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Ulta Beauty (ULTA) Queues Up for Q2 Earnings: Things to Note
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Ulta Beauty, Inc. (ULTA - Free Report) is likely to register top and bottom-line growth when it reports second-quarter fiscal 2022 earnings on Aug 25. The Zacks Consensus Estimate for quarterly revenues is pegged at $1,198 million, suggesting a rise of 11.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for quarterly earnings has risen by 1.2% in the past seven days to $4.90 per share, which indicates 7.5% growth from the figure reported in the prior-year quarter. The beauty product company has a trailing four-quarter earnings surprise of 49.8%, on average. ULTA delivered an earnings surprise of around 42% in the last reported quarter.
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Ulta Beauty has been benefiting from market share gains in major beauty categories for a while now, with skincare standing out due to consumers’ rising interest in self-care and the company’s focus on newness and innovation. Apart from these, the company has been seeing strength in the fragrance and haircare category, with product newness being a solid driver. Even the makeup category is on track for full recovery.
The company’s omnichannel strength has been another driver. Ulta Beauty has been enriching its omnichannel experience through launches like Beauty to Go, options like same-day delivery (in some stores) and unique salon services across stores, among others. The company’s buy online, pick up in store (BOPIS) continued to gain traction in the first quarter. Also, its alliance with Target has been yielding favorably.
That said, escalated costs are a concerning factor. The company witnessed elevated supply-chain costs in the first quarter due to higher wage rates, transportation costs and increased fuel rates. It expects elevated supply-chain costs to remain a headwind for the rest of the year. SG&A expenses are likely to deleverage in fiscal 2022, mainly due to expenses ($70-$75 million) associated with the company’s strategic priorities and the increased wage rate. These factors raise worries for the quarter to be reported.
However, Ulta Beauty’s focus on its six strategic priorities bodes well. The company’s foremost priority is to strengthen its omnichannel business and explore the potential of both physical and digital facets. Next, the company is undertaking various tools to enhance the experience of guests like offering a virtual try-on tool and in-store education and reimagining fixtures, among others. Thirdly, ULTA concentrates on offering customers a curated and exclusive range of beauty products through innovation. Fourthly, the company is focused on deepening customer engagement by boosting rewards and loyalty programs. Fifthly, management is committed to optimizing its cost structure. Apart from these, the company strives to boost organizational talent and strengthen the culture.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Ulta Beauty this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Ulta Beauty carries a Zacks Rank #2 and has an Earnings ESP of +4.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.
Dollar General (DG - Free Report) currently has an Earnings ESP of +1.04% and a Zacks Rank #2. DG is expected to register top and bottom-line growth when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for Dollar General’s quarterly revenues is pegged at $9.4 billion, which suggests growth of 8.6% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dollar General’s quarterly earnings has moved a penny up in the past 30 days to $2.93 per share, suggesting an improvement of 8.9% from the year-ago quarter’s tally. DG delivered an earnings beat of 2.8%, on average, in the trailing four quarters.
Fastenal (FAST - Free Report) currently has an Earnings ESP of +0.35% and a Zacks Rank #3. The company is likely to register a bottom-line improvement when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 48 cents suggests an improvement of 14.3% from the figure reported in the year-ago quarter.
Fastenal's top line is also expected to have risen year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.8 billion, which indicates an improvement of 15.1% from the figure reported in the prior-year quarter. FAST has a trailing four-quarter earnings surprise of 4.3%, on average.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +1.75% and a Zacks Rank of 2. The company is likely to register a rise in the top and bottom lines when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for DLTR’s quarterly revenues is pegged at $6.8 billion, which suggests a jump of almost 7% from the figure reported in the prior-year quarter.
The consensus mark for Dollar Tree’s quarterly earnings has remained unchanged at $1.57 per share in the past 30 days. The consensus estimate for DLTR’s quarterly earnings suggests a rise of 27.6% from the year-ago quarter’s reported figure. Dollar Tree delivered an earnings surprise of 13.1%, on average, in the trailing four quarters.
