Ulta Beauty Inc (NASDAQ: UTLA) is well-positioned to withstand inflationary pressures in the coming months, said CEO Dave Kimbell this morning on CNBC’s “Squawk Box”.
Beauty is resilient to inflation
Beauty as a category tends to adapt well and hold its own in times of inflation. CEO Kimbell, therefore, doesn’t think of Ulta Beauty products as purely discretionary. He said:
We look back over time and find beauty resilient because of the importance it plays in consumers’ live. So, we don’t think of it purely as a discretionary item. It’s so important to how people, particularly beauty enthusiasts live their lives.
Last month, Ulta Beauty cited strong demand as it reported market-beating results for its fiscal Q1. The Bolingbrook-headquartered company also raised its guidance for the full year. Wall Street, on average, sees an 8.0% upside in the stock.
Ulta Beauty can weather a trade down
CEO Kimbell is also confident that Ulta Beauty can weather inflation because it has products that tap on different price points and cater to all consumers, regardless of their purchasing power.
We’re unique in this all price points. If there’s a disruption or a trade down, we can deliver that within the Ulta Beauty experience. We’re the only ones that can do that. And our margins are healthy across the portfolio.
The Nasdaq-listed company partnered with Target in 2021 to introduce more customers to Ulta Beauty. The stock has recovered roughly 25% since Q1 report and is now in the green for the year.
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Source: https://invezz.com/news/2022/06/08/ulta-beauty-ceo-we-can-withstand-the-inflationary-pressures-ahead/