Ulta Beauty Inc ULTA was forced to pivot to an e-commerce only business model in March and followed up a few weeks later with a curbside pickup option. Consumers responded "tremendously well" to the initiatives, but now the company is ready to proceed with store reopenings, CEO Mary Dillon said on "Mad Money."
Pent-Up Demand
Ulta was forced to close all of its stores due to the COVID-19 pandemic in March, but management reacted with tremendous speed in focusing on how the e-commerce business can satisfy consumer demand for beauty products. The first 180 stores with a curbside pickup option experienced "similar" total sales volume on a year-over-year basis that signals pent-up demand for beauty products.
Today, 75% of stores are open for curbside pickup while around 50% of stores are fully open as part of a carefully planned and gradual reopening process, the CEO said. By the end of June, the company expects to have all stores open.
Is Beauty A Recession Proof Category?
Ulta Beauty's history dates back more than three decades and it's not "recession-proof," she said. However, the company is backed by a strong business model that focuses on "all things beauty all in one price from mass to prestige categories."
By selling a wide range of products at different price points, Ulta is able to "meet the guest where they are."
Zoom Generation
It's "too early to say" if the surge in demand for video conferencing has followed through with increasing demand for beauty products, Dillon said. The company has merely seen over the past few weeks a continuation in skincare and makeup demand.
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