In an attempt to enhance its financial flexibility amid the coronavirus outbreak, Ulta Beauty (NASDAQ:ULTA), Inc. ULTA has recently drawn down $800 million under its revolving credit facility. Including the revolver drawdown, the company’s cash in hand was nearly $1.3 billion as of Mar 18. Moreover, management is reassessing the pace and timing of its stock repurchase program.
Apart from these, the company is on track with reducing its capital expenditure and optimizing expenses due to the coronavirus crisis. Moreover, Ulta Beauty is mindfully adjusting its inventory levels along with leveraging its existing online platforms to drive sales amid its temporary store closures.
Prior to this, Ulta Beauty had announced temporary store closure plans due to the growing spread of COVID-19. The beauty retailer shut down all stores from 6:00 pm, Mar 19, 2020, till at least Mar 31. Nonetheless, it informed investors that most of its stores can be accessed for the buy online and pick up in store facility, as permitted by regulations. Also, shoppers can keep purchasing online via Ulta Beauty app or ulta.com. Apart from these, the company had withdrawn its recently provided guidance for fiscal 2020, given the current situation and its unpredictable impact on revenues and costs.
We note that shares of this Zacks Rank #3 (Hold) company have plunged 57.4% in the past year compared with the industry’s decline of 51.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Rising concerns related to the COVID-19 pandemic have derailed the economic activities globally. Companies are bearing the brunt of supply-chain bottlenecks due to travel restrictions imposed to contain further spread of the deadly virus. Certainly, this is a blow to the travel retail network, which plays a vital role in the sales of cosmetic and beauty players. Moreover, the outbreak has caused people in most cities to stay indoors, resulting in lower store traffic. The deadly virus has infected more than 300,000 people worldwide and the death toll has crossed 14,000.
We note that coronavirus-led worries also weighed on the guidance of cosmetic players like The Estee Lauder Companies Inc (NYSE:EL). EL and Nu Skin Enterprises, Inc. (NYSE:NUS) when they recently reported quarterly results. Moreover, Inter Parfums, Inc. (NASDAQ:IPAR) withdrew its recently provided guidance for 2020 amid the growing spread of COVID-19.
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