What: Shares of beauty retailer Ulta Salon Cosmetics & Fragrances slumped on Friday, falling as much as 10.5%. While there was no specific news related to the company driving the decline, broad weakness in retail stocks seems to be the culprit. At 2:15 Friday afternoon, the stock was down about 8%.
So what: A couple of disappointing department store earnings reports in the past few days may be contributing to Ulta's decline today. On Wednesday, Macy's badly missed estimates for revenue, posting a big same-store sales decline that sent shares of the retailer tumbling. On Thursday, Nordstrom missed estimates on all fronts, with revenue growing far slower than analysts expected. With both Macy's and Nordstrom coming up short, concerns about the health of consumer spending going into the holidays have pushed many retail stocks down.
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October retail sales data were also released by the Census Bureau today, with total retail sales rising 0.1% month-to-month, below expectations of a 0.3% rise. Core retail sales, which excludes certain categories, rose 0.2% month-to-month, also below expectations of 0.4% growth.
Now what: The decline in Ulta stock today has nothing to do with the company itself, as retail stocks in general are slumping. Macy's is down about 3.5% at the time of this writing, Nordstrom has plummeted about 17%, and the S&P Retail ETF is down about 3.8%. At the moment, investors are pessimistic about retail stocks in general, and Ulta isn't being left out.
The article Why Shares of Ulta Salon Cosmetics & Fragrances Inc. Slumped on Friday originally appeared on Fool.com.
Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Nordstrom and Ulta Salon, Cosmetics & Fragrance. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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