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Here's What to Expect from Ulta Beauty's (ULTA) Q3 Earnings

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Shares of Ulta Beauty, Inc. (ULTA - Free Report) plummeted over 5% Tuesday morning just a few days before the company is set to release its third quarter financial results. The dip helps to slow a run of outsized success for ULTA stock. So, let’s see what investors should expect from Ulta after the closing bell Thursday.

Overview

Roughly 90% of the S&P 500’s retail sector have reported their quarterly earnings results so far, which includes industry powers Target (TGT - Free Report) , Walmart (WMT - Free Report) , Macy’s (M - Free Report) , and Amazon (AMZN - Free Report) . Total earnings for these companies jumped 27.1% from the year-ago quarter on 6.8% higher revenues (also read: Q3 Earnings Season Scorecard).

Meanwhile, cosmetic giant Ulta is coming off a second quarter that saw its revenues surge over 15% to reach $1.49 billion. Plus, the company’s comp sales popped 6.5%, which came after Ulta’s same-store sales climbed 11.7% in the year-ago period. The company’s adjusted Q2 earnings also soared 34% and e-commerce sales climbed 38%.

Price Movement

Ulta has performed well over the last year and this has been reflected in its stock price. Shares of the beauty retailer have surged 30% over the past 12 months, which crushed the S&P 500’s 6% climb and its industry’s 18% jump. Investors can also see that Ulta has performed even better over the last five years.

Ulta stock hovered down around 5% at $291 a share following morning trading Tuesday, after briefly touching a new high.

 

Outlook & Earnings Trends

Ulta, which currently boasts 1,124 stores, is projected to see its Q3 revenue surge by 16.3% to reach $1.56 billion, based on our current Zacks Consensus Estimate. Plus, the company’s full-year revenues are expected to climb 13.8% to reach $6.7 billion. 

Moving onto the bottom end of the income statement, Ulta is expected to see its adjusted quarterly earnings soar 27.1% to reach $2.16 per share. Better yet, the company’s full-year earnings are projected to surge nearly 34%. Investors should, however, note that Ulta’s earnings estimate revisions have been rather mixed recently, as the chart below helps us see.

 

 

Ulta is currently a Zacks Rank #3 (Hold) based, in part, on its recent earnings revision activity. The company is scheduled to release its Q3 financial results after the market closes on Thursday.

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