What happened

Shares of Ulta Beauty (NASDAQ:ULTA) were gaining last month as the salon and cosmetics chain rode the market rebound and got an endorsement from an Oppenheimer analyst. As a result, the stock finished the month up 19%, according to data from S&P Global Market Intelligence.

As you can see from the chart below, the stock got a jump-start at the beginning of the month thanks in part to the analyst note, and it continued to rise from there.

ULTA Chart

ULTA data by YCharts.

So what

Ulta limped into the new year, licking its wounds after the stock tumbled in December, when the company offered an underwhelming holiday-quarter forecast and slashed its expected store openings.

Two customers in an Ulta store

Image source: Ulta.

However, the stock recovered much of those losses in January, benefiting in part from a market recovery that favored growth stocks, and Ulta got a boost from Oppenheimer, the research firm, in a bullish analyst note. Analyst Rupesh Parikh maintained his buy rating on the stock, arguing that the company would continue to benefit from competitor store closings, including Macy's, Bon-Ton Stores, and Beauty Brands, which just closed 25 stores. Parikh also noted that Ulta could be a big winner if J.C. Penney and its more than 660 Sephora stores faltered, especially as J.C. Penney has already signaled that it would likely close a significant number of stores this year.

Ulta shares rose 6.3% on Jan. 7 as the report came out.

Now what

Ulta remains one of the best-performing retailers in the country, regularly putting up comparable sales growth in the high-single-digit range, while many traditional brick-and-mortar retailers are struggling and closing down stores.

Ulta's focus on its cosmetics and hair salons gives it a draw that can't be duplicated via e-commerce, and the beauty industry has proven itself to be a growth market, as today's report from Estee Lauder indicates. That news gave Ulta stock another small bump, up about 2% today, a sign the company may have had a better holiday season than its earlier guidance predicted.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Ulta Beauty. The Motley Fool has a disclosure policy.