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Ulta Beauty, Inc. ULTA is slated to report its first-quarter fiscal 2025 earnings on May 29, after market close.
The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $2.79 billion, suggesting a 2.2% increase from the prior-year quarter’s reported figure. Although the consensus mark for quarterly earnings has moved up by a couple of cents in the last seven days to $5.75 per share, the projection indicates a decline of 11.1% from the figure reported in the year-ago quarter. ULTA delivered a trailing four-quarter earnings surprise of almost 9%, on average.
As investors prepare for Ulta Beauty’s fiscal first-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 +0.23% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ulta Beauty Inc. price-eps-surprise | Ulta Beauty Inc. Quote
Ulta Beauty continues to lead the beauty retail space by integrating mass, prestige and luxury brands within an engaging shopping experience. The company gains from several key growth drivers, including its strong omni-channel strategy that balances physical retail expansion with digital innovation, such as enhanced mobile app features and AI-driven personalization, 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, is 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 first-quarter fiscal 2025.
Ulta Beauty's performance in the fiscal first 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 increase by 220 basis points to 26.6% for the fiscal first quarter. In addition, margin performance is likely to have been impacted by lower merchandise margins and 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.
Ulta Beauty has witnessed an impressive surge in its stock price over the past three months. The stock has rallied 12.8%, outpacing the Zacks Retail - Miscellaneous industry’s decline of 7.1%.
From a valuation standpoint, Ulta Beauty stock is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 17.25, slightly above the industry average of 16.12.
Ulta Beauty remains a strong player in the beauty retail space, supported by a robust omni-channel strategy, a growing skincare category and a loyal customer base. While the company’s long-term fundamentals appear solid, near-term headwinds — such as rising SG&A expenses, margin pressure and softness in the makeup category — may weigh on fiscal first-quarter performance. Despite these challenges, the stock’s recent outperformance and fair valuation suggest limited downside. Given the balanced risk-reward profile and the potential for long-term growth, investors may consider holding ULTA stock for now.
Here are some more companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Five Below, Inc. FIVE currently has an Earnings ESP of +4.18% and a Zacks Rank of 3. FIVE is likely to register a top-line increase when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $961.1 million, indicating an 18.4% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Five Below’s EPS is pegged at 80 cents, implying a 33.3% jump from the year-ago quarter. FIVE delivered an earnings surprise of 3% in the last quarter.
Gap GAP has an Earnings ESP of +3.03% and a Zacks Rank of 3 at present. GAP is likely to register top-line growth when it releases first-quarter 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.42 billion, which implies growth of 0.8% from the figure reported in the year-ago quarter.
The consensus estimate for GAP’s quarterly EPS has increased by a penny in the past 30 days to 44 cents, implying growth of 7.3% from the year-ago quarter’s number. GAP delivered an earnings surprise of 77.5%, on average, in the trailing four quarters.
Burlington Stores BURL has an Earnings ESP of +3.45% and currently carries a Zacks Rank of 3. BURL’s top line is anticipated to advance year over year when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.52 billion, which suggests a 6.9% rise from the figure reported in the year-ago quarter.
The consensus estimate for Burlington Stores’ first-quarter earnings is pegged at $1.40 per share, unchanged year over year. BURL has a trailing four-quarter earnings surprise of 17.9%, on average.
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This article originally published on Zacks Investment Research (zacks.com).
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