ULTA - Embedded Expectations Analysis - 2019 01 28
Ulta Beauty, Inc. (ULTA:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 25.5x Uniform P/E. At these levels, the market has fairly optimistic expectations for the firm, but management has concerns aboute-commerce growth, pricing sustainability, operating margins, and inventory management
Specifically, management may have concerns about their ability to sustain sales per member figures, and maintain strong inventory performance going forward. Moreover, they may be concerned about their ability to improve inventory productivity and increase average unit selling price, and may have concerns about the frequency of clearance sales. Furthermore, management may have concerns about capex allocation, continued operating margin declines, and the sustainability of ecommerce growth, and may be concerned about their ability to expand top performing brands. Finally, management may be concerned about their ability to achieve e-commerce revenue guidance and may lack confidence in the strength of data in their personalization platform
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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