It was good news, of a sort, for beauty retailer Ulta Beauty (ULTA) today as a “queenpin” who was behind an “organized retail crime ring” will now be required to pay restitution, noted a CNBC report. The news was cold comfort to investors, though, as shares were down over 1.5% in Wednesday afternoon’s trading.
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The report noted that Michelle Mack, a mom from California, pleaded guilty to running what the report called an “organized retail crime ring” that pulled in several million dollars’ worth of luxury goods from retailers that were subsequently sold online. Now, Mack is under an order to pay $3 million in restitution to several retailers, including Ulta, as part of a plea bargaining agreement.
While Ulta was the primary target of Mack’s crime ring, there were several others involved, including cosmetics chain Sephora. There is no word as yet as to just how much of that $3 million will be going to Ulta Beauty. Further, when asked, Ulta Beauty also would not say how it would account for that restitution windfall, or what it would do with it when it did finally arrive.
Stepping Up Customer Service
Meanwhile, for paying customers, Ulta Beauty has a new angle, thanks to a report from Loyalty360. It is working with Instacart (CART) to provide same-day service, a point we first heard about a couple weeks ago. What we did not hear about in the earlier reports, though, is that Instacart will be adding Ulta Beauty Rewards functionality to the app itself, which allows customers to get access to loyalty program points as a result of their purchases through Instacart.
Further, those buying $50 or more worth of items through January 26 will be able to get $10 off their order, which offers further inducement to shop. With the beauty market making something of a comeback, offering up such a deal may be being at the right place at the right time.
Is Ulta Beauty Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ULTA stock based on 11 Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 13.52% loss in its share price over the past year, the average ULTA price target of $463.83 per share implies 12.05% upside potential.
