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<div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. Business and basis of presentation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Ulta Salon, Cosmetics & Fragrance, Inc. (Company or Ulta) was incorporated in the state of Delaware on January 9, 1990, to operate specialty retail stores selling cosmetics, fragrance, haircare and skincare products, and related accessories and services. The stores also feature full-service salons. As of July 30, 2011, the Company operated 415 stores in 42 states, as shown in the table below: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="24%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="1%"> </td> <td width="24%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="1%"> </td> <td width="12%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Number of</b></td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Number of</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>State</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>stores</b></td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>State</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>stores</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Alabama </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">7</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Mississippi </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Arizona </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">23</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Missouri </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">4</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Arkansas </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Nebraska </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">2</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">California </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">36</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Nevada </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Colorado </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">11</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New Hampshire </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Connecticut </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New Jersey </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">12</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Delaware </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New Mexico </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Florida </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">30</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New York </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">13</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Georgia </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">18</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">North Carolina </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">16</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Idaho </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Ohio </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">12</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Illinois </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">35</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Oklahoma </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">7</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Indiana </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">8</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Oregon </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Iowa </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">4</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Pennsylvania </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">18</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Kansas </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Rhode Island </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Kentucky </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">4</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">South Carolina </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Louisiana </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Tennessee </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Maine </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">2</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Texas </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">54</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Maryland </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Utah </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Massachusetts </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Virginia </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">11</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Michigan </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">12</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Washington </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Minnesota </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">9</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Wisconsin </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr style="font-size: 1px"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">  </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top"> </td> <td valign="top"> </td> <td> </td> <td align="center" valign="top"> </td> <td> </td> <td nowrap="nowrap" align="right" valign="top" style="border-top: 1px solid #000000"> </td> <td align="right" valign="top" style="border-top: 1px solid #000000"> </td> <td nowrap="nowrap" valign="top" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">  </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top"> </td> <td valign="top"> </td> <td> </td> <td align="center" valign="top"><b>Total</b> </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top"><b>415</b></td> <td nowrap="nowrap" valign="top"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying unaudited financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and the U.S. Securities and Exchange Commission’s Article 10, Regulation S-X. In the opinion of management, the accompanying financial statements reflect all adjustments, which are of a normal recurring nature, necessary to fairly state the financial position and results of operations and cash flows for the interim periods presented. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s business is subject to seasonal fluctuation. Significant portions of the Company’s net sales and net income are realized during the fourth quarter of the fiscal year due to the holiday selling season. The results for the three and six months ended July 30, 2011 are not necessarily indicative of the results to be expected for the fiscal year ending January 28, 2012, or for any other future interim period or for any future year. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">These interim financial statements and the related notes should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2011. All amounts are stated in thousands, with the exception of per share amounts and number of stores. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. Summary of significant accounting policies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Information regarding the Company’s significant accounting policies is contained in Note 2, “Summary of significant accounting policies,” to the financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2011. Presented below in this and the following notes is supplemental information that should be read in conjunction with “Notes to Financial Statements” in the Annual Report. