Editor's note: Seeking Alpha is proud to welcome Riyado Sofian as a new contributor. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to SA PREMIUM. Click here to find out more »
Ulta Beauty (NASDAQ:ULTA), the largest beauty retailer in the United States, took a major blow as the pandemic forced the company to close all of its 1,200+ stores on March 19. As a result, Ulta's comparable store sales plummeted by 62% from March 19 to the end of Q2. Although Ulta made curbside pickup available and its e-commerce sales more than doubled, it was not enough to offset the sales lost through store closures and social distancing measures.
On the bright side, Ulta has begun to take a staggered approach in reopening its stores and the company has shown signs of recovery. However, near-term headwind is still expected as some stores remain closed and social distancing measures limit customer visits. Nonetheless, Ulta is well-positioned for a smooth recovery with the help of U.L.T.A., an acronym I came up with to remind myself and readers as to why Ulta makes a great investment.
U Is for Ultamate Rewards Loyalty Program
Ulta's position as a specialty retailer attracts millions of beauty enthusiasts as the company offers more than 500 brands in its product portfolio, making assortment as one of Ulta's core differentiating strategy. Not to mention, Ulta also offers salon services in stores. Ulta's diversified product and services offering makes the company a one-stop-shop for all beauty things, giving shoppers an incentive to visit Ulta stores as opposed to visiting multiple stores, saving time in the process. Furthermore, customers can get their merchandise through a variety of options which include its 1,200+ stores nationwide, website, mobile app, buy online pickup in-store (BOPIS), and curbside pickup, making shoppers' experience all the more convenient.
