ULTA - Embedded Expectations Analysis - 2018 08 21
ULTA Beauty (ULTA:USA) currently trades near historical averages relative toUAFRS-based (Uniform) Earnings, with a 22.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management has concerns about their new Bumble and Bumble product line, performance of older legacy facilities, and their ability to sustain elevated guidance
Specifically, management may lack confidence in their Bumble and Bumble product introduction, and in their ability to maintain their elevated mix of sales from prestige brand boutiques. Also, they may lack confidence in their ability to sustain increased sales guidance, and expanded diluted EPS levels as their effective tax rate stabilizes. Furthermore, they may lack confidence in the progression of their supply chain, and in the performance of their older legacy facilities. Additionally, they may be overstating their confidence in their vendor-retailer partnerships and improved in-store experience
Ulta Beauty is a beauty retailer that provides cosmetics, fragrance, skin care products, hair care products, and salon services. The company's stores are primarily located in locations such as power centers. The company provides a range of services in all of its stores. The company's stores, website, and mobile applications provides more than 25,000 products from approximately 500 beauty brands across all categories and price points, including its own private label, the Ulta Beauty Collection. The company provides a portfolio across five primary categories: cosmetics; skincare, bath and fragrance; haircare products and styling tools; salon services; and other, which includes nail products and accessories.
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