Hot Picks: Ulta Beauty, Interparfums and Edgewell lead retail rebound

Retail opportunities are emerging in beauty, fragrance and personal care as companies regain share, launch new products and expand into new markets.

BNN Bloomberg spoke with Susan Anderson, managing director at Canaccord Genuity, who outlined her top picks and how competitive dynamics, innovation and consumer trends are shaping the sector.

Key Takeaways

• Beauty retailers are regaining market share through improved assortments and stronger brand partnerships.
• Fragrance remains a high-growth category, supported by increased daily use among consumers.
• Inventory adjustments have masked underlying demand strength in some segments, creating potential upside.
• Personal care companies are focusing on core categories and margin expansion through restructuring efforts.
• Competitive pressure from emerging and value-focused brands continues to reshape the shaving market.

Read the full transcript below:

ANDREW: It’s time for Hot Picks, and today we’re zeroing in on three retail names with a focus on personal care. We’re joined by Susan Anderson, managing director at Canaccord Genuity. Great to see you. Thanks very much for joining us. Remind us about Ulta Beauty, what they specialize in, and why you see promise in this stock.

SUSAN: Yeah, so Ulta is kind of an all-things beauty and wellness specialty retailer. They specialize mainly in beauty, but they’re also adding wellness to their mix. They have a kind of newish CEO, Kecia Steelman, at the helm now, who’s been winning back market share with her Ulta Beauty Unleashed strategy. They recently beat their fourth-quarter comp sales expectations against a pretty high bar. This is really being driven by market share gains, with Ulta now gaining share in both prestige beauty and mass beauty, after struggling in some prior years from Sephora’s massive store rollout here in the U.S.

We just met with Kecia at Ulta Beauty World in Orlando, and she talked about how they’re very focused on brand relationships now and are focused on helping new brands grow, and then also offering more exclusives in-store. I think this is really what’s helping them to win back market share with new popular prestige brands, and then also rolling out across mass and masstige brands. And then also, they were kind of first to really focus on K-beauty in the stores.

They recently also bought Space NK in the U.K., which is helping them accelerate their international expansion. And then they’re also kind of a first mover in all things tech. They recently launched on TikTok Shop, and they’re soon to be on Google Gemini for shopping. We expect all of this to continue to drive market share gains and then also drive growth above the industry.

The stock has pulled back a bit now. It’s off 22 per cent from its highs and trades just under 18 times versus low 20 times in the past 10 years. So we think this is a really great buying opportunity for Ulta.

ANDREW: Talk to us about Inter Parfums. I hope I’m pronouncing that right. They are huge in the perfume and scent business.

SUSAN: Yeah, correct. So fragrance continues to be a top performer in beauty, with fragrance sales trending double digits in the last three months, according to Circana. We think Inter Parfums is well positioned to take advantage of the strength in fragrance, as more consumers in the U.S. are now using fragrance in their daily routines.

Inter did struggle a bit last year, even as fragrance sales were strong, because retailers pulled down on inventory. This led to some very conservative guidance for this year. They’re saying that sales are going to be flattish, even though sell-throughs to start the year continue to be double digits. So we think there’s upside to the numbers.

They report their first-quarter sales on Wednesday, and we’re estimating sales to be at 4.8 per cent. The Street is at 4.6 per cent. If they beat this, I think it will be a good indication to start the year, and we would expect multiple expansion from the currently historically low levels.

Right now, they trade at 17.5 times next year’s earnings versus the mid-20s range over the past five years. This is really the lowest level we’ve seen since the Great Recession. They also have a lot of newness coming. They just launched their Ferragamo brand this year, they have Off-White coming next year, and they just recently bought two new licences, David Beckham and Nautica, which will roll out in the next couple years and add to growth.

So we also think this one is a really good buying opportunity on these lows.

ANDREW: And finally, Edgewell Personal Care. They seem to be big in the shaving business, among other areas. They own Schick and Wilkinson Sword.

SUSAN: Yeah, yeah. So they’ve also struggled over the past couple years. The wet shave environment has been pretty competitive. You know, we saw Harry’s come into the market, Dollar Shave Club, Billie — which they ended up buying and they now own on the women’s side — but that’s really resulted in some lower growth in the U.S., even though international has continued to be strong for them in the wet shave business.

They’re also higher levered at four times. Most players are two to three times, which I think has hurt their multiple. However, recently they sold their feminine care business, which will allow them to use those proceeds to get down to three times leverage this year. So I think investors will be happy with that.

This should also help to boost margins, as it was a lower-growth, lower-margin business, and I think they have opportunity to get back to pre-COVID EBITDA margins, which is 400 basis points higher than where they’re at now. Every 100 basis points of margin expansion would lead to incremental 34 cents in earnings, so I think it’s a great opportunity.

Also, with the feminine care business now sold, they’re doubling down on wet shave and sun care, which is kind of their core. We’re already seeing improvement in the sales this year. Second-quarter top line in the sun care business is off to a really strong start. So we also think they could beat in the second quarter this year when they report.

So this is another one that we would own here. It trades at 10 times next year’s numbers. Historically, it’s traded at 12 times, and I think there’s opportunity for multiple expansion from there, just given the deleveraging.

ANDREW: Thank you very much. I really appreciate it. Thanks for having me. That was Susan Anderson of Canaccord Genuity.

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This BNN Bloomberg summary and transcript of the April 20, 2026 interview with Susan Anderson are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.