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Ulta Beauty (ULTA) Launches New Sustainability Initiative

Zacks Equity Research
·3 min read

Ulta Beauty Inc. ULTA is keen on enhancing its clean beauty business. In association with other strategic partners, the company announced the launch of a comprehensive initiative called ‘Conscious Beauty at Ulta Beauty’. The program reflects Ulta Beauty’s transparent and sustainable approach toward customers.

Under this initiative brands will be accredited in five key categories namely Clean Ingredients, Cruelty Free, Vegan, Sustainable Packaging and Positive Impact. The program is expected to be rolled out by this fall. Following this announcement, the company’s shares were up 3.1% in the aftermarket trading session on Jul 14.

Under the Clean Ingredients pillar, the brands will be certified to be made free of more than 25 types of chemical categories as well as parabens and phthalates. This certification will be provided by ClearForMe, a prominent independent ingredient authority. Further, brands will be marked as Cruelty-free guarantee that they have never engaged in animal testing. Third-party organizations like People for the Ethical Treatment of Animals (PETA) and Choose Cruelty-Free and Leaping Bunny will provideCruelty-free certification to the brands.


 

Further, the company’s Vegan category will list beauty items that do not contain animal products, animal by-products or animal derivatives. Positive impact pillar will support brands that believe in giving back as well as advocate meaningful matters.

Talking about sustainable packaging, Ulta Beauty will recognize brands that use recyclable, reduced or refillable packaging. Effective today, management made commitments that 50% of the company’s packaging, even for the Ulta Beauty Collection, will be produced using recycled or bio-sourced materials, or will be recyclable or refillable by 2025.

Prior to this, Ulta Beauty took another step to augment its clean beauty business. On Jun 16, the company announced its partnership with Credo Beauty— a leading clean beauty retailer. Per the deal, an exclusive collection of eight clean beauty brands will be available for Ulta Beauty customers, starting this fall.

Ulta Beauty’s latest plan along with the recent alliance with Credo is a step closer to propagate the need for sustainable beauty in the cosmetic industry.

We note that shares of this Zacks Rank #4 (Sell) company have lost 24.1% so far this year compared with the industry’s decline of 9.7%.

3 Solid Picks From Miscellaneous Retail Space

Sally Beauty Holdings SBH, which currently sports a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 4.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Office Depot ODP, which currently sports a Zacks Rank #1,has a long-term earnings growth rate of 6.9 %.

Tractor Supply Company TSCO, with a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 12.4%.

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