This growth stock has been on a decade-long streak higher.
Starting with Thanksgiving and on into Christmas, this holiday season will mark the first time since the onset of the pandemic that people are traveling and meeting in person with virtually no mandatory restrictions in place.
While individuals may still choose to mask or socially distance themselves from others, the majority of people seem to have moved on. Coupled with a workforce that’s increasingly returned to the office, there is a groundswell of demand for cosmetics, beauty care products, and salon services.
The power of personal interaction
The pandemic wrecked the retail market for those companies unlucky enough not to earn the distinction of being an “essential business.” Lockdowns, remote work opportunities, and an inability to have face-to-face contact meant there was little need for makeup and grooming.
A reopened economy has changed that dynamic. Even with a potential recession looming in the new year, the industry is showing why it is considered resistant to such impacts. The Lipstick Effect should carry Ulta, Coty, Estée Lauder (EL 0.43%), and even Olaplex Holdings forward for some time to come.
A stock that gets cheaper as it goes up
Although not a luxury brand, Ulta still commands significant pricing power, which has boosted its bottom line without affecting customer demand. Despite having raised prices this year to help offset the impact of inflation, same-store sales jumped almost 15% in the third quarter even though it enjoyed a near-26% rise last year.
