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 thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Ulta Beauty (
ULTA Quick Quote ULTA - Free Report) 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.
Ulta Beauty ended the first quarter of fiscal 2021 with 1,290 stores. For fiscal 2021, the company plans to open approximately 40 stores along with carrying out 19 store remodeling and relocation projects. Bottom Line
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.
According to our calculations, a $1000 investment made in August 2011 would be worth $7,222.84, or a 622.28% gain, as of August 19, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 285.77% and the price of gold increased -7.14% over the same time frame in comparison.
Analysts are anticipating more upside for ULTA.
Ulta Beauty has outpaced the industry in the past six months. The company has been benefiting from robust e-commerce trends, as well as strength in the skincare category. These upsides fueled first-quarter fiscal 2021 results, wherein the top and bottom lines grew year over year and crushed the Zacks Consensus Estimate. Moreover, management raised its fiscal view. Robust sales and cost-containment efforts drove the bottom line, while sales gained on government stimulus, better consumer confidence and relaxation of pandemic-related curbs. Also, the desire for newness has been an upside. Certainly, the company’s focus on its six key strategies is yielding results. That being said, high SG&A expenses remain a threat. Also, pandemic-led hurdles in the services business and uncertainty related to full makeup category recovery are concerning.
The stock has jumped 5.87% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 4 higher, for fiscal 2021; the consensus estimate has moved up as well.