Ulta Beauty to Report Q2 Earnings: Here's What You Should Expect

Ulta Beauty, Inc. ULTA is slated to report second-quarter fiscal 2025 earnings on Aug. 28, after market close.

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $2.65 billion, indicating a 4% increase from the prior-year quarter’s reported figure. Although the consensus mark for quarterly earnings has moved up 2.3% in the last 30 days to $4.98 per share, the projection indicates a decline of 6% from the figure reported in the year-ago quarter. ULTA delivered a trailing four-quarter earnings surprise of 11.9%, on average.

Factors Likely to Impact Ulta Beauty’s Q2 Earnings

Ulta Beauty remains at the forefront of beauty retail, seamlessly blending mass, prestige and luxury brands into a distinctive shopping experience. The company benefits from key growth drivers, including its omnichannel strategy that blends the convenience of physical retail with digital innovations such as upgraded mobile app features and personalized experiences powered by AI, which have boosted customer engagement and sales. 

Continued investments in marketing and social platforms are expanding brand visibility, while its strategic focus on strengthening product assortment and loyalty engagement supports traffic. In addition, Ulta Beauty’s emphasis on skincare, one of the fastest-growing beauty segments, has been delivering growth, fueled by strong performances from Sol de Janeiro and Tatcha. These combined efforts across product innovation, digital transformation and brand partnerships position the company well for second-quarter fiscal 2025.

Ulta Beauty's performance in the fiscal second quarter faces pressure from rising selling, general and administrative (SG&A) expenses. This increase is primarily due to strategic investments, higher advertising costs and elevated store payroll and benefits. Our model suggests SG&A expenses, as a percentage of net sales, to increase 180 basis points to 27.1% for the fiscal second quarter. In addition, margin performance is likely to have been impacted by increased supply-chain expenses. Another ongoing challenge is the persistent decline in Ulta Beauty’s makeup category, which poses a risk to its growth momentum.

What the Zacks Model Predicts About ULTA’s Q2 Earnings

As investors prepare for Ulta Beauty’s fiscal second-quarter announcement, the question looms regarding earnings beat or miss. Our proven model predicts an earnings beat for ULTA 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 exactly the case here.

Ulta Beauty has an Earnings ESP of +1.19% and carries a Zacks Rank of 2 at present. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

More Stocks With the Favorable Combination

Here are a few more companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Abercrombie & Fitch ANF currently has an Earnings ESP of +2.62% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports second-quarter fiscal 2025 numbers. The consensus mark for revenues is pegged at $1.2 billion, which indicates an increase of 4.5% from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for ANF’s quarterly EPS of $2.27 implies a decline of 9.2% from the year-ago quarter. The consensus mark has increased a penny in the past 30 days. ANF has a trailing four-quarter earnings surprise of 11.2%, on average.

American Eagle Outfitters AEO currently has an Earnings ESP of +5.00% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter fiscal 2025 EPS is pegged at 20 cents, which implies a 48.7% plunge year over year. The consensus mark has increased a penny in the past seven days.

The consensus mark for AEO’s quarterly revenues is pegged at $1.23 billion, which indicates a drop of 4.8% from the figure reported in the prior-year quarter. AEO delivered a negative trailing four-quarter earnings surprise of 0.3%, on average.

DICK'S Sporting Goods DKS currently has an Earnings ESP of +0.62% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports second-quarter fiscal 2025 numbers. The consensus mark for revenues is pegged at $3.6 billion, which indicates a rise of 3.6% from the figure reported in the year-ago quarter. 

The Zacks Consensus Estimate for DKS’ quarterly EPS of $4.29 implies a decline from $4.37 reported in the year-ago quarter. The consensus mark has gone up three cents in the past 30 days. DKS has a trailing four-quarter earnings surprise of 5.6%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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