Please ensure Javascript is enabled for purposes of website accessibility

Why Ulta Beauty Stock Rose 15% in February

By Demitri Kalogeropoulos - Mar 4, 2021 at 9:46AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are betting on a growth rebound in 2021.

What happened

Ulta Beauty (ULTA 10.19%) stock outperformed a rising market last month. Shares jumped 15% in February compared to a 2.6% gain in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally helped push the makeup retailer just ahead of the market, leaving it up roughly 30% in the past full year.

A young woman applying eye makeup.

Image source: Getty Images.

So what

Investors had some reasons to boost their optimism for Ulta's business last month. Industry peer e.l.f Beauty, for example, reported strong sales growth thanks to improving demand for its cosmetics. The bigger factor was a promising vaccine rollout, though, and declining COVID-19 case counts that suggested an approaching return to more normal shopping trends.

Now what

Ulta Beauty will detail those updated trends when it reports fourth-quarter earnings results on March 11. Executives back in December warned that sales might fall by as much as 14% during the holiday period due to gathering outbreaks and increased social-distancing efforts.

Ulta might outperform that conservative target in a few days. But investors will be just as interested in learning whether the retailer is expecting a quick return to growth in 2021 even as parts of the makeup industry stay pressured by social distancing.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ulta Beauty, Inc. Stock Quote
Ulta Beauty, Inc.
$416.47 (10.19%) $38.51

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.