Beauty industry dynamics continued to play in ULTA’s favor in 1Q

The UBS Evidence Lab US competition model (> Access Dataset) shows steady storeclosures in the beauty retail comp set (~40 retailers), as net store formation declined -1.2% in 1Q’21, in line with 4Q’20. Notably, Ulta’s contribution remained modest as itadded ~5 bps to overall store growth, in line with 4Q (15 bps avg over past 8 Qs).Further, Evidence Lab data (> Access Dataset) indicates that ULTA has been recentlyadding fewer new products with 69% of its online assortment available in a year agoperiod (vs. 63% in ‘20 & 54% in ‘19). Though, we believe there's a strong pipeline ofnew product launches at retailers creating a favorable setup as socialization returns.