Ulta's 2022 results are a thing of beauty

Author

Stephen Babcock
March 10, 2023

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For retailers, having the right items onhand in the right place at the right time is crucial to profitability. The complexity of getting that equation right was underscored last year, when supply chain bottlenecks gave way to a glut of inventory that left many taking markdowns. Anaplan’s Bob Debicki walked The Current through the host of factors that retailers weigh when ordering goods months ahead, and the importance of a holistic view.

Walmart has added more affluent shoppers amid inflation as consumers seek ways to save money. This has helped to bolster Walmart+, the subscription service launched in 2020 that serves as the retailer’s answer to Amazon Prime. According to Prosper Insights and Analytics, 28% of US households making above $150,000 were members of Walmart+ in Feburary, up from 13% in 2021. – Bloomberg

Ulta was among the high flyers of 2022 as beauty showed strength. Consumers returned to in-person activities and reached for affordable luxuries amid inflation. Ulta now has 40 million loyalty members, and is adding more capabilities to fulfill orders in store. In 2023, it will look to grow its recently-launched retail media network.

The job market is a key indicator of consumer demand, and it remains strong. In February, job growth was robust and unemployment stayed historically low. While that's good news on the face for brands and retailers, it will likely cause the Federal Reserve to consider stepping back up interest rate increases that are designed to slow demand.

Following months of backups, it’s now smooth sailing into U.S. ports. Import volumes are at the lowest since the beginning of the pandemic, according to NRF’s Global Port Tracker. Meanwhile, the price of shipping containers is down 80% from the same week last year, per Drewry.

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