I don’t know, the CEO didn’t seem that confident in the latest earnings CC. I feel they make have ridden some fads recently (those upstart brands, that failed to deliver) or perhaps they are the fad. I don’t understand the moat with their business (no surprise as a middle aged male).
Ulta Beauty’s success is rooted in a single consumer insight that the founders uncovered. Like all great insights, it is simple but meaningful: Most consumers shop for and buy beauty products across price points, across categories, and across brands. They are looking to curate their own collection. But the beauty industry has always been—and largely remains—set up to separate products by price and category
What we find is that this engagement isn’t about demographics. Rather, there is a segment of consumers that sees beauty as a joy: it’s fun, it’s a passion, it’s an escape. By tailoring our experience in a way that helps this behavior come to life, we’ve been able to have success.
Quote from: Spekulatius on August 30, 2019, 03:30:02 PMI don’t know, the CEO didn’t seem that confident in the latest earnings CC. I feel they make have ridden some fads recently (those upstart brands, that failed to deliver) or perhaps they are the fad. I don’t understand the moat with their business (no surprise as a middle aged male).With retailers, I find moats to be a bit mushy. But there are clearly retailers who exhibit moat-like qualities. One surprising thing about Ulta is that it has more active rewards members than Starbucks. If you look at their growth this quarter and the negative growth at the brands, it is pretty clear that Ulta is still taking market share.But anyway, I think this is a good starting point:QuoteUlta Beauty’s success is rooted in a single consumer insight that the founders uncovered. Like all great insights, it is simple but meaningful: Most consumers shop for and buy beauty products across price points, across categories, and across brands. They are looking to curate their own collection. But the beauty industry has always been—and largely remains—set up to separate products by price and categoryQuoteWhat we find is that this engagement isn’t about demographics. Rather, there is a segment of consumers that sees beauty as a joy: it’s fun, it’s a passion, it’s an escape. By tailoring our experience in a way that helps this behavior come to life, we’ve been able to have success.Source: https://insight.kellogg.northwestern.edu/article/the-secret-to-ulta-beautys-success-joy/amp
In North America, if I understand your question it’s about the different channels for luxury. What’s happening to us is the same that what’s happening to the market in general. Department stores are pretty tough. And specialty retailers like Sephora and Ulta are growing very well. And so we are – with this retailers we are a very important partner of Ulta, a very important partner too of Sephora.
So when the makeup market is strongly growing, really it’s a tailwind. When the makeup market is more difficult, like it is today after these four or five years of boom of the makeup, it’s more a headwind.
Another thought is that the increasing self awareness regarding looks related to Instagram and other social media platforms in particular is helping ULTA or similar companies.
Quote from: Spekulatius on August 31, 2019, 05:09:35 AMAnother thought is that the increasing self awareness regarding looks related to Instagram and other social media platforms in particular is helping ULTA or similar companies.This is actually the trend that is working against makeup industry right now. There was a very strong 4 or 5 year makeup-heavy cycle driven by social media. But the trend now seems to be towards more natural makeup (e.g. VSCO girls).
Well, I don't use makeup, so it's definitely a secular trend.
