Missed the Rally in Costco Stock? 2 Beaten-Down Retailers to Buy Now

Costco (NASDAQ: COST) has a habit of proving the skeptics wrong. Having started 2024 at a premium price compared to its rivals, the warehouse retailer has gone on to outperform peers again while touching new highs. Shares are up a blazing 45% in the past 12 months compared to Walmart's 20% gain.

Costco has a good shot at maintaining that positive momentum. However, many investors are concerned about its premium valuation and what that might mean for returns going forward. If you're among them, then consider a few relatively cheap retailers instead. Read on for some excellent reasons to like Ulta Beauty (NASDAQ: ULTA) and Lululemon Athletica (NASDAQ: LULU) shares right now.

Ulta Beauty is doing just about everything right for its business, and yet investors have still punished the stock in recent months. Sure, the spa and beauty products retailer is growing sales more slowly right now. Makeup and skincare shoppers just aren't spending as freely today and peers have responded by cutting prices. As a result, Ulta shareholders have had to accept slower revenue growth and weaker profitability.

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Source Fool.com