He also posited that Ulta’s business model - it is the only pure-play beauty retailer that sells prestige, mass and professional products with cross-category services, too - has been a clear competitive advantage in today’s landscape. Kimbell noted that while beauty is technically a discretionary item, it’s still lower on the list of categories that consumers are likely to cut back on. Ulta expects those factors to add up to continued growth, with the company raising its guidance from 3 to 4 percent comp-store growth for the year to 6 to 8 percent growth, even with looming economic uncertainty. “While pockets of retail have been volatile of late, we believe Ulta is one of the most competitively advantaged operators, with solid positioning in an in-demand category, growing store count/square footage and a loyal base of consumers.” Investment has been disciplined in our view, and we expect both price and volume to drive continued growth,” she wrote. “We expect Ulta to build on its dominance in the attractive, fast-growing beauty category. Raymond James analyst Olivia Tong was also upbeat. We’re hopeful his optimism is early and right.” “If we roll forward into fall and the seasonal event bubble bursts, inflation forces price increases and innovation isn’t exciting enough to the consumer, we’ll be seeing momentum backtracking. “Real inflation hasn’t come through the category yet, so demand elasticity considerations thus far are limited,” she continued. “The only risk is that this is a short cycle boom, linked to a return to socialization and events. “His excitement is well placed now that makeup has turned,” said Jefferies analyst Steph Wissink. Overall, analysts reacted positively to Kimbell’s message, their tone slightly more tempered but still bullish. “But I have a lot of confidence in beauty being resilient because of the importance it plays in people’s lives.” “So, as we look out into the uncertainty ahead of us, we’re prepared for it and managing toward it,” he said. But we’ve also seen that in times when consumers want to take care of themselves, beauty plays a role in that. “Even in this environment, people still want to go out and be around others and beauty is an important part of that. “But I also think that it can lead to continued engagement in the beauty category,” Kimbell continued. Lip Service: The Latest Skin Care-infused Lip Launches From Glow Recipe, Dr.
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