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Fiscal quarter</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s 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 quarters in fiscal 2011 and 2010 ended on July 30, 2011 and July 31, 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Share-based compensation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company measures share-based compensation cost on the grant date, based on the fair value of the award, and recognizes the expense over the requisite service period for awards expected to vest. The Company estimated the grant date fair value of stock options using a Black-Scholes valuation model using the following assumptions for the periods indicated: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six months ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 30, 2011</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Volatility rate </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">54.2</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">58.8</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Average risk-free interest rate </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">2.4</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">2.2</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Average expected life (in years) </div></td> <td> </td> <td> </td> <td align="right">6.3</td> <td> </td> <td> </td> <td> </td> <td align="right">4.8</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Dividend yield </div></td> <td> </td> <td colspan="2" align="right">None</td> <td> </td> <td> </td> <td colspan="2" align="right">None</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company granted 124 and 745 stock options during the six months ended July 30, 2011 and July 31, 2010, respectively. The weighted-average grant date fair value of these options was $28.62 and $11.38, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company recorded stock compensation expense of $2,388 and $2,487 for the three months ended July 30, 2011 and July 31, 2010, respectively. The Company recorded stock compensation expense of $5,196 and $4,222 for the six months ended July 30, 2011 and July 31, 2010, respectively. At July 30, 2011, there was approximately $21,290 of unrecognized compensation expense related to unvested options and restricted stock. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. Commitments and contingencies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Leases </i></b>— The Company leases stores, distribution and office facilities, and certain equipment. Original non-cancelable lease terms range from three to ten years, and store leases generally contain renewal options for additional years. A number of the Company’s store leases provide for contingent rentals based upon sales. Contingent rent amounts were insignificant in the three and six months ended July 30, 2011 and July 31, 2010. Total rent expense under operating leases was $23,127 and $20,135 for the three months ended July 30, 2011 and July 31, 2010, respectively. Total rent expense under operating leases was $44,984 and $39,594 for the six months ended July 30, 2011 and July 31, 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>General litigation </i></b>— In May 2010, a putative employment class action lawsuit was filed against the Company and certain unnamed defendants in state court in California. The plaintiff and members of the proposed class are alleged to be (or have been) non-exempt hourly employees. The suit alleges that Ulta violated various provisions of the California labor laws and failed to provide plaintiff and members of the proposed class with full meal periods, paid rest breaks, certain wages, overtime compensation and premium pay. The suit seeks to recover damages and penalties as a result of these alleged practices. On June 21, 2010, the Company filed its answer to the lawsuit. On January 12, 2011, the Company and plaintiffs engaged in a voluntary mediation. Although the Company continues to deny plaintiffs’ allegations, in the interest of putting certain of the claims behind it, the Company agreed in principle to settle all claims of the putative class consisting of non-exempt hourly hair designers in the salon department within the California retail stores. The settlement, which is not an admission of liability, is subject to final documentation and Court approval. Counsel for the plaintiffs has agreed to dismiss without prejudice the claims of all other putative class members. The proposed settlement amount is not material. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company is also involved in various legal proceedings that are incidental to the conduct of its business. In the opinion of management, the amount of any liability with respect to these proceedings, either individually or in the aggregate, will not be material. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4. Notes payable</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s credit facility is with Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent and a Lender thereunder, JPMorgan Chase Bank, N.A. as a Lender, and PNC Bank, National Association, as a Lender. The facility provides maximum credit of $200,000 through May 31, 2013 and is available for working capital and general corporate purposes. The facility provides maximum borrowings equal to the lesser of $200,000 or a percentage of eligible owned inventory, and contains a $10,000 subfacility for letters of credit. The credit facility agreement contains a restrictive financial covenant requiring the Company to maintain tangible net worth of not less than $200,000. The Company’s tangible net worth was $478,032 at July 30, 2011. Substantially all of the Company’s assets are pledged as collateral for outstanding borrowings under the facility. Outstanding borrowings will bear interest at the prime rate or Libor plus 2.00% and the unused line fee is 0.25%. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 30, 2011 and January 29, 2011, the Company had no borrowings outstanding under the credit facility. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5. Fair Value Measurements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates their estimated fair values due to the short maturities of these instruments. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">On February 3, 2008, the Company adopted the ASC rules for fair value measurements and disclosures. The adoption had no impact on the Company’s financial statements. The new rules established a three-tier hierarchy for fair value measurements, which prioritizes the inputs used in measuring fair value as follows: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Level 1 — observable inputs such as quoted prices for identical instruments in active markets.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Level 2 — inputs other than quoted prices in active markets that are observable either directly or indirectly through corroboration with observable market data.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Level 3 — unobservable inputs in which there is little or no market data, which would require the Company to develop its own assumptions.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 30, 2011, the Company held financial liabilities of $1,936 related to its non-qualified deferred compensation plan. The liabilities have been categorized as Level 2 as they are based on third-party reported net asset values which are based primarily on quoted market prices of underlying assets of the funds within the plan. