Shares of Ulta Beauty (NASDAQ:ULTA) were down sharply on Thursday morning, as concerns about the COVID-19 pandemic's effect on businesses drove a broad-based market sell-off.
As of 10:30 a.m. EDT, Ulta Beauty's shares were down about 10% from Wednesday's closing price.
Like just nearly every other business with a major brick-and-mortar retail presence, Ulta is facing concerns about retail foot traffic amid measures to combat the spread of the novel coronavirus. Public-health experts are recommending the widespread implementation "social distancing" measures -- or put another way, telling everyone to stay home.
Obviously, that would be a difficult situation for Ulta. Not only is the company dependent on retail foot traffic, but it's also dependent on customers buying skin-care and beauty products, whether in stores or online. But will Ulta's regular customers be buying as much makeup if they're working from home for an extended period or avoiding socializing? The answer suggests near-term trouble for Ulta's sales.
In a statement on Wednesday, CEO Mary Dillon sought to reassure customers, saying that the company has stepped up sanitization measures in all of its locations and will put restrictions around product testers to protect customers from virus transmission.
Dillon hit all the right notes, but will it help? Right now, investors appear skeptical.