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Kroger, Ulta earnings — What to know in markets Thursday

Heidi Chung
Reporter

Grocery giant Kroger (KR) and beauty retailer Ulta (ULTA) earnings will be in focus Thursday.

Kroger will report third-quarter earnings ahead of the opening bell. Analysts aren’t expecting too many surprises, as Kroger’s management reiterated guidance just a month ago. Nevertheless, identical-store sales, more commonly known as same-store sales, and gross margins will be closely watched.

Analysts polled by Bloomberg expect Kroger to report third-quarter adjusted earnings of 49 cents per share on $28.18 billion in revenue. Identical-store sales excluding fuel are estimated to have risen 2.3% during the quarter.

Kroger previously forecast that it expects full-year same-store sales between 2% to 2.5%, so its third quarter results will have to show solid growth to achieve that goal. The grocery chain’s continued space-optimization efforts will likely have fueled sustainable sales increases. Meanwhile, on the e-commerce front, Kroger’s click-and-collect service, Clicklist, is expected to help online sale growth.

Shares of Kroger have risen 2.2% this year and have massively underperformed the broader market, which has jumped 26% in the same time period. The options market is implying a 5.6% move in either direction for the stock following the announcement.

Kylie Cosmetics are displayed at Ulta beauty on November 18, 2019 in New York City. (Photo by David Dee Delgado/Getty Images)

Beauty retailer Ulta is scheduled to report earnings after the market close.

Within the beauty industry, recent trends have shown that consumers are purchasing more skincare products than traditional color products. That shift within the industry has meant tough times for Ulta. The stock is down 2% this year, even as the broader market rose 26%. Management alluded to challenges in the color category during the second-quarter earnings call on August 29.

After seeing a meaningful boost to sales in previous quarter due to partnerships with celebrities like Kyle Jenner, innovation at Ulta has softened. Investors and analysts will be expecting to hear updates from management on what its strategy is going forward to boost traffic and sales to its stores.

Analysts are predicting Ulta will report adjusted earnings of $2.13 per share on $1.69 billion in revenue.

Other notable earnings reports scheduled for Thursday include Dollar General (DG), Tiffany & Co (TIF) before market open; Zoom Video Communications (ZM) after market close.

On the economic calendar for Thursday, investors can expect the following: Initial Jobless Claims, November 30 (215,000 expected, 213,000 prior); Continuing Claims, week ended November 23 (1.661 million expected, 1.640 prior); Trade Balance, October (-$48.7 billion expected, -$52.5 billion in September); Bloomberg Consumer Comfort, week ended December 1 (60.5 prior); Factory Orders, October (0.3% expected, -0.6% in September); Durable Goods Orders, October final (0.6% prior); Durables excluding Transportation, October final (0.6% prior); Capital Goods Orders Nondefense excluding Air, October final (1.2% prior)

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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