Image: Bigstock
Ulta Beauty (ULTA) Queues Up for Q2 Earnings: Things to Note
Ulta Beauty, Inc. (ULTA - Free Report) is likely to register top and bottom-line growth when it reports second-quarter fiscal 2022 earnings on Aug 25. The Zacks Consensus Estimate for quarterly revenues is pegged at $1,198 million, suggesting a rise of 11.7% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for quarterly earnings has risen by 1.2% in the past seven days to $4.90 per share, which indicates 7.5% growth from the figure reported in the prior-year quarter. The beauty product company has a trailing four-quarter earnings surprise of 49.8%, on average. ULTA delivered an earnings surprise of around 42% in the last reported quarter.
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote
Factors to Note
Ulta Beauty has been benefiting from market share gains in major beauty categories for a while now, with skincare standing out due to consumers’ rising interest in self-care and the company’s focus on newness and innovation. Apart from these, the company has been seeing strength in the fragrance and haircare category, with product newness being a solid driver. Even the makeup category is on track for full recovery.
The company’s omnichannel strength has been another driver. Ulta Beauty has been enriching its omnichannel experience through launches like Beauty to Go, options like same-day delivery (in some stores) and unique salon services across stores, among others. The company’s buy online, pick up in store (BOPIS) continued to gain traction in the first quarter. Also, its alliance with Target has been yielding favorably.
That said, escalated costs are a concerning factor. The company witnessed elevated supply-chain costs in the first quarter due to higher wage rates, transportation costs and increased fuel rates. It expects elevated supply-chain costs to remain a headwind for the rest of the year. SG&A expenses are likely to deleverage in fiscal 2022, mainly due to expenses ($70-$75 million) associated with the company’s strategic priorities and the increased wage rate. These factors raise worries for the quarter to be reported.
However, Ulta Beauty’s focus on its six strategic priorities bodes well. The company’s foremost priority is to strengthen its omnichannel business and explore the potential of both physical and digital facets. Next, the company is undertaking various tools to enhance the experience of guests like offering a virtual try-on tool and in-store education and reimagining fixtures, among others. Thirdly, ULTA concentrates on offering customers a curated and exclusive range of beauty products through innovation. Fourthly, the company is focused on deepening customer engagement by boosting rewards and loyalty programs. Fifthly, management is committed to optimizing its cost structure. Apart from these, the company strives to boost organizational talent and strengthen the culture.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Ulta Beauty this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Ulta Beauty carries a Zacks Rank #2 and has an Earnings ESP of +4.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.
Dollar General (DG - Free Report) currently has an Earnings ESP of +1.04% and a Zacks Rank #2. DG is expected to register top and bottom-line growth when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for Dollar General’s quarterly revenues is pegged at $9.4 billion, which suggests growth of 8.6% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dollar General’s quarterly earnings has moved a penny up in the past 30 days to $2.93 per share, suggesting an improvement of 8.9% from the year-ago quarter’s tally. DG delivered an earnings beat of 2.8%, on average, in the trailing four quarters.
Fastenal (FAST - Free Report) currently has an Earnings ESP of +0.35% and a Zacks Rank #3. The company is likely to register a bottom-line improvement when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 48 cents suggests an improvement of 14.3% from the figure reported in the year-ago quarter.
Fastenal's top line is also expected to have risen year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.8 billion, which indicates an improvement of 15.1% from the figure reported in the prior-year quarter. FAST has a trailing four-quarter earnings surprise of 4.3%, on average.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +1.75% and a Zacks Rank of 2. The company is likely to register a rise in the top and bottom lines when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for DLTR’s quarterly revenues is pegged at $6.8 billion, which suggests a jump of almost 7% from the figure reported in the prior-year quarter.
The consensus mark for Dollar Tree’s quarterly earnings has remained unchanged at $1.57 per share in the past 30 days. The consensus estimate for DLTR’s quarterly earnings suggests a rise of 27.6% from the year-ago quarter’s reported figure. Dollar Tree delivered an earnings surprise of 13.1%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.