How much a stock’s price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you’d invested in Ulta Beauty (ULTA) ten years ago? It may not have been easy to hold on to ULTA for all that time, but if you did, how much would your investment be worth today?
Ulta Beauty’s Business In-Depth
With that in mind, let’s take a look at Ulta Beauty’s main business drivers.
Bolingbrook, IL-based, Ulta Beauty Inc., previously known as Ulta Salon, Cosmetics & Fragrance, Inc., is a leading beauty retailer in the United States. Founded in 1990, the company changed its name to Ulta Beauty in January 2017.
The company offers a wide range of products including cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools in stores. It sells more than 25,000 products from about 500 well-established and emerging beauty brands across all categories and price points. We note that the company’s skincare category has been standing out in particular for a while now, given consumers’ rising consciousness.
Meanwhile, the beauty products retailer also provides private label products comprising Ulta Beauty Collection branded cosmetics, skincare, and bath products. Additionally, the company operates a full-service salon in every store offering hair, skin and brow services. Additionally, it offers products through its Website, ulta.com, as well as mobile applications. The products offered by the company include the prestige and mass beauty brands.
As part of its value proposition, Ulta Beauty provides a range of loyalty programs through its Customer Relationship Management platform. It also offers frequent promotions, coupons, in-store events and gifts. The company also makes use of a range of media platforms to advertise products as well as generate awareness. The company strives to boost distribution center capabilities to better support store footfall and online demand.
The company has a strong vendor base and holds partnerships with companies such as Estee Lauder, L’Oréal and Shiseido. Ulta Beauty works closely with vendors to provide improved growth platforms for new and existing brands.
As of Oct 29, 2022, Ulta Beauty operated 1,343 stores. For fiscal 2022, the company expects 47 net new stores and 33 store remodeling and relocation projects.
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Ulta Beauty ten years ago, you’re likely feeling pretty good about your investment today.
A $1000 investment made in February 2013 would be worth $5,338.94, or a gain of 433.89%, as of February 6, 2023, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 173.37% and the price of gold increased 7.10% over the same time frame in comparison.
Analysts are forecasting more upside for ULTA too.
Ulta Beauty has outpaced the industry in the past three months. The company has been benefiting from its omnichannel strength, especially buy online, pickup in store. Also, the skin care category has been gaining from consumers’ rising interest in self-care and the company’s product newness. These upsides aided third-quarter fiscal 2022 results, wherein the top and bottom lines grew year over year and beat the Zacks Consensus Estimate. The company witnessed growth in all major categories, and all its store and digital channels. Ulta Beauty also saw a higher market share in prestige beauty compared with the year-ago period. Considering the third-quarter performance and anticipations for the fourth quarter, management raised its fiscal 2022 view. However, it expects SG&A deleverage and increased supply-chain costs to persist in fiscal 2022.
Over the past four weeks, shares have rallied 7.11%, and there have been 2 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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