Ulta has decided to focus on U.S. growth and hold off on an expansion into Canada
Ulta Beauty Inc. [s: ulta] said in an 8-K filing that it will postpone its launch in Canada.
The beauty retailer said that investments so far have only been in “early-stage infrastructure” and leases on a small number of stores. It expects to incur costs in the range of $55 million to $65 million as a result, most of which will be recognized in 2020.
The company will continue to invest in U.S. growth, including new stores, digital and market share growth in certain categories.
Ulta ULTA, -3.09% also announced that it has repaid the outstanding borrowings from its revolving credit facility, totaling $800 million.
BMO Capital Markets supports both of these moves.
“No longer a ‘small’ company, we believe a shift in Ulta’s cash usage and growth strategy is appropriate and we commend its use of a ‘COVID-Cover’ to renew focus on healthy growth, rather than growth for growth’s sake ,” wrote analysts led by Simeon Siegel.
BMO rates Ulta stock market perform with a $241 price target.
Ulta stock has fallen 14.3% for the year to date while the S&P 500 index SPX, -2.37% has edged up 0.2% for the period.