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Momentum

Sally Beauty Holdings, Inc. (SBH - Snapshot Report) just spiked into a new all-time high after reporting another strong quarter that came in ahead of expectations. Estimates have since jumped higher, providing more momentum for this Zacks #1 Rank stock.

Company Description

Sally Beauty Holdings, Inc., with its subsidiaries, engages in the distribution and retail of professional beauty supplies. The company was founded in 1964 and has a market cap of $3.5 billion.

Sally Beauty has seen big gains in 2011, recently jumping into a new all-time high after reporting strong Q3 results that came in ahead of expectations.

Third-Quarter Results

Revenue for the period was up 12% from last year to $837 million. Earnings also came in strong at 29 cents, 4% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 10% over the last four quarters.

The good quarter was driven by strong same-store sales, up 5.6% from last year's 5.3%. Gross margin was also up 40 basis points to 49.3%.

Financial Profile

Sally has used its recent earnings momentum to strengthen its financial profile, with cash and short-term investments up $4 million to $63.5 million while total debt fell $150 million to $1.4 billion.

Estimates

We saw some decent movement in estimates off the good quarter, with the current year up 4 cents to $1.27 while the next-year estimate added 2 cents to $1.46, a bullish 15% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks solid, with a PEG ratio of 1 in line with the benchmark for value.

12-Month Chart

On the chart, SBH jumped into a new all-time high on the good quarter. Look for support from the trend line on any weakness. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

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