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3 Things to Watch in the Stock Market This Week

By Demitri Kalogeropoulos - Mar 5, 2017 at 1:32PM

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Keep an eye on Ulta Beauty, National Beverage, and Vail Resorts stocks over the next few trading days.

Stocks stayed firmly in rally mode last week, with both the Dow Jones Industrial Average (^DJI 2.68%) and the S&P 500 (^GSPC 3.06%) pushing past 6% gains so far on the year.

Earnings season is winding down, but there are still several big-name reports before investors move on completely to 2017. Some of the most anticipated announcements of the week include those from Ulta Beauty (ULTA 3.69%), Vail Resorts (MTN 3.06%), and National Beverage (FIZZ 4.33%). Let's take a look at the trends that could power stock-price swings for these businesses.

^DJI Chart

^DJI data by YCharts.

Ulta Beauty's customer traffic

Ulta Beauty shares are at record highs heading into Thursday's quarterly report. There's a good reason for that optimism on the part of investors: Ulta has raised its sales growth guidance four times over the last year.

A woman receiving a hair treatment at a spa.

Image source: Getty Images.

Three months ago, the retailer posted accelerating gains, as comparable-store sales soared by 17% to set a new record for the company. The growth was powered by a double-digit spike in customer traffic, coupled with a 6% boost in average spending per visit. E-commerce has also proven to be a solid growth channel for the company, with the expansion pace accelerating for the third-straight quarter to hit a 59% pace in early December.

CEO Mary Dillon and her executive team's upgraded forecast calls for comps to rise 13% at the midpoint of guidance this quarter, which would push full-year comps to about 14%. Their long-term target projects a slowdown to roughly 8% comps in 2017 through 2019, with fast-expanding profitability, but management could tweak that outlook on Thursday in response to the latest quarterly trends.

Vail Resorts' lodging demand

Mountain resort operator Vail is set to post fiscal second-quarter earnings numbers before the market opens on Friday. The company recently boosted its earnings forecast for the year after it booked solid results for the typically slow summer quarter. Despite no ski operations in the period, Vail enjoyed steady demand for lodging, dining, and warm-weather activities.

As of December, early ski season indicators were pointing in the right direction. Season-pass sales were up 20%, and lodging bookings were trending ahead of the prior-year period, even with the unseasonably warm November weather. Meanwhile, executives are optimistic about their recent acquisition of Whistler Blackcomb, the Canadian mountain property that's the most visited resort in North America. "We are thrilled about this transformative addition to Vail Resorts," CEO Rob Katz told investors after the transaction closed last quarter.

Including results from Whistler Blackcomb, Katz and his team expect to book adjusted earnings of between $567 million and $597 million. A significant shift in that forecast would likely send shares moving this week.

National Beverage's volume gains

Investors are expecting good news from carbonated beverage upstart National Beverage this week. The owner of popular sparkling water brands like La Croix and Shasta recently concluded its best six-month period on record, with revenue rising 15% and earnings spiking by 65%. Its 2016 fiscal year stood out in the industry, with volume spiking 9%, even as average selling prices rose. Beverage giants, meanwhile, struggled with volume gains of closer to 2%.

La Croix soda cans.

Image source: National Beverage.

National Beverage's drink innovations have fueled market-thumping growth over the last few years. The company is now aiming to apply that disruptive approach to its financial policy. In early November, executives announced plans to start a unique dividend program that rewarded shareholders based on the length of time they've owned the stock. Investors might get more details on the plan this week, but they'll be more interested to see evidence of market-share gains in the form of healthy volume growth.

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Stocks Mentioned

Ulta Beauty, Inc. Stock Quote
Ulta Beauty, Inc.
$410.54 (3.69%) $14.63
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$31,500.68 (2.68%) $823.32
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,911.74 (3.06%) $116.01
Vail Resorts, Inc. Stock Quote
Vail Resorts, Inc.
$232.34 (3.06%) $6.89
National Beverage Corp. Stock Quote
National Beverage Corp.
$48.64 (4.33%) $2.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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