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3 Things to Watch in the Stock Market This Week

Stocks gained more than a full percentage point in abbreviated trading last week in a rally that pushed the Dow Jones Industrial Average (DJINDICES:^DJI) to a near-10% gain for the year while the S&P 500 (SNPINDEX:^GSPC) lagged slightly with its 8% increase.

The week ahead could bring volatility for shareholders in Ulta Beauty (NASDAQ:ULTA), Big Lots (NYSE:BIG), and Guess (NYSE:GES) as each company is set to post fresh earnings reports over the next five trading days.

Ulta's customer traffic

Investors are expecting good news from beauty retailer Ulta on Thursday. The company recently raised its growth forecast to between 14% and 15% -- from the 11% to 13% prior projection. If it hits the top end of that guidance, Ulta will have booked a record growth pace in two of the last three quarters.

The key to its market-beating expansion has been impressive customer traffic gains. Ulta last quarter enjoyed a 10% boost in visitors to mark just a tiny decrease from the prior quarter's 11% spike. A surging e-commerce business is helping as well, given that online sales were up 55%.

Image source: Getty Images.

CEO Mary Dillon and her executive team believe they can boost earnings by over 20% in each of the next three fiscal years. The company also just raised its long-term comparable-store sales forecast to 8% from 6%, which implies that executives see the current industry upswing lasting at least through 2019. Sure, the stock has responded to that improving outlook by rising more than 25% over the past six months. But the rally is likely to continue if Ulta keeps soaking up market share in the...


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