What happened with ULTA today?
No read yet
Uses news and trading volume to explain the day’s move and how it relates to the market.
Stop guessing. Get the call, a three-month target price, the best and worst cases, and a source for every claim.
Ulta Beauty brings beauty brands at different price points into one retail setting, allowing shoppers to buy everyday and prestige cosmetics, fragrance, skin care and hair care together. Customers pay for products in its stores, on Ulta.com and through its mobile apps; nearly every store also has a full-service salon. The United States generates most of its sales.
Members of Ulta Beauty Rewards account for nearly all U.S. sales. They earn points on purchases and redeem them for products or services, while Ulta uses membership data to personalize recommendations and promotions. The business depends on stocking products shoppers want as beauty trends change. A small group of major brand partners, including L’Oréal and Estée Lauder Companies, supplies products that account for a large share of U.S. sales, and Ulta has no long-term supply agreements with these partners. Product and advertising rules also constrain what it can sell and how it can promote it.
Outside the United States, Ulta owns Space NK, a luxury beauty retailer in the U.K. and Ireland. It also receives royalties from Ulta Beauty-branded stores operated through its Mexican joint venture with Grupo Axo and its Middle East franchise with Alshaya Group. These international businesses remain a small part of the company.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Ulta’s results hinge on U.S. beauty spending and major brand partners such as L’Oréal and Estée Lauder Companies, part of a top-ten supplier group accounting for 51% of Ulta U.S. sales.
Sally Beauty and Ulta compete for consumers’ spending on hair care, styling tools and other beauty products, though Sally focuses more on professional hair products and also serves salon professionals. Sally’s hair color and care sales offer a window into demand in a category Ulta also sells.
Bath & Body Works competes with Ulta for shoppers’ fragrance, body-care and bath-product purchases through specialty stores and digital channels. Its sales of fragrance mists, body creams and body washes offer a read on spending in categories that matter to Ulta.
Target competes with Ulta for consumers’ cosmetics, skin-care and hair-care purchases, regardless of their agreement to run Ulta shops inside Target stores. That beauty rivalry is separate from the planned expiry of their shop-in-shop agreement.
Initial Jobless Claims (Oct/17)
Weekly jobless claims count new applications for unemployment benefits; for Ulta Beauty, a labor market that is holding up can keep hiring competitive and wages costly for its stores, salons and distribution centers.
Expected200.0KLast release199.0K
If it comes in above expectations
If the reading is above the 200.0K estimate, it is above the previous 199.0K. More claims signal a weakening labor market, which may ease Ulta Beauty’s competition for store, salon and distribution staff and wage pressure, lowering staffing costs against sales.
If it comes in below expectations
Fewer claims signal a labor market holding up, which may intensify Ulta Beauty’s competition to hire qualified staff and wage pressure, raising costs of running its stores, salons and distribution centers.
JOLTs Job Openings (Sep)
Job openings track how many positions employers are trying to fill; for Ulta Beauty, strong hiring demand can raise store, salon and distribution staffing costs, squeezing what it earns on product and service sales.
Expected7.0MLast release7.079M
If it comes in above expectations
More openings point to a tighter labor market, which could make it harder for Ulta Beauty to staff stores, salons and distribution centers and push up wages, leaving less from sales after payroll.
If it comes in below expectations
If the reading is below the 7.0M estimate, it is below the previous 7.079M. Fewer openings point to a looser labor market, which could ease Ulta Beauty’s hiring difficulties and wage pressure and reduce staffing costs against product and salon-service sales.
Non Farm Payrolls (Oct)
The monthly jobs report counts jobs added across the economy; strong hiring demand can raise wages and staffing costs for Ulta Beauty’s stores, salons and distribution centers, reducing what it keeps from merchandise and service sales.
If payrolls grow strongly, tighter hiring demand may raise Ulta Beauty’s staffing difficulty and wage costs; if growth weakens, hiring and wage pressure may ease for its stores, salons and distribution centers.
Sally Beauty Holdings, Inc. earningsSBH
Sally Beauty’s report will show demand for hair color and care among consumers and salon professionals, categories Ulta Beauty also sells.
Look for whether Sally Beauty’s hair color and care sales hold up, bearing in mind that it serves both consumers and salon professionals. Stronger sales would suggest demand for categories Ulta Beauty also sells is holding up; weaker sales would signal possible pressure on that part of Ulta’s merchandise, not prove Ulta’s own shoppers are buying less.
Retail Sales MoM (Oct)
Retail sales track how much consumers spend at retailers; stronger spending can support purchases of Ulta Beauty’s prestige and mass beauty products and salon services, lifting merchandise and service revenue.
If retail sales rise, stronger consumer spending may support Ulta Beauty’s merchandise purchases and salon-service revenue; if they fall, weaker spending may weigh on demand for both.
Target Corporation earningsTGT
Target’s report will show how shoppers are spending on cosmetics, skin care and hair care—the categories where it competes with Ulta Beauty.
Look for sales trends in Target’s cosmetics, skin-care and hair-care categories; if it does not break them out, treat overall sales only as a broad clue about spending. Strength in the overlapping categories would suggest shoppers are still spending there, supporting demand in parts of Ulta Beauty’s assortment; weakness would signal possible pressure on that shared demand, not establish Ulta’s own sales.
Bath & Body Works, Inc. earningsBBWI
Bath & Body Works’ report will show shoppers’ spending on fragrance and body care, categories Ulta Beauty also sells.
Look at sales trends for Bath & Body Works’ fragrance mists, body creams and body washes. Stronger sales would suggest shoppers are still spending on fragrance and body care, supporting demand in Ulta Beauty’s overlapping categories; weaker sales would signal possible softness in that shared demand, while differences in products and shoppers mean the read is not one-for-one.
Ulta Beauty, Inc. earningsThis company
Ulta Beauty earns from beauty products sold in stores and online, plus salon services; its report will show whether guest spending is growing without squeezing merchandise profit.
Read comparable sales—sales at stores open long enough to compare with the year-earlier period—alongside transactions and average ticket, the average amount spent per purchase. Then check gross margin, the share of sales left after merchandise costs. Sales growth with more transactions or higher spending and a steady or rising margin says guests are buying and merchandise is still contributing; slowing sales with a falling margin says demand or product economics are under pressure.
