Ulta Stock: 65% Chance of A Post-Earnings Drop?

Core Insights - Ulta Beauty is expected to report fiscal Q2 results on August 28, 2025, with analysts forecasting earnings of $4.98 per share and revenue of $2.66 billion, reflecting a 6% decline in earnings year-over-year and a 4% increase in sales compared to the previous year [2] - Historically, Ulta's stock has dropped post-earnings announcements 65% of the time, with a median one-day decline of 3.5% and a maximum drop of 13% [2] Financial Performance - In Q1, Ulta demonstrated strong performance with solid growth, stable margins, and an EPS exceedance, supported by the "Unleashed" strategy and robust consumer demand in wellness and fragrance [3] - The company has a market capitalization of $23 billion, with $11 billion in revenue over the past twelve months, $1.6 billion in operating profits, and net income of $1.2 billion [3] Historical Earnings Trends - Over the last five years, Ulta has recorded 20 earnings data points, with 9 positive and 11 negative one-day returns, resulting in positive returns approximately 45% of the time [6] - This percentage increases to 50% when examining the last three years, with a median positive return of 9.0% and a median negative return of -3.5% [6] Trading Strategies - Event-driven traders can leverage historical trends to position themselves ahead of earnings or respond to market movements post-release [4] - A lower-risk strategy involves understanding the correlation between short-term and medium-term returns following earnings, allowing traders to position themselves accordingly based on 1D and 5D return correlations [7]