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Ulta Beauty Inc ULTA Stock Quote

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Morningstar‘s Stock Analysis ULTA

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Is it the right time to buy or sell?
Is it the right time to buy or sell?

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Narrow-Moat Ulta’s Q3 Earnings Report Shows No Blemishes; Shares Expensive

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Continuing its hot streak, narrow-moat Ulta Beauty soared past our sales and profit expectations in 2022’s third quarter. Moreover, despite concerns that consumer spending is slowing as a result of inflation, the company reports that the holiday season is off to a good start, and it sees no evidence of trading down to less expensive products. Indeed, it guided to 6%-8% same-store sales growth in the fourth quarter, above our 3% estimate. Thus, we expect to lift our $339 fair value estimate by a mid-single-digit percentage. However, although we view Ulta as a very strong retailer and forecast rising earnings through this decade, we view its shares, trading near all-time highs, as overvalued.

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Key Statistics ULTA

Company Profile ULTA

Business Description

With more than 1,300 stores and a partnership with Target, Ulta Beauty is the largest specialized beauty retailer in the U.S. The firm offers makeup (43% of 2021 sales), fragrances, skin care, and hair care products (20% of 2021 sales), and bath and body items. Ulta offers private-label products and merchandise from more than 500 vendors. It also offers salon services, including hair, makeup, skin, and brow services, in all stores. Most Ulta stores are approximately 10,000 square feet and are in suburban strip centers. Ulta was founded in 1990 and is based in Bolingbrook, Illinois.

1000 Remington Boulevard, Suite 120
Bolingbrook, IL, 60440
T +1 630 410-4800
Industry Specialty Retail
Most Recent Earnings Oct 31, 2022
Fiscal Year End Jan 28, 2023
Employees 40,500