Ulta Beauty seen as a buy with strong sales growth and margin gains despite investor concerns.

Ulta Beauty remains a recommended buy as its core business shows strength with 5.3% comparable sales growth in Q1 and a loyal customer base of 46.9 million members. The company improved its gross margin to 40.1% through better inventory and merchandise management, although increased spending on sales and marketing temporarily affects operating leverage. Trading at about 15 times next twelve months price-to-earnings, Ulta offers potential for low-teens earnings per share growth, supported by store expansion, digital initiatives, and share buybacks, making it attractive despite some investor worries about beauty demand and margin sustainability.