![]() ULTA Investor Presentation Ulta’s Q2 2022 confirmed the business’ resilienceįor the latest quarter Ulta Beauty posted 16.8% revenue growth to $2.3 billion, very strong growth due to a somewhat easy comparison with last year, when there were still restrictions on the general population and consumers were not experiencing that many events in person. By having such a large group of buyers that joined the reward program the company can gather very useful data on consumer’s behaviour and generate competitive advantage thanks to it. The growth of this customer cohort is vital for the growth of the business as about 95% of Ulta Beauty sales are actually generated by Ultamate Rewards members. Ulta’s loyalty program is adopted by an increasing number of consumers, reaching 38.2 million active members in the latest quarter (10% growth YoY). The reason why is that about 50% of these customers tend to also purchase retail products on the day of the service, and they also visit at least 5 additional times an Ulta Beauty store per year.Īnother avenue to increase customer’s spending is the Ultamate Rewards Program. Service customers generate 3x higher annual spending compared to non-service buyers. One of the unique propositions for Ulta has always been offering salon services at its locations (professional makeup, eyebrows and wax, skin care, etc.). Moreover, Ulta Beauty opened over 100 “shop-in-shops” inside Target locations in 2021 to further capture new audiences. First and foremost, ULTA has really embraced the omnichannel experience: customers interested in purchasing beauty products can visit one of the company’s brick-and-mortar shops or place an order online (e-commerce sales grew by 35% CAGR from 2017 to 2021). Over the years the company has put in place very successful strategies in order to increase its brand reach, boost customer’s loyalty and enhance its offering. Ulta is a retailer with over 1,200 stores specialized in the sales of beauty products (skin and hair care, fragrances, cosmetics) of all price ranges, from the entry level segment to the premium one. I believe that there are very good reasons for Ulta Beauty’s overperformance compared to the market and at the current valuation still represents a potentially great entry point. ![]() Today the stock is in the enviable position to be basically flat YTD, in a year when the S&P 500 ( SPY ) is down over 25% and the Nasdaq 100 ( QQQ ) is down over 35%. Since then, I argue that the company is even in a better shape, having navigated more than successfully the terribly confusing COVID restrictions. At the time the stock was enjoying years of overperformance thanks to steady growth and a resilient business model. ( NASDAQ: ULTA) shares when the stock made its first appearance on my personal radar in early 2019. One of my biggest regrets has always been not pulling the trigger on acquiring some Ulta Beauty, Inc.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |