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Sally Beauty (SBH) Queued for Q1 Earnings: What's in Store?

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Sally Beauty Holdings, Inc. (SBH - Free Report) is likely to register a decline in the top line, when it reports first-quarter fiscal 2021 numbers on Feb 4. The Zacks Consensus Estimate for revenues is pegged at $959.81 million, which indicates a decline of 2.1% from the prior-year quarter’s reported figure.

The company’s bottom line is expected to be in line with the year-ago quarter’s reported figure. The Zacks Consensus Estimate for fiscal first-quarter earnings has remained unchanged in the past 30 days at 47 cents per share. Notably, this international specialty retailer and distributor of professional beauty supplies has a trailing four-quarter negative earnings surprise of 42.3%, on average.

Sally Beauty Holdings, Inc. Price and EPS Surprise

 

Sally Beauty Holdings, Inc. Price and EPS Surprise

Sally Beauty Holdings, Inc. price-eps-surprise | Sally Beauty Holdings, Inc. Quote

 

Factors to Note

Sally Beauty has been bearing the brunt coronavirus-led hurdles like temporary closures and capacity restrictions in some regions. During its last earnings call, management highlighted that stores in some metropolitan areas like El Paso were only allowed to operate as curbside locations amid the pandemic. Also, it was seeing occupancy restrictions in parts of New Mexico and Colorado. Moreover, management noted that nearly 180 stores werefully closed due to pandemic-induced restrictions. We believe that such hurdles are likely to have had a negative impact on the company’s performance in the first quarter of fiscal 2021. Apart from these, the company is grappling with higher SG&A expenses. Also, adverse impacts of unfavorable foreign currency fluctuation are a threat.

Nevertheless, Sally Beauty is witnessing increased consumer demand on digital platforms amid pandemic-led restrictions. In this regard, the company is undertaking a number of efforts to enhance its digital space like augmenting its delivery options. Moreover, well-chalked endeavors such as focus on Transformation Plan, efforts to enhance customers’ experience and buyouts bode well.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Sally Beauty this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Sally Beauty carries a Zacks Rank #3 and an Earnings ESP of -1.87%.

Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Best Buy Co., Inc. (BBY - Free Report) currently has an Earnings ESP of +6.13% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores, Inc. (BURL - Free Report) currently has an Earnings ESP of +6.00% and a Zacks Rank of 3.

Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +4.01% and carries a Zacks Rank #3.

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