Ulta's warning was 'a little surprising': Analyst
04/04/2024 03:39
Shares of Ulta Beauty (ULTA) plunged after its CEO warned that demand for beauty products may be cooling. Loop Capital Markets Managing Director Anthony Chukumba says he was "a little surprised" by the announcement because the company just reported its fourth-quarter results on March 14. Chukumba also notes that the first quarter tends to be a tough one for Ulta, given the difficult comparisons to prior years' first quarter performance. As to whether or not this is part of a larger consumer trend, Chukumba says it is still "too early to tell if this is just a little bit of an air pocket in terms of demand or if this is, kind of, the canary in the coal mine." He also dismisses the notion that beauty products are a discretionary item for all shoppers, explaining how, for many Ulta customers, there is an entire routine in their day built around several products. Chukumba notes that Ulta has a number of competitive advantages, including its product mix, less intimidating stores, and a strong customer loyalty program. Watch the video above to hear whether or not Chukumba thinks it's time to buy Ulta. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. Editor's note: This article was written by Stephanie Mikulich.
Shares of Ulta Beauty (ULTA) plunged after its CEO warned that demand for beauty products may be cooling. Loop Capital Markets Managing Director Anthony Chukumba says he was "a little surprised" by the announcement because the company just reported its fourth-quarter results on March 14. Chukumba also notes that the first quarter tends to be a tough one for Ulta, given the difficult comparisons to prior years' first quarter performance.
As to whether or not this is part of a larger consumer trend, Chukumba says it is still "too early to tell if this is just a little bit of an air pocket in terms of demand or if this is, kind of, the canary in the coal mine." He also dismisses the notion that beauty products are a discretionary item for all shoppers, explaining how, for many Ulta customers, there is an entire routine in their day built around several products.
Chukumba notes that Ulta has a number of competitive advantages, including its product mix, less intimidating stores, and a strong customer loyalty program.
Watch the video above to hear whether or not Chukumba thinks it's time to buy Ulta.
For more expert insight and the latest market action, click here to watch this full episode of Market Domination.
Editor's note: This article was written by Stephanie Mikulich.