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Ulta Beauty to Furlough Staff in its Fight Against Coronavirus

Zacks Equity Research

Ulta Beauty, Inc. ULTA is the latest company to tighten its control measures with increasing cases of coronavirus being reported each day. Notably, the novel coronavirus has been wreaking havoc worldwide by killing thousands of people and disrupting the global economy. In response, authorities have ordered shutdown of stores and manufacturing facilities as well as implemented social distancing, work from home options and travel bans.

Given the unprecedented impacts of this ongoing pandemic, Ulta Beauty has decided to temporarily furlough many of its store and salon associates, effective April 19. During this period, all furloughed associates who are a part of the company’s benefit plans will continue to be enrolled in various coverages. Also, these furloughed associates will be eligible to apply for unemployment benefits under the federal CARES Act.

Keeping along these lines, Ulta Beauty’s chief executive officer has stepped forward to forgo her base salary for an indefinite period. Further, the company’s CEO, board of directors and the executive team members are making personal donations in an attempt to fight coronavirus.



Similarly, retailers, including Macy’s M, L Brands LB and Kohl’s KSS have announced to put thousands of employees on leave amid the coronavirus outbreak. Macy’s is furloughing most of its 130,000 workers in the United States, per sources. Also, L Brands decided to furlough employees such as store associates and those who can’t work remotely to support the online business. Kohl’s is likely to grant leave to workers at its stores and store distribution centers.

In the latest press release, Ulta Beauty informed investors that it will be donate 450,000 medical grade gloves from its salons in an attempt to help the community of healthcare workers amid the crisis.

Meanwhile, Ulta Beauty had earlier stated that all stores will remain temporarily shut until it is safe to reopen them again. Nonetheless, shoppers can keep purchasing online via Ulta Beauty app or ulta.com. Also, it has been offering a $2-per-hour wage premium to associates who continue to work in distribution centers to support the e-commerce business amid coronavirus.

In the past, Ulta Beauty which withdrew its recently-provided guidance for fiscal 2020, also stated that it has been undertaking expense-control measures, suspending new recruits along with postponing merit increments for all corporate and store associates. Moreover, Ulta Beauty is reducing various investments and capital expendituresduring the coronavirus crisis. Apart from these factors, Ulta Beauty previously drew down $800 million under its revolving credit facility to increase its financial flexibility amid the coronavirus crsis.

We note that shares of this Zacks Rank #4 (Sell) company have plunged 42.7% in the past year compared with the industry’s decline of 45.5%.



You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
 
Macy's, Inc. (M) : Free Stock Analysis Report
 
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