Ulta Beauty Q4 Earnings on Deck: Should Investors Expect a Beat?

Ulta Beauty, Inc. ULTA is likely to witness top-line growth when it reports fourth-quarter fiscal 2025 earnings on March 12. The Zacks Consensus Estimate for revenues is pegged at $3.83 billion, indicating an increase of 9.9% from the prior-year quarter’s reported figure. 

The consensus mark for earnings has risen from $7.93 to $7.98 in the past 30 days, though it suggests a drop of 5.7% from the figure recorded in the year-ago quarter. ULTA has a trailing four-quarter earnings surprise of 15.7%, on average.

Factors Likely to Influence ULTA’s Q4 Results

Ulta Beauty’s top-line growth is supported by its “Ulta Beauty Unleashed” strategy and a record loyalty base. Continued merchandising innovation and exclusive brand launches, including Beyonce’s Cecred haircare line and an expanded K-beauty assortment, are helping attract shoppers and drive engagement. By offering a broad mix of mass and prestige products, the company continues to serve customers across multiple price points and maintain its position as a leading beauty retail destination.

Digital momentum and omnichannel capabilities, including the mobile app and the recently launched UB Marketplace, are also contributing to customer engagement. Investments in personalization tools and an expanded ship-from-store network are improving convenience and helping streamline the shopping experience. Steady demand in categories such as fragrance and skincare, supported by new luxury brand introductions and expanded shelf space during the holiday season, may have provided a boost to sales performance. For the fourth quarter, ULTA expects comparable sales growth in the range of 2.5%-3.5%.

Conversely, the bottom line faces pressure from deleveraged selling, general and administrative (SG&A) expenses. Higher incentive compensation and increased store payroll, aimed at supporting store operations and guest experience initiatives, have contributed to elevated operating costs. At the same time, ongoing spending on cloud-based technology platforms and digital infrastructure upgrades continues to add to expenses.

Profitability may also be affected by an adverse channel mix as digital sales grow faster than store-based transactions. A cautious macroeconomic backdrop may further influence consumer spending behavior, with shoppers focusing more on value and selective purchases. Inflationary pressures on store-related expenses and operational costs also pose a threat to margins. Operating margin for the quarter under review is projected between 12% and 12.3%, reflecting the impact of both gross margin dynamics and expense deleverage. Earnings are expected to be in the range of $7.61-$7.90 per share.

Earnings Whispers for ULTA Stock

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 exactly the case here.

Ulta Beauty currently carries a Zacks Rank #3 and an Earnings ESP of +11.98%. 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 worth considering, as our model shows that these also have the right combination of elements to beat on earnings this reporting cycle.

Casey's General Stores CASY currently has an Earnings ESP of +9.37% and a Zacks Rank of 3. The Zacks Consensus Estimate for Casey's upcoming quarter’s revenues is pegged at $4.02 billion, which calls for an increase of 3.1% from the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Casey's quarterly earnings per share is pegged at $3.01, indicating 29.2% growth from the year-ago period. CASY delivered a trailing four-quarter earnings surprise of 24.1%, on average.

Dollar General Corporation DG currently has an Earnings ESP of +5.38% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $10.78 billion, which indicates an increase of 4.6% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Dollar General’s upcoming quarter’s earnings per share is pegged at $1.61, implying a 4.2% year-over-year decline. DG delivered a trailing four-quarter earnings surprise of 22.9%, on average.

Dollar Tree DLTR currently has an Earnings ESP of +2.38% and a Zacks Rank #3. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.47 billion, which indicates a decrease of 33.8% from the figure reported in the prior-year quarter. 

The Zacks Consensus Estimate for Dollar Tree’s upcoming quarter’s earnings per share is pegged at $2.53, implying 19.9% year-over-year growth. DG delivered a trailing four-quarter earnings surprise of 29.1%, on average.

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

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