OLPX - Ulta Beauty tops Piper Sandler teen spending survey

2023-04-04 11:52:39 ET

In a survey of teen spending and interest in specific sectors performed by Piper Sandler, Ulta Beauty ( NASDAQ: ULTA ) stood out as a top performer.

According to equity analyst Korinne Wolfmeyer, beauty spending among teens remains on the rise, with specialty retailers like Ulta Beauty ( ULTA ) and Sally Beauty Holdings ( SBH ) raking in the bulk of spending. Per the survey, Ulta also remained the top preferred beauty destination for female teens with 41% mindshare. While LVMH’s ( OTCPK:LVMHF ) Sephora brand gained 800 basis points as compared to the prior year survey, it was unable to unseat Ulta.

“Ulta continues to hold the top beauty loyalty program membership at 63% of surveyed female teens with a loyalty membership, while Sephora ranked below Amazon for the second survey in a row at No. 3,” Wolfmeyer added.

Sally Beauty ( SBH ) was also highlighted as a prominent destination for teens. Wolfmeyer said that a “consistent shift toward specialty retail for beauty purchases, which should play out nicely for SBH. She assigned an Overweight rating to both Sally Beauty and Ulta with $19 and $615, respectively..

Rounding out Buy-rated names in the beauty space, Inter Parfums ( IPAR ) was highlighted as a key beneficiary of increased fragrance spend in younger cohorts. In particular, males have increased spending levels significantly, from $53 in the prior year survey to $70. Wolfmeyer assigned the stock a $170 price target.

Less encouragingly, haircare spending intention was cited as particularly weak, boding poorly for the likes of Olaplex ( OLPX ). Spending interest rose just 1% from the prior spring and declined from the fall.

“We saw Olaplex move back to No. 1 in this survey after dropping to No. 2 in the Fall, but at 10% mindshare, it still sits below last year’s 11%,” Wolfmeyer wrote. “With no brand having >10% mindshare, we view this as a testament to how young and innovative this category still is, and consumers are still finding which brands they’re most loyal to.”

Wolfmeyer maintained a Neutral rating on Olaplex.

Read more on Canaccord Genuity’s recent Buy initiation of Ulta Beauty .

For further details see: