11Mes·

$ULTA (+0,38%) - Ulta Beauty brief introduction

Why am I convinced of the company and invested ?

Market leader :

Ulta Beauty is the leading cosmetics retailer in America and plans to expand to the rest of the world.

This dominant position proves that their products not only work, but are also favored by their target audience.

Biggest competitor: Sephora - $MC (-0,72%)

(Further $AMZN (+0,54%) , $TGT (-0,74%) , $WMT (-0,16%) )

Product range:

Ulta Beauty is continuously expanding its product offering with exclusive and new brands that appeal to a diverse customer demographic and drive sales growth.

They will continue to do so in the Americas to increase sales in existing stores.

Growing rewards program:

Ulta has a growing rewards program called Ultamate Rewards that has millions of members and continues to grow rapidly.

This will continue and strengthen customer loyalty in the Ulta ecosystem.

Omnichannel strategy:

Ulta Beauty's strong omnichannel presence, combining e-commerce and physical stores, allows the company to meet the needs of its customers wherever they shop.

This increases overall sales and customer satisfaction as customers can visit Ulta online or in person.

International expansion:

Ulta can grow organically through volume and average price, but is also expanding internationally.

In 2025, they want to expand into Latin America and join forces with Grupo Axo. Grupo Axo is something like the "Target" (retailer and second largest discounter in the USA) of Latin America.

Innovation and technology:

Ulta is investing heavily in technology and innovation, from beauty apps with augmented reality (AR) to AI-driven personalized recommendations that improve the customer experience and operational efficiency.

This also enables consumers to shop online with AR beauty apps.

Shares - Buybacks:

Ulta will buy back shares en masse at these reduced prices. This will increase the value per share and all of the company's per share metrics.

They are set to buy back 5%+ of their market capitalization annually.

Growth potential:

The beauty/cosmetics industry continues to grow and Ulta Beauty

is well positioned to capitalize on this trend through strategic store expansions and improvements to its digital capabilities.

As the dominant player, Ulta stands to benefit the most from this growth.

Historically low P/E ratio:

Other key figures:

ROIC: 24.32% 5 years (return on invested capital)

Return on equity: 45.58 % 5 years

Gross margin: 42.74

Net margin: 12%

FCF margin: 8.09 % (free cash flow margin)

Sales growth 10 years: 14.96

FCF growth 10 years: 21.01 %

12 Commenti

Pope Donkey XXI@DonkeyInvestor

11Mes

Does $SOFI use their products?

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BamBamInvest@BamBamInvest

11Mes

@DonkeyInvestor How do you think I came across $ULTA? After $SOFI spent over 3 hours there, I had enough time to do some research in the meantime. Somehow only women went in, but hardly any came out 🤔

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BamBamInvest@BamBamInvest

11Mes

@DonkeyInvestor Incidentally, this is how I met @Gerit, his wife $SE was also at Ulta, waiting with me and so we got talking about $ULTA and decided to invest 🤭 Afterwards we went for a drink, which led me to $DGE and $RI.

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MrMister@MrMister

11Mes

Thank you for the detailed report. The entire beauty industry worldwide has a turnover of USD 500 billion. Rihana's products alone with Fenty Beauty and Huda already generate annual sales in the 3-digit millions. However, Ulta itself is not the global market leader, that is LVMH with Sephora. It will be extremely difficult for Ulta, as international license agreements and exclusive rights have already been concluded with Douglas and Sephora, for example, and its own portfolio is not sufficient. The Korean brands alone are all already taken. It's a very complex world. I would still invest, as beauty has extremely high margins.

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BamBamInvest@BamBamInvest

11Mes

@MrMister I'd like to, yes I've also looked at it, but the pie is big enough and I also find the South American region extremely exciting, I also benefit here from $ELF where I had already considered a direct investment. $MC I'm also invested and will probably increase it again soon. I am also fascinated by the fact that 95% of all sales are made via members (Ultamate Rewards), which generates a high level of customer loyalty and can be expanded, I don't believe that a company that is so firmly anchored in the USA can be built from scratch and at the current valuation, historically speaking, probably the ideal time to go long, maybe I'll add to it again in the next few days. ✌️

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BamBamInvest@BamBamInvest

11Mes

@MrMister Other companies in this sector are also valued higher and sometimes have lower growth rates, which also prompted me to invest. As a rule, well-managed and established cosmetics companies are never really cheap. (But possibly a little cheaper in a recession)

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stucky8@stucky8

11Mes

Sounds interesting, where is the big drop in the price coming from recently? Compared to L'Oréal, they are really cheap

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BamBamInvest@BamBamInvest

11Mes

@stucky8 Well, as with many other partly consumer-dependent companies, high interest rates, fear of recession and the associated fear of lower consumer spending and savings on cosmetics, mixed figures, etc.
However, I doubt that many women will do without hairdressers, cosmetics, etc. and I think this should recover relatively quickly. ✌️

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BamBamInvest@BamBamInvest

11Mes

@Gerit tell me, is the spread with you at $ULTA also that big or do you buy in $ / American exchanges ? I wanted to add something but I have 5 Euro spread on Flatex ?

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Gerit@Gerit

11Mes

@BamBamInvest Ulta is currently at 336€, have e at TR 341€ and at DKB 338€, yes the spread is high.

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Gerit@Gerit

11Mes

@BamBamInvest would very much like to buy, have been toying with the idea of completely liquidating my Canadian Pacific for this the whole time... had actually accumulated the cash for this... now waiting for my expenses, among other things, can hopefully buy in 1-2 weeks.

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BamBamInvest@BamBamInvest

11Mes

@Gerit It's still summer, so the spread is generally higher, but very tempting. Let's see when it's not quite so bad and maybe the price will also fall 👍

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