Ulta Beauty, Inc. ULTA is likely to register top and bottom-line declines when it reports fourth-quarter fiscal 2024 earnings on March 13, after market close. The consensus mark for quarterly earnings has decreased by a penny in the past 30 days to $7.05 per share, indicating a 12.8% dip from the figure reported in the year-ago quarter. The consensus mark for fiscal 2024 earnings is pegged at $23.93 per share, implying a decline of 8.1% from the prior year’s reported figure. ULTA delivered a trailing four-quarter earnings surprise of 6.2%, on average.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for revenues is pegged at $3.46 billion, suggesting a 2.8% decrease from the prior-year quarter’s reported figure. The consensus mark for fiscal 2024 top line is pegged at $11.26 billion, which indicates an increase of 0.5% from the year-ago reported level.

Factors Likely to Influence ULTA’s Upcoming Results

Ulta Beauty is facing challenges as shifting consumer behavior toward value-driven spending. Increasing competition from emerging beauty distribution channels has been putting pressure on its market share. 

The company has been battling rising costs, which continue to put pressure on its margin performance. In this regard, higher store payroll and benefits costs, coupled with increased corporate overhead from strategic investments, are headwinds. We expect a SG&A expense increase of 0.6% for the fourth quarter, with the rate coming in at 24.4%, up 130 basis points (bps).

Ulta Beauty Inc. Price, Consensus and EPS Surprise

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

Ulta Beauty’s gross margin is likely to have remained under pressure. On the last earnings call, the company stated that it expects gross margin deleverage in the fiscal fourth quarter, with fixed costs, promotional activity and category mix shifts likely to have further weighed on profitability. Our model anticipates a gross margin contraction of 130 bps in the to-be-reported quarter.

Yet, investments in product assortment, digital engagement, social relevance and its industry-leading loyalty program are likely to have supported customer retention and brand appeal.

Earnings Whispers for ULTA

Our proven model does not conclusively predict 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 not the case here.

Ulta Beauty carries a Zacks Rank #3 and has an Earnings ESP of -3.51%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the correct combination to beat earnings this time.

Five Below, Inc. FIVE has an Earnings ESP of +1.45% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

FIVE is likely to register top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.4 billion, indicating 3.1% growth from the figure reported in the year-ago quarter. 

The consensus estimate for Five Below’s fiscal fourth-quarter earnings is pegged at $3.35 per share, implying an 8.2% decline from the figure reported in the year-ago quarter. FIVE delivered an average earnings surprise of 39% in the trailing four quarters.

Dollar General Corporation DG currently has an Earnings ESP of +1.08% and a Zacks Rank of 3. The company's top line is anticipated to have increased year over year when it reports fourth-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $10.3 billion, which indicates a 4.1% increase from the figure reported in the year-ago quarter. 

The company is expected to register a decline in the bottom line. The consensus estimate for Dollar General’s fourth-quarter earnings is pegged at $1.49 per share, down 18.6% from the year-ago quarter.

DICK'S Sporting Goods, Inc. DKS presently has an Earnings ESP of +1.91% and a Zacks Rank of 2. The company's top line is anticipated to have decreased year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.8 billion, which indicates a 3% decrease from the figure reported in the year-ago quarter. 

The company is expected to register a decline in the bottom line. The consensus estimate for DICK'S Sporting Goods’ fourth-quarter earnings is pegged at $3.49 per share, down 9.4% from the year-ago quarter. DKS delivered a trailing four-quarter earnings surprise of 11.4%, on average.

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Dollar General Corporation (DG) : Free Stock Analysis Report

DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report

Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report

Five Below, Inc. (FIVE) : Free Stock Analysis Report

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

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