Ulta Beauty: The Reset Makes The Buy Case More Attractive

Ulta Beauty remains a buy as risk/reward improves amid investor concerns about beauty demand and margin durability. ULTA's core business is robust, with 5.3% Q1 comp sales growth and broad-based category strength supported by a 46.9M-member loyalty program. Gross margin expanded to 40.1% on better inventory control and merchandise margin, though SG&A investments temporarily pressure operating leverage. At ~15x NTM PE, ULTA offers visible low-teens EPS growth potential, store expansion, digital initiatives, and buybacks supporting attractive upside.

I wrote about Ulta Beauty ( ULTA ) previously with a buy rating because recovery was becoming easier to see. Makeup was improving, gross margin was moving in the right direction, and management execution risk