Ulta Beauty Gears Up for Q3 Earnings: Here's What You Should Know

Ulta Beauty, Inc. (ULTA) is slated to report third-quarter fiscal 2025 earnings on Dec. 4, after market close. The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $2.71 billion, indicating a 7.3% increase from the prior-year quarter’s reported figure.

The consensus mark for quarterly earnings has moved up by 3 cents in the past seven days to $4.51 per share. The projection indicates a decline of 12.3% from the figure reported in the year-ago quarter. ULTA delivered a trailing four-quarter earnings surprise of 16.3%, on average.

Ulta Beauty Inc. Price, Consensus and EPS Surprise

Ulta Beauty Inc. price-consensus-eps-surprise-chart | Ulta Beauty Inc. Quote

Factors Likely to Impact Ulta Beauty’s Q3 Earnings

Ulta Beauty is expected to deliver a steady third quarter of fiscal 2025, as growth has been continuing at a more normalized pace following the strong second quarter. The company has been benefiting from sustained fragrance strength, improving makeup trends and ongoing new-brand introductions. The planned invite-only online marketplace in the fiscal third quarter is likely to have enhanced engagement and create incremental top-line opportunities.

Ulta Beauty has been continuing to leverage its omnichannel ecosystem to drive traffic and conversion. Store-fulfilled e-commerce, loyalty personalization and digital marketing tools have been supporting customer engagement across channels. At the same time, investments in social platforms, experiential activations and exclusive brand partnerships have been expanding brand visibility. The ongoing expansion of wellness into additional stores has been strengthening its long-term growth profile.

The company has been grappling with rising selling, general and administrative (SG&A) expenses. In the fiscal second quarter, the SG&A increased 15% and as a percentage of net sales, it increased 130 basis points primarily due to higher incentive compensation, store payroll and benefits, and increased corporate overhead. Any further SG&A deleverage in the fiscal third quarter is likely to have weighed on overall profitability. Our model indicates SG&A expenses, as a percentage of sales, to increase 280 bps to 29.8% in the fiscal third quarter.

What the Zacks Model Predicts About ULTA’s Q3 Earnings

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 +1.84% and 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 other companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Macy's, Inc. (M) currently has an Earnings ESP of +11.11% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is likely to register a decrease in the top line when it reports third-quarter fiscal 2025 numbers. The consensus mark for revenues is pegged at $4.59 billion, which indicates a decrease of 3.3% from the figure reported in the year-ago quarter.

The Zacks Consensus Estimate for Macy's quarterly EPS of 14 cents implies a decline of 450% from the year-ago quarter. M delivered a trailing four-quarter earnings surprise of 25.8%, on average.

American Eagle Outfitters (AEO) currently has an Earnings ESP of +1.55% and a Zacks Rank of 2. The company is likely to register an increase in the top line when it reports third-quarter fiscal 2025 numbers. The consensus mark for revenues is pegged at $1.32 billion, which indicates an increase of 2.3% from the figure reported in the year-ago quarter.

The Zacks Consensus Estimate for American Eagle Outfitters’ quarterly EPS of 43 cents implies a decline of 10.4% from the year-ago quarter. AEO delivered a trailing four-quarter earnings surprise of 30.3%, on average.

Dollar General Corporation (DG) currently has an Earnings ESP of +3.35% and a Zacks Rank #3. The Zacks Consensus Estimate for DG’s third-quarter fiscal 2025 earnings per share is pegged at 92 cents, implying 3.4% year-over-year growth.

The Zacks Consensus Estimate for quarterly revenues is pegged at $10.61 billion, which indicates an increase of 4.2% from the figure reported in the prior-year quarter. Dollar General delivered a trailing four-quarter earnings surprise of 11.3%, on average.

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

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