Greenberg: Putting Lipstick on Ulta

SAN DIEGO (TheStreet) -- The saga continues: No stranger to readers of this blog or my Reality Check newsletter, where it has long been red-flagged, Ulta Salon's (ULTA) stock is one of the most confounding among retail stories. 

Its shares have remained remarkably resilient, even in the recent rout, as CEO Mary Dillon made the rounds with New York analysts this week to discuss the company's makeover. It's not that the company, in the midst of a strategic review, is broadcasting that it is making widespread changes.

But in his report earlier this week reiterating his "outperform" on Ulta, after hosting investor meetings with Dillon, analyst Gary Balter said he was impressed with her plans to "reinvest in infrastructure, brand positioning, marketing and customer relationships..."

In other words, a costly makeover that even Balter concedes "is on improving results over the next five years, not on the quarter."

Investors, of course, give lip service to being patient for long-term results, but aside from Amazon (AMZN) (where patience may be wearing thin) they rarely do.

Ulta, for example, has been suffering from sluggish traffic as it appears its customers are shifting to lower-margin purchases online. Among the changes, the company is testing a smaller store format. Of course, that flies in the face of what the company was supposed to be -- "a beauty superstore." That's how it described itself in its 10-K until the last 10-K, from last April, where the word "superstore" disappeared.

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