On Wednesday, shares of Ulta Beauty (ULTA - Free Report) are falling, down about 3.5% in midday trading after rumors are floating about that Amazon (AMZN - Free Report) is considering a partnership with high-end beauty e-commerce site Violet Grey.
Similar to Ulta and its key rival Sephora, Violet Grey is a multi-platform beauty business that is comprised of a website, a digital magazine, and brick-and-mortar store located on Melrose Place in Los Angeles. But what makes the company stand out is its focus on curation.
Founder Cassandra Huysentruyt Grey and her team have collaborated with top makeup artists and skincare experts to curate the “best of the best” when it comes to beauty products, as well as essential beauty tips, tricks, and inspiration. Grey is inspired by the glamour of Hollywood, and the brands on the company’s website reflect this: Tom Ford, Chanel, Dior, La Prairie, Charlotte Tillbury, among many others.
The beauty industry has long been considered the one retail area that is “Amazon-immune.” With many beauty products, especially makeup, customers still feel the need to go to a physical store to test those products out before they make any new purchases.
Investors, however, may just be overreacting. BMO Capital analyst Shannon Coyne wants us to remember that one, the deal is not set in stone and two, there is very little overlap between the brands that Ulta and Violet Grey carry. This, here, is important. While Ulta does carry some luxury beauty products, the company is more known for their mid-level, department store, and drugstore brands, like Benefit and Clinique. The potential Amazon-Violet Grey partnership would hurt Sephora more, which carries many of the same brands as Violet Grey does.
Coyne also points towards Ulta’s incredibly popular loyalty program, high-performing website, and mobile app, noting that these three divisions will likely “provide cover” should Amazon decide to enter the beauty market.
Rumors of Amazon becoming a viable beauty threat began in earnest about a month ago, and shares of Ulta have dropped about 14% since then. This is on top of all the other Amazon news, from scooping up Whole Foods Market to selling Nike (NKE - Free Report) product on its website. ULTA is currently a #2 (Buy) on the Zacks Rank, and is set to report its next quarterly earnings on August 24 after the bell.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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On Wednesday, shares of Ulta Beauty (ULTA - Free Report) are falling, down about 3.5% in midday trading after rumors are floating about that Amazon (AMZN - Free Report) is considering a partnership with high-end beauty e-commerce site Violet Grey.
Similar to Ulta and its key rival Sephora, Violet Grey is a multi-platform beauty business that is comprised of a website, a digital magazine, and brick-and-mortar store located on Melrose Place in Los Angeles. But what makes the company stand out is its focus on curation.
Founder Cassandra Huysentruyt Grey and her team have collaborated with top makeup artists and skincare experts to curate the “best of the best” when it comes to beauty products, as well as essential beauty tips, tricks, and inspiration. Grey is inspired by the glamour of Hollywood, and the brands on the company’s website reflect this: Tom Ford, Chanel, Dior, La Prairie, Charlotte Tillbury, among many others.
The beauty industry has long been considered the one retail area that is “Amazon-immune.” With many beauty products, especially makeup, customers still feel the need to go to a physical store to test those products out before they make any new purchases.
Investors, however, may just be overreacting. BMO Capital analyst Shannon Coyne wants us to remember that one, the deal is not set in stone and two, there is very little overlap between the brands that Ulta and Violet Grey carry. This, here, is important. While Ulta does carry some luxury beauty products, the company is more known for their mid-level, department store, and drugstore brands, like Benefit and Clinique. The potential Amazon-Violet Grey partnership would hurt Sephora more, which carries many of the same brands as Violet Grey does.
Coyne also points towards Ulta’s incredibly popular loyalty program, high-performing website, and mobile app, noting that these three divisions will likely “provide cover” should Amazon decide to enter the beauty market.
Rumors of Amazon becoming a viable beauty threat began in earnest about a month ago, and shares of Ulta have dropped about 14% since then. This is on top of all the other Amazon news, from scooping up Whole Foods Market to selling Nike (NKE - Free Report) product on its website. ULTA is currently a #2 (Buy) on the Zacks Rank, and is set to report its next quarterly earnings on August 24 after the bell.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaries," but that should still leave plenty of money for regular investors who make the right trades early.
Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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