2 Consumer-Centric Stocks to Consider as Earnings Approach: OLLI, ULTA

Ollie's Bargain Outlet (OLLI) and Ulta Beauty (ULTA), two consumer-centric stocks, are approaching their Q2 earnings reports on August 28, both trading near 52-week highs with Zacks Rank #2 (Buy) ratings. Ollie's is projected to see strong Q2 sales and EPS growth of 14% and 16% respectively, driven by steady expansion, while Ulta anticipates a 4% sales increase, with potential to exceed its modest Q2 EPS expectations despite a projected 5% dip, benefiting from product line revamps. Both companies have experienced positive full-year EPS estimate revisions for FY26 and FY27, positioning them as momentum plays with potential for further upside if their Q2 results meet or surpass current forecasts.

Analysis

Ollie's Bargain Outlet (OLLI) and Ulta Beauty (ULTA) are positioned with significant positive momentum heading into their Q2 earnings reports on August 28, with both stocks trading near 52-week highs and holding Zacks Rank #2 (Buy) ratings. Ollie's growth is underpinned by its physical store expansion, with analysts forecasting strong Q2 results including a 14% year-over-year sales increase to $662.68 million and a 16% spike in EPS to $0.91. This is supported by a history of meeting or exceeding EPS estimates and positive full-year earnings revisions projecting 14% annual growth for both FY26 and FY27. Ulta, benefiting from a revamped product line, presents a more nuanced picture. While Q2 sales are projected to grow a modest 4% to $2.65 billion and EPS is expected to dip 5% to $5.03, the Zacks ESP suggests a comfortable beat is likely, with the most accurate estimate at $5.13. This potential for an upside surprise is reinforced by Ulta's impressive average earnings surprise of 11.88% over the last four quarters. Despite a projected 7% annual earnings dip in its current fiscal year (FY26), estimates have been revised upwards by over 1% in the last 60 days, and a 9% EPS rebound is forecasted for FY27. The market has rewarded both, with Ulta surging over 25% and Ollie's over 15% in the last three months, setting a high bar for their upcoming announcements.

Key Decisions for Investors

• Given the strong positive momentum and recent stock appreciation of over 15% for OLLI and 25% for ULTA, investors should recognize that high expectations are already priced in ahead of the Q2 earnings release.
• For Ollie's, the key metric to watch is the confirmation of its double-digit growth, as meeting or exceeding the forecasted 14% sales and 16% EPS increase is critical to sustaining its current valuation.
• Investors in Ulta should focus on whether the company can significantly beat the -5% EPS expectation, as a strong upside surprise, hinted at by the Zacks ESP and historical performance, could be a primary catalyst for further gains.
• Beyond the Q2 results, any forward-looking guidance will be crucial, particularly for Ulta, to validate analyst expectations of a 9% earnings rebound in FY27, which underpins the long-term bullish case.