Walgreens (WBA) Looks to Copy ULTA's (ULTA) Sucess with Rewards Program - Oppenheimer

October 3, 2016 9:41 AM EDT
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Price: $246.99 --0%

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    11 Buy, 10 Hold, 0 Sell

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Oppenheimer analyst Rupesh Parikh notes Walgreens (NYSE: WBA) is attempting to take a page out of ULTA Salon's (NASDAQ: ULTA) playbook.

On 10/2, Walgreens officially launched a new beauty rewards program. "Beauty Enthusiasts" earn 5,000 points for every $50 spent on beauty products.

Parikh commented, "An important part of ULTA's success in recent years has been its ability to connect directly with consumers through its loyalty program, targeted emails/promotions, and monthly mailers. As a platinum member, we have seen first-hand the power of this program through platinum perks such as 20% off, birthday gifts, and vendor-specific offers. We believe ULTA's first-mover advantage and differentiated product selection in both mass and prestige should help to maintain its leading position. We plan to watch Walgreens' efforts closely, but think it likely captures more spend within the drugstore channel if successful vs. encroaching on ULTA's territory."

The firm maintained an Outperform rating and price target of $300 ON WBA.

For an analyst ratings summary and ratings history on ULTA Salon click here. For more ratings news on ULTA Salon click here.

Shares of ULTA Salon closed at $237.98 yesterday.

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