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 $19.3 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 has 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 27.5% from its 52-week high of $574.76, achieved on Mar. 14. Over the past three months, ULTA stock rose 3.5% underperforming the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 18.6% gains during the same time frame.
In the longer term, shares of ULTA dipped 15% on a YTD basis and fell 14.7% over the past 52 weeks, underperforming XLY’s YTD gains of 27.9% and 27% returns over the last year.
However, ULTA has been trading above its 50-day moving average since late November. The stock is trading above its 200-day moving average since early December.
ULTA's underperformance stems from consumers cutting back on non-essential spending amid economic uncertainty, impacting the company's sales.
On Dec. 5, ULTA reported its Q3 results, and its shares closed up by 9% in the following trading session. Its EPS of $5.14 surpassed Wall Street expectations of $4.47. The company’s revenue was $2.53 billion, beating Wall Street forecasts of $2.49 billion. ULTA expects full-year EPS to be between $23.20 and $23.75, and expects revenue in the range of $11.1 million to $11.2 million.
ULTA’s rival, Sally Beauty Holdings, Inc. (SBH) has taken the lead over the stock, declining 8.7% on a YTD basis and 4.9% over the past 52 weeks.
Wall Street analysts are moderately bullish on ULTA’s prospects. The stock has a consensus “Moderate Buy” rating from the 28 analysts covering it, and the mean price target of $445.80 suggests a potential upside of 7% 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. More news from Barchart- Cathie Woods Journey From Wallstreet Royalty to Being Villanized By the Media, “In Early 2021, We Could Do No Wrong” But Now "We Can Do Nothing Right According to the Media"
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