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Ulta Beauty Inc ULTA

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Ulta Beauty’s Q4 Results Were Overshadowed by Soft 2021 Guidance and an Unexpected CEO Transition

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Narrow-moat Ulta Beauty’s sales and earnings in 2020’s fourth quarter beat our estimates, but disappointing 2021 guidance and the news that Mary Dillon will be replaced as CEO by current president Dave Kimbell sent its shares down about 8% in post-market trading. We expect to lift our per share fair value estimate of $221 by a mid-single-digit percentage but view Ulta as overvalued (even considering the post-market slide).

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Company Profile

Business Description

Ulta Beauty is the largest specialized beauty retailer in the U.S. with more than 1,260 stores. The firm offers makeup (44% of 2020 sales), fragrances, skincare and haircare (20% of 2020 sales) products, and bath and body items. Ulta offers private-label products and merchandise from more than 500 vendors. It also offers salon services, including hair, makeup, skin, and brow services, in all stores. Most Ulta stores are approximately 10,000 square feet and are in suburban strip centers. Ulta was founded in 1990 and is based in Bolingbrook, Illinois.

1000 Remington Boulevard, Suite 120
Bolingbrook, IL, 60440
T +1 630 410-4800
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings Jan 31, 2021
Fiscal Year End Jan 29, 2022
Stock Type Cyclical
Employees 37,000