Ulta: "Increasingly Competitive"

Ulta Beauty’s October 2024 Investor Day

As discussed in “Ulta: Still A Beauty?”, I walked away from my initial analysis of the U.S. specialty beauty retailer with an appreciation for the impressive results that they had generated over the past 30+ years, but also with some questions about the opportunities ahead. As we approached the company’s Investor Day, which was held yesterday (on October 16th), there were three particular topics that I hoped management would focus on: (1) competitive dynamics, specifically recent market share losses in the face of improved results at Sephora; (2) long-term domestic unit growth targets, which had gone unchanged for many years and which had meaningful implications for future capital allocation decisions; and (3) the potential importance of international growth for Ulta as we looked out 3-5 years.

Thankfully, the October 2024 Investor Day provided some useful information on each of those topics, which I believe are critical to framing the long-term Ulta thesis. In today’s write-up, I’d like to take a closer look at each of them.

Competitive Dynamics