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. Net income per common share</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a reconciliation of net income and the number of shares of common stock used in the computation of net income per basic and diluted share: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three months ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six months ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>July 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>July 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td style="border-bottom: 0px solid #000000"> </td> <td style="border-bottom: 0px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td style="border-bottom: 1px solid #000000"> </td> <td style="border-bottom: 1px solid #000000"> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net income </div></td> <td> </td> <td align="left">$</td> <td align="right">23,905</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">13,062</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">47,201</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">26,723</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Denominator for basic net income per share — weighted-average common shares </div></td> <td> </td> <td> </td> <td align="right">61,126</td> <td> </td> <td> </td> <td> </td> <td align="right">58,727</td> <td> </td> <td> </td> <td> </td> <td align="right">60,840</td> <td> </td> <td> </td> <td> </td> <td align="right">58,517</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Dilutive effect of stock options and non-vested stock </div></td> <td> </td> <td> </td> <td align="right">2,115</td> <td> </td> <td> </td> <td> </td> <td align="right">1,945</td> <td> </td> <td> </td> <td> </td> <td align="right">2,173</td> <td> </td> <td> </td> <td> </td> <td align="right">1,988</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td style="border-top: 0px solid #000000"> </td> <td style="border-top: 0px solid #000000"> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Denominator for diluted net income per share </div></td> <td> </td> <td> </td> <td align="right">63,241</td> <td> </td> <td> </td> <td> </td> <td align="right">60,672</td> <td> </td> <td> </td> <td> </td> <td align="right">63,013</td> <td> </td> <td> </td> <td> </td> <td align="right">60,505</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net income per common share: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Basic </div></td> <td> </td> <td align="left">$</td> <td align="right">0.39</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.22</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.78</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.46</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Diluted </div></td> <td> </td> <td align="left">$</td> <td align="right">0.38</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.22</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.75</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.44</td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">The denominators for diluted net income per common share for the three months ended July 30, 2011 and July 31, 2010 exclude 124 and 1,061 employee stock options, respectively, due to their anti-dilutive effects. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The denominators for diluted net income per common share for the six months ended July 30, 2011 and July 31, 2010 exclude 252 and 1,061 employee stock options, respectively, due to their anti-dilutive effects. </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="24%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="1%"> </td> <td width="24%"> </td> <td width="1%"> </td> <td width="12%"> </td> <td width="1%"> </td> <td width="12%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 0px solid #000000"><b>Number of</b></td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Number of</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>State</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>stores</b></td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>State</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>stores</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Alabama </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">7</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Mississippi </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Arizona </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">23</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Missouri </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">4</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Arkansas </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Nebraska </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">2</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">California </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">36</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Nevada </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Colorado </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">11</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New Hampshire </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Connecticut </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New Jersey </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">12</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Delaware </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New Mexico </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Florida </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">30</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">New York </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">13</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Georgia </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">18</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">North Carolina </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">16</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Idaho </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Ohio </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">12</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Illinois </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">35</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Oklahoma </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">7</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Indiana </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">8</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Oregon </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Iowa </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">4</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Pennsylvania </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">18</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Kansas </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Rhode Island </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">1</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Kentucky </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">4</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">South Carolina </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Louisiana </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Tennessee </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Maine </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">2</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Texas </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">54</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Maryland </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Utah </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">3</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Massachusetts </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Virginia </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">11</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Michigan </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">12</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Washington </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">6</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">Minnesota </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">9</td> <td nowrap="nowrap" valign="top"> </td> <td> </td> <td align="center" valign="top">Wisconsin </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top">5</td> <td nowrap="nowrap" valign="top"> </td> </tr> <tr style="font-size: 1px"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">  </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top"> </td> <td valign="top"> </td> <td> </td> <td align="center" valign="top"> </td> <td> </td> <td nowrap="nowrap" align="right" valign="top" style="border-top: 1px solid #000000"> </td> <td align="right" valign="top" style="border-top: 1px solid #000000"> </td> <td nowrap="nowrap" valign="top" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td align="center" valign="top"> <div style="margin-left:0px; text-indent:-0px">  </div></td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top"> </td> <td valign="top"> </td> <td> </td> <td align="center" valign="top"><b>Total</b> </td> <td> </td> <td nowrap="nowrap" align="right" valign="top"> </td> <td align="right" valign="top"><b>415</b></td> <td nowrap="nowrap" valign="top"> </td> </tr>  </table> </div> </div> </div>

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