Topic: How To Invest

Q: Pat, what do you think about Ulta Beauty’s prospects, both during the pandemic and beyond. Thank you.

Article Excerpt

A: Ulta Beauty, Inc., $203.81, symbol ULTA on Nasdaq (Shares outstanding: 56.3 million; Market cap: $11.3 billion; www.ulta.com), operates specialty retail stores selling cosmetics, fragrance, hair-care, and skincare products, and related accessories and services. All together, it offers a broad assortment of over 25,000 prestige and mass-market beauty products. The company has 1,254 stores in 50 states, primarily high-end street locations with an average store size of more than 10,000 square feet. Each location, generally, includes a 950 square-feet, full-service salon, through which the company sells beauty services. Apart from its stores, Ulta Beauty also sells extensively through its website. In 2019, cosmetics sales accounted for 50% of total revenue. Skincare, bath, and fragrances accounted for 22%, while haircare products contributed 19%, services, 5%, and other, 4%. Before COVID-19 disrupted business, Ulta Beauty was steadily increasing its market share and profits. The company had differentiated itself in a crowded marketplace with an assortment of brands across multiple categories and price points. Those labels include…

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