable) / favorable

    $
    (49
    )

    $
    159

    $
    275

Division of Corporation Finance

Securities and Exchange Commission

January 4, 2011

Page 6 of 11

We believe the above analysis documents that our historical sales return reserve represents a
reasonable estimate in all material respects.

The Company’s sales return reserve has not been disclosed in past filings because the Company did
not consider its sales return reserve to be a valuation and qualifying account as it does not
represent a deduction from a related balance sheet account as defined in Rule 12-09 or Regulation
S-X. In addition, the Company does not believe that the sales return reserve qualifies for
separate disclosure due to its immaterial nature. We will disclose this information in future
filings should we determine it to be material.

    8.

    Please expand your policy for unredeemed gift cards to indicate whether or not gift cards
are sold with expiration dates. Further, explain to us and disclose how revenue is
recognized on unredeemed gift cards. Lastly, tell us and disclose the amount of deferred
gift card revenue for the past two fiscal years ended January 30, 2010 and January 31, 2009.

Our gift cards do not expire and, historically, we have not recognized revenue from unredeemed gift
cards due to statutory escheat requirements as well as materiality considerations. We are
currently reevaluating our gift card program structure. Unearned gift card revenue as of January
30, 2010 and January 31, 2009 was $9.9 million and $7.9 million, respectively, which is included in
the “Accrued customer liabilities” item of the “Accrued liabilities” note on page 61 of the Form
10-K.

In future filings we will revise our “Revenue recognition” disclosure to indicate the Company’s
treatment of unredeemed gift cards and the amount of deferred gift card revenue for the past two
fiscal years.

Cost of sales, page 58

    9.

    Please disclose your policy for classifying shipping and handling costs in the statements
of income. If shipping costs or handling costs are significant and are not classified in
cost of sales, disclose the amount(s) of these costs and the line item that includes them.
Please refer to FASB ASC 605-45-50-2.

E-commerce sales were low single digits compared to the Company’s fiscal 2009 combined net sales.
E-commerce shippin