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Sally Beauty (SBH) Queued for Q3 Earnings: What's in Store?

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Sally Beauty Holdings, Inc. (SBH - Free Report) is likely to register growth in the top and bottom lines when it reports third-quarter fiscal 2021 numbers on Jul 29.

The Zacks Consensus Estimate for quarterly earnings, which has been unchanged in the past 30 days at 62 cents per share, suggests significant improvement from a loss of 11 cents reported in the year-ago period. The international specialty retailer and distributor of professional beauty supplies has a trailing four-quarter earnings surprise of 37.8%, on average. In the last reported quarter, the company’s bottom line significantly outperformed the Zacks Consensus Estimate.

The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $979.7 million, which suggests growth of almost 39% from the figure reported in the prior-year quarter.

Things to Note

Sally Beauty has been witnessing increased consumer demand on digital platforms. The company has been undertaking a number of efforts to enhance the online business like augmenting delivery options. Sally Beauty’s focus on Transformation Plan, efforts to enhance customers’ experience and buyouts bode well.

On second-quarter fiscal 2021 earnings call, management highlighted that it expects to see year-over-year sales growth for the fiscal third quarter, reflecting easy comparisons, as the year-ago quarter was severely affected by pandemic-inflicted store closures globally. The company expects net sales growth in the range of 35-40% for the to-be-reported quarter on the back of solid consumer demand in the United States. This is likