Ulta Beauty, Inc. (ULTA), headquartered in Bolingbrook, Illinois, is a specialty beauty retailer offering a wide range of branded and private label beauty products. With a market cap of $26.7 billion, the company offers cosmetics, fragrance, skin, and hair care products, as well as salon services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and ULTA definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the specialty retail industry. ULTA boasts a diverse portfolio of approximately 25,000 products from 600 beauty brands, appealing to a wide range of consumer preferences. The company's partnership and investment in digital innovation have enhanced customer engagement and set industry standards. Its omnichannel retailing strategy, combined with a strong Ulta Beauty Rewards program, drives customer loyalty and provides valuable consumer insights for tailored experiences and promotions.
Despite its notable strength, ULTA slipped 1.8% from its 52-week high of $611.90, achieved on Dec. 5. Over the past three months, ULTA stock rose 16.5% outperforming the Dow Jones Industrials Average’s ($DOWI) 5.6% gains during the same time frame.
In the longer term, shares of ULTA climbed 30% on a six-month basis and surged 45.8% over the past 52 weeks, outperforming DOWI’s six-month gains of 12.1% and 8.6% returns over the last year.
To confirm the bullish trend, ULTA has been trading above its 50-day and 200-day moving averages since late April, with some fluctuations.
ULTA's strong performance is driven by enhanced in-store experiences, its expanding loyalty program with 46.3 million members, and exclusive brand launches like Beyoncé's Sacred hair care line. Its e-commerce growth and digital engagement are also key contributors, with 65% of online transactions via the app. ULTA's investments in digital capabilities and new store formats support long-term growth, despite near-term margin pressures from higher SG&A costs.
On Dec. 4, ULTA reported its Q3 results, and its shares closed up by 12.7% in the following trading session. Its EPS of $5.14 exceeded Wall Street expectations of $4.56. The company’s revenue was $2.9 billion, beating Wall Street forecasts of $2.7 billion. ULTA expects full-year EPS to be $25.20 to $25.50, and revenue is expected to be $12.3 billion.
ULTA’s rival, Bath & Body Works, Inc. (BBWI) has significantly lagged behind the stock, with a 26.7% dip on a six-month basis and 49.3% losses over the past 52 weeks.
Wall Street analysts are reasonably bullish on ULTA’s prospects. The stock has a consensus “Moderate Buy” rating from the 25 analysts covering it, and the mean price target of $625.24 suggests a potential upside of 4.1% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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