Shares of cosmetics retailer Ulta Beauty (NASDAQ: ULTA) sank on Friday after the company reported financial results for the fiscal first quarter of 2023. As of 1:10 p.m. ET, Ulta Beauty stock is down 13%.

In Q1, which ended in April, Ulta Beauty had net sales of $2.6 billion, up 12% year over year thanks to a 9.3% increase in same-store sales. Admittedly, the company's net sales were slightly below Wall Street's expectations, but I don't believe that's why the stock fell today. The issue seems to be related more to profitability.

Ulta Beauty's Q1 operating margin was 16.8% -- a substantial drop from its operating margin of 18.7% in the same quarter of last year. In fairness to the company, its operating margin was at an all-time high last year. And a margin of 16.8% is still quite good, as the chart below shows.

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Source Fool.com