Cramer: If Ulta Salon doesn’t close up, we’re in trouble

As investors try to get a hold of the ever-changing market landscape, CNBC's Jim Cramer said Friday they should keep an eye on Ulta Salon Cosmetics' stock amid the beauty retailer's latest earnings beat.

"This was an ideal stock that was up 8 points after it reported last night and now it's barely up 1 percent. This is your stock to watch, because this was magnificent," Cramer said on "Squawk on the Street," referring to the earnings report and CEO Mary Dillon's conference call.

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"If it can't close up, we really are in a little more of a sick market than we thought. This was textbook," Cramer added.

The company reported fiscal second-quarter earnings per share and revenue after the bell Thursday that were above Wall Street expectations. Its stock was higher midmorning Friday.

Disclosure: Cramer's trust did not own Ulta stock when this article was published.