Ulta Beauty, Inc. (Nasdaq:ULTA), a seller of beauty products online and through a chain of stores in the United States, revealed financial blemishes during its May 31 first-quarter earnings call, which preceded a share-price pullback that offers potential capital appreciation.

The management team scaled back Ulta Beauty’s guidance amid reduced profit margins, despite reporting better-than-expected first-quarter 2018 results. The acknowledgement of thinning margins is an important factor for investors to weigh as shoppers increasingly go online to find and buy what they want.

Ulta Beauty, headquartered in Bolingbrook, Illinois, operates a chain of more than 1,000 beauty stores in the United States that sell cosmetics and skincare brands and men’s and women’s fragrances, along with haircare products. The company offers an interactive shopping experience by combining both mass market and prestige beauty products, but its growth has slowed along with the rest of the category amid increased competition, especially online.

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Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce,Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz.