Shares of Ulta Beauty (ULTA) - Get Report jumped Wednesday amid a broad-market rally as investors took heart over the $2 trillion federal stimulus package and the cosmetics and personal- care-products retailer took steps to shore up its bottom line.
Ulta's share price at last check shot up 10% to $196.13 as stocks broadly surged amid news a federal economic rescue package appears poised to pass. The accord includes potentially hundreds of billions in support for various businesses and industries hit hard by the coronavirus shutdown.
The increase in the retailer's stock price also comes on the heels of Ulta's report on Tuesday that it would draw down $800 million from its revolving credit line.
The extra cash gives it $1.3 billion to buoy its operations as state governments ramp up restrictions on businesses. These include requiring nonessential companies to shut stores, offices and factories.
Still, the executives at the Bolingbrook, Ill., company, which depends heavily on its network of 1,254 stores across the country, also signaled it faces some big challenges ahead, with e-commerce no instant panacea.
Ulta Chief Executive Mary Dillon noted on CNBC that while e-commerce is "great," the vast majority of sales - 80% to 85% - still take place in stores.
As Ulta battens down the hatches amid the coronavirus-driven economic storm, the company said it was "reevaluating the pace and timing" of its stock buyback.
In a statement, Ulta also said it was cutting capital expenditures and expenses while "leveraging its digital and e-commerce platforms to drive sales" as it temporarily shuts down its retail stores.