claimed fiscal next-quarter success on Wednesday, and when that hasn’t completed a lot to support the inventory, it could be excellent news for its new cosmetics lover, Ulta Elegance.
Target (ticker: TGT) and
(ULTA) declared their partnership in November 2020. It is a store-inside-a-store model that office shops have adopted with beauty brands in the earlier, and properly-trodden ground for Focus on, as it’s paired with other specialty brand names like
Levi Strauss & Co.
(LEVI). The initial Ulta retailers in Focus on are rolling out this thirty day period, with the corporations aiming for additional than 100 areas to open up by the conclusion of the year.
In that sense, what is excellent for Focus on is very good for Ulta. And though buyers may not have been thrilled with Target’s outcomes, there had been promising tendencies in the quarter that bode very well for Ulta.
Site visitors to Goal was higher in the quarter—and more foot targeted visitors will give much more people a likelihood to explore the new Ulta shops—while normal spending was up on a two-calendar year foundation. Goal also expects identical-store gross sales, which squeaked previous estimates this quarter, to proceed to rise forward of anticipations.
Even with the substantial leaps in on the net profits in the 12 months-ago period of time, because of to the Covid-19 pandemic, Target nonetheless managed to notch a 10% obtain in electronic profits. Ulta items will be obtainable to obtain on Target’s site, and some clients may perhaps be enticed to buy offered no cost shipping and delivery thresholds.
Loop Money Markets’ Anthony Chukumba raised his price target on Ulta to $360 from $340 on Wednesday, while also boosting his estimates for the enterprise, following traveling to one particular of the new Goal places in Illinois.
“We were being amazed by the prominent location, distinctive shows and signage and the broad assortment of prestige elegance solutions,” he writes. “In addition, we feel the shop-in-stores will introduce new prospects to the Ulta Magnificence manufacturer and push greater Ultamate Rewards shopper loyalty system associates even though steering clear of significant cannibalization of no cost standing merchants.”
Chukumba reiterated a Hold ranking on Ulta, citing the stock’s valuation and a resurgence of Covid that could dampen need for cosmetics. Nevertheless all round he’s satisfied about the partnership, and Target’s capacity to get market place share and appeal to consumers is one more bullish indicator for the pairing.
Create to Teresa Rivas at [email protected]