Analyst explains what gives Ulta Beauty an edge over rivals

Shares of Ulta Beaty (ULTA) fell 15% on Wednesday after the company warned that demand appeared to be cooling. Loop Capital Markets Managing Director Anthony Chukumba told Yahoo Finance the announcement was “a little surprising” given that the beauty retailer released earnings just three weeks ago.

Chukumba recently downgraded Ulta’s shares to Hold, given the stock’s valuation. However, there are things that give the beauty retailer a leg up over rivals. Chukumba notes that Ulta carries both prestige and drugstore brands, giving it a diverse product mix. He also notes that some stores have spas and that, generally, their stores tend to be less intimidating than others. The most important advantage Ulta has is its loyalty program, Chukumba says, arguing it has “the most compelling” program.

Watch the video above to hear Chukumba explain why, for some customers, cosmetics are not a discretionary purchase.

Be sure to watch the full interview with Anthony Chukumba. 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.

Previous post Massachusetts Gov. Healey introduces freeze on some state hiring amid budget concerns
Next post Recipient of world’s first pig kidney transplant discharged from Boston hospital