Ulta Beauty: A Steady Ship For Unsteady Times

Gary Alexander
31.33K Followers

Summary

  • Ulta Beauty's share price has dropped ~15% YTD, presenting a buying opportunity amid market panic and long-term growth potential.
  • Despite macroeconomic headwinds and tariff concerns, Ulta's low import exposure and strong comparable sales growth make it a resilient investment.
  • Ulta's expanding customer base, including men's fragrances and Gen Z, and strategic investments in omnichannel marketing, are driving healthy growth prospects. The company is adding 60 net-new stores in FY25.
  • Trading at a <16x P/E, Ulta's valuation compensates well for macro risks and potential margin degradation in FY25 as the company invests more heavily into stores and its digital experience.
Choosing the perfect scent

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Within the space of just a few days, the stock market has nearly unraveled all of 2024's gains, driven by the fear that Trump's fresh tariff plan will set the U.S. on a faster collision course to a recession. Amid this backdrop, however, investors who have

This article was written by

31.33K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ULTA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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