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Ulta Beauty Inc - Stock Quote ULTA

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Morningstar's Ulta Beauty Inc Stock Analysis

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Bolstered by Its Strategic Initiatives, Narrow-Moat Ulta’s Brand Provides a Competitive Edge

David Swartz Equity Analyst

Business Strategy and Outlook

| David Swartz |

We think Ulta Beauty’s brand strength provides a narrow moat and has allowed it to thrive since the worst of the coronavirus crisis, which disrupted its store operations. Over the past decade, Ulta has become the largest specialty beauty retailer in the United States through store openings, product and brand introductions, improved marketing, and, with more than 37 million members, an enhanced loyalty program. Ulta’s sales increased to $8.6 billion in 2021 from $912 million in 2007 as it opened more than 1,000 stores and its stores have become more productive. Ulta’s success has made it a desirable partner for prestige, mass, and emerging beauty brands. While the firm faces intense competition and is affected by innovation and product cycles in cosmetics, we think it has developed a following that has allowed it to take share from mall-based stores while competing effectively against wide-moat Amazon and other e-commerce. We believe teen girls and women like to sample products in Ulta’s stores and that its salons, selection, promotions, and service encourage frequent visitation.

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Ulta Beauty Inc's Company Profile

Business Description

With more than 1,300 stores and a partnership with Target, Ulta Beauty is the largest specialized beauty retailer in the U.S. The firm offers makeup (43% of 2021 sales), fragrances, skin care, and hair care products (20% of 2021 sales), 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
Industry Specialty Retail
Most Recent Earnings Apr 30, 2022
Fiscal Year End Jan 28, 2023
Stock Type Cyclical
Employees 40,500