Weakness may be opportunity in beauty stocks, like ULTA.
The stock came under pressure after Amazon.com said it plans to hold a beauty products event in October to boost its position in the category.
According to CNBC, Amazon has been trying to gain market shares in the $500 billion global beauty market. “The beauty market is of particular interest now, as consumers have flocked to the web to buy makeup and personal care items during the pandemic. Online makeup sales surged 40% in 2020 from a year earlier, while sales of “self-care” items like shampoo, face wash products and lotions climbed 59%, according to market research firm 1010data.”
However, don’t count out ULTA just yet.
The company has done a good job of protecting its customer base, and keeping its stock in a strong uptrend for the last two years. Helping, the company recently raised its full year outlook as beauty product demand races back.
In addition, according to CNBC:
“Ulta estimates sales this year will range between $8.1 billion and $8.3 billion. Previously, it expected $7.7 billion to $7.8 billion in sales. Same-store sales will rise 30% to 32%, it said, higher than its prior outlook of 23% to 25% growth. Earnings are forecast to be around $14.50 to $14.70 per share for the year, compared with a prior range of $11.50 to $11.95 per share.”
The Amazon-induced pullback may be a great opportunity to buy.
The post Weakness May be Opportunity in $500 Billion Beauty Market appeared first on Morningology.
