Stocks on Our Radar: Ulta Salon, Cosmetics, & Fragrance

In the latest installment of our new "Stocks on Our Radar" series, analyst Sara Hov looks at cosmetics retailer Ulta.

Jun 16, 2014 at 4:44PM

Big-box retailer Ulta Salon, Cosmetics, & Fragrance (NASDAQ:ULTA) delivered a great quarter, proving CEO Mary Dillon's mettle and affirming management's five-year plan to scale Ulta's business on a solid foundation, but can it keep up those results going forward?

The company accomplished its goal of getting all customers on track in one loyalty rewards program, and while doing so increased expenses for the quarter, it should pay off in larger basket sizes and more frequent transactions going forward for the more than 13 million Ultamate rewards members. 

Ulta also added more than 20 new stores and is on track to build 100 net new stores this year. With fewer than 700 total stores and management's goal of 1,200, Ulta clearly still has room to run. Online sales increased by more than 70% this quarter, which is good for several reasons, not least that online sales are higher margin, it's easier to increase basket sizes with online coupons and free shipping minimums, and customers who shop in stores and online are likely to spend more at Ulta overall. 

Stock Advisor analyst Sara Hov talks about what's ahead for Ulta, including how it will hold up against the tough competition.


Sara Hov has no position in any stocks mentioned. The Motley Fool recommends Ulta Salon, Cosmetics, & Fragrance. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers