Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)

Profitability, expansion, even in a DEPRESSION women are going to spend money on looking good

MY WIFE LOVES THIS STORE

I like ULTA - it's part beauty supply, part salon - like a beauty WalMart but with better quality products. Their customers are loyal, despite the economic downturn ladies are continuing to spend on personal care products, and my hair stylist said that there are a bunch of products she can get at ULTA that are cheaper than she can buy them with her cost plus discounts at to the trade beauty supply companies. All in all a recipe for success.

ok, very nice quarterly report. nice earnings, it is time to GET THE GOODIES

If you've been in the mall, then you've seen the ladies carrying around the ULTA bags. I have read a lot on this company, and they have a great management team, market themselves well, and hey, let's face it. Even though the market is in a slump, ladies are going to ensure they look good no matter what. Keep an eye on this company as we press in to the Holidays and on past this market slump.

I went to the mall and watched every tween, teen, & mom stop by the store; the only bags in the mall were orange ULTA bags. Several "metro" male friends have been shopping here for years. I visited 2 other stores & saw steady streams of mini-vans full of moms & daughters stop in to shop. The business model (value name brand cosmetics & sundries with a salon) makes sense in this tight economy and CEO Kirby mentioned, the client is not trading down on quality - she is choosing to pay less for the same salon/department store cosmetic brands. A risk is growth too fast (average 18 stores per quarter), but they kept the pace last year. Inventory levels have been a question as well but Kirby has answered reasonably citing new distribution centers. Cost of goods has remained flat. Good focus on 2nd & 3rd tier cities for growth & good store locations are training the next generation of shoppers to visit specialty value retailers like ULTA.

ulta

I am watching this stock and thinking about buying. Here's why: Once a woman shops here she is always drawn back due to ULTA's great marketing scheme. On your first visit, they sign you up for an ULTA discount card and track all of your purchases. Every quarter, the customer is rewarded with something free. Lots of coupons and brochures are sent to the home. I personally have spent over $800 in the past year here buying everything from a straightening iron, hot curlers, high end make-up, hair care products and gifts for friends and family.

Anyway, when the economy is rough and you can't go out and buy a new outfit, the least you can do is buy a $5 eyeshadow and Ulta's brand shadows are some of the best on the market.

High end, low end and everything in between, Ulta has all beauty needs covered.

Ulat Salon is a 2007 IPO that has great potential. A poor third quarter report caused the stock to tumble and a subsequent class action has scared many investors away from this diamond in the rough. With eighteen years industry service and a projection of 2007 year end earnings of .47-.49 per share this stock will rebound and settle in the low 20's by mid year.

The Underdog, will hit off by end of Q1 08.