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Here's How Ulta Beauty (ULTA) Looks Just Ahead of Q1 Earnings

Ulta Beauty, Inc. ULTA is slated to release first-quarter fiscal 2020 results on May 28. The beauty retailer has a trailing four-quarter positive earnings surprise of 2%, on average.

The Zacks Consensus Estimate for first-quarter earnings has declined 37.8% to 61 cents per share in the past 30 days. The metric suggests a drop of 80.2% from the year-ago quarter’s reported figure. Further, the consensus mark for revenues is pegged at $1.25 billion that indicates a decline of 28.1% from the figure reported in the year-ago quarter.

Ulta Beauty Inc. Price and EPS Surprise

 

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


Key Factors to Note

Due to the coronavirus outbreak, Ulta Beauty had shut down all its stores effective Mar 19. COVID-19 induced store closures are likely to have marred the company’s performance in the fiscal first quarter. In a recent press release, management highlighted that the company is supporting its employees with monetary and other benefits. Notably, such rise in employee-related costs is likely to have put pressure on the company’s bottom line in the to-be-reported quarter.

Moreover, the U.S. beauty market has been witnessing a soft makeup sales trend due to the absence of innovation in this category. This trend continued through 2019 and saw a further slowdown during fourth-quarter fiscal 2019. Also, rising selling, general and administrative (SG&A) expenses has been a concern for Ulta Beauty for a while.

Nevertheless, the company is benefiting from efforts to enhance beauty product offerings. Additionally, Ulta Beauty’s loyalty program is yielding. Moreover, the company is focused on strengthening its omnichannel presence. In this respect, it is seeing growth in the usage of buy online and pick up in store facility. In fact, the company’s buy online and pick up in store facility along with e-commerce operations has been operational amid the coronavirus outbreak.

What the Zacks Model Unveils

Our proven model doesn’t predict an earnings beat for Ulta Beauty this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ulta Beauty carries a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -126.90%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Conagra Brands CAG has an Earnings ESP of +5.39% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General Corporation DG has an Earnings ESP of +6.69% and a Zacks Rank #2.

Campbell Soup CPB has an Earnings ESP of +12.17% and a Zacks Rank #3.

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Conagra Brands Inc. (CAG): Free Stock Analysis Report
 
Campbell Soup Company (CPB): Free Stock Analysis Report
 
Ulta Beauty Inc. (ULTA): Free Stock Analysis Report
 
Dollar General Corporation (DG): Free Stock Analysis Report
 
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