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Ulta Beauty (ULTA) to Post Q3 Earnings: What Awaits the Stock?
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Ulta Beauty, Inc. (ULTA - Free Report) is likely to register top-line growth when it reports third-quarter fiscal 2023 earnings on Nov 30. The Zacks Consensus Estimate for revenues is pegged at $2.5 billion, suggesting an increase of 5.6% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has declined by a couple of cents in the past seven days to $4.96 per share. This indicates a drop of 7.1% from the year-ago quarter’s reported figure. ULTA has a trailing four-quarter earnings surprise of 12.9%, on average.
Factors to Note
Ulta Beauty has been focused on its strategic priorities, which include strengthening the omnichannel business, undertaking tools to enhance guest experience, offering customers a curated and exclusive range of beauty products through innovation, deepening customer engagement by boosting rewards and loyalty programs, optimizing the cost structure and enhancing organizational talent.
Omnichannel strength and a solid skincare category have been fueling the company’s results. With regard to omnichannel, ULTA’s buy online, pickup in store (BOPIS) has been gaining traction for a while. In the second quarter of fiscal 2023, the company saw growth in all major categories (with skincare standing out), an increased number of loyalty members and greater brand engagement. The beauty category continued to generate growth.
Guests’ increased focus on self-care and maintaining healthy skincare routines works well for the skincare category. Newness in brands like Drunk Elephant, The Ordinary and Supergoop!, along with new brands like Bubble, Beautycounter and BYOMA, keep Ulta Beauty’s skincare category well-placed. Together, these factors bode well for the quarter under review. Our model suggests a 2.5% increase in same-store sales for the third quarter of fiscal 2023.
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Ulta Beauty’s SG&A expenses have been rising year over year for a while. In the second quarter, SG&A expenses rose 12.4% due to the deleverage of store payroll and benefits, increased store expenses and corporate overheads related to strategic investments.
The operating margin decreased from 17% to 15.5% in the second quarter. Management expects the operating margin to be under more pressure in the third quarter than the second quarter as it laps pricing gains (compared with the year-ago period) and due to an investment spending shift from the second quarter to the third quarter. Consequently, the third-quarter EPS is likely to have declined year over year.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict 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 not the case here.
Ulta Beauty carries a Zacks Rank #3 and has an Earnings ESP of -0.15%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Campbell Soup (CPB - Free Report) has an Earnings ESP of +0.07% and a Zacks Rank #3. The company is slated to witness a top-and-bottom-line decline when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for CPB’s quarterly revenues is pegged at $2.5 billion, which suggests a drop of 2.7% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Campbell Soup’s quarterly EPS has remained unchanged in the past 30 days at 87 cents, which suggests a decrease of 14.7% from the year-ago quarter’s level. CPB has a trailing four-quarter earnings surprise of 8.6%, on average.
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +5.23% and a Zacks Rank #3. The company is likely to register top-and-bottom-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Costco’s quarterly revenues is pegged at $57.7 billion, indicating a rise of 5.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Costco’s quarterly EPS of $3.44 suggests an increase of almost 11% from the year-ago quarter’s levels. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +0.19% and a Zacks Rank of 3. The company is likely to register a bottom-line increase when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.27 suggests a rise from $2.00 reported in the year-ago quarter.
lululemon’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.19 billion, which indicates a rise of 17.8% from the figure reported in the prior-year quarter. lululemon has a trailing four-quarter earnings surprise of 6.8%, on average.
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Ulta Beauty (ULTA) to Post Q3 Earnings: What Awaits the Stock?
Ulta Beauty, Inc. (ULTA - Free Report) is likely to register top-line growth when it reports third-quarter fiscal 2023 earnings on Nov 30. The Zacks Consensus Estimate for revenues is pegged at $2.5 billion, suggesting an increase of 5.6% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has declined by a couple of cents in the past seven days to $4.96 per share. This indicates a drop of 7.1% from the year-ago quarter’s reported figure. ULTA has a trailing four-quarter earnings surprise of 12.9%, on average.
Factors to Note
Ulta Beauty has been focused on its strategic priorities, which include strengthening the omnichannel business, undertaking tools to enhance guest experience, offering customers a curated and exclusive range of beauty products through innovation, deepening customer engagement by boosting rewards and loyalty programs, optimizing the cost structure and enhancing organizational talent.
Omnichannel strength and a solid skincare category have been fueling the company’s results. With regard to omnichannel, ULTA’s buy online, pickup in store (BOPIS) has been gaining traction for a while. In the second quarter of fiscal 2023, the company saw growth in all major categories (with skincare standing out), an increased number of loyalty members and greater brand engagement. The beauty category continued to generate growth.
Guests’ increased focus on self-care and maintaining healthy skincare routines works well for the skincare category. Newness in brands like Drunk Elephant, The Ordinary and Supergoop!, along with new brands like Bubble, Beautycounter and BYOMA, keep Ulta Beauty’s skincare category well-placed. Together, these factors bode well for the quarter under review. Our model suggests a 2.5% increase in same-store sales for the third quarter of fiscal 2023.
Ulta Beauty Inc. Price, Consensus and EPS Surprise
Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote
Ulta Beauty’s SG&A expenses have been rising year over year for a while. In the second quarter, SG&A expenses rose 12.4% due to the deleverage of store payroll and benefits, increased store expenses and corporate overheads related to strategic investments.
The operating margin decreased from 17% to 15.5% in the second quarter. Management expects the operating margin to be under more pressure in the third quarter than the second quarter as it laps pricing gains (compared with the year-ago period) and due to an investment spending shift from the second quarter to the third quarter. Consequently, the third-quarter EPS is likely to have declined year over year.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict 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 not the case here.
Ulta Beauty carries a Zacks Rank #3 and has an Earnings ESP of -0.15%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Campbell Soup (CPB - Free Report) has an Earnings ESP of +0.07% and a Zacks Rank #3. The company is slated to witness a top-and-bottom-line decline when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for CPB’s quarterly revenues is pegged at $2.5 billion, which suggests a drop of 2.7% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Campbell Soup’s quarterly EPS has remained unchanged in the past 30 days at 87 cents, which suggests a decrease of 14.7% from the year-ago quarter’s level. CPB has a trailing four-quarter earnings surprise of 8.6%, on average.
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +5.23% and a Zacks Rank #3. The company is likely to register top-and-bottom-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Costco’s quarterly revenues is pegged at $57.7 billion, indicating a rise of 5.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Costco’s quarterly EPS of $3.44 suggests an increase of almost 11% from the year-ago quarter’s levels. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +0.19% and a Zacks Rank of 3. The company is likely to register a bottom-line increase when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.27 suggests a rise from $2.00 reported in the year-ago quarter.
lululemon’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.19 billion, which indicates a rise of 17.8% from the figure reported in the prior-year quarter. lululemon has a trailing four-quarter earnings surprise of 6.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.