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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Ulta Beauty (ULTA) 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.
As of May 26, 2022, Ulta Beauty operated 1,318 stores. In fiscal 2022, the company plans to open 50 net new stores along with carrying out 35 store remodeling and relocation projects.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Ulta Beauty a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in June 2012 would be worth $4,130.11, or a 313.01% gain, as of June 20, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 173.66% and the price of gold went up 9.81% over the same time frame.
Analysts are anticipating more upside for ULTA.
Shares of Ulta Beauty have outpaced the industry in the past three months. The company has been benefiting from its omnichannel strength. Also, the skincare category has been gaining from consumers’ rising interest in self-care. These upsides aided first-quarter fiscal 2022 results, wherein the top and bottom lines grew year over year and beat the Zacks Consensus Estimate. Results were backed by the strong execution of the company’s strategies and solid guest demand, with the latter gaining from the company’s exciting brand launches. Also, increased in-person activities and travel have been leading to the revival of the beauty category demand. All major categories delivered double-digit comp sales growth. Encouragingly, management raised its fiscal 2022 view. However, it expects SG&A deleverage and a decline in the gross margin.
The stock is up 15.39% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 14 higher, for fiscal 2022. The consensus estimate has moved up as well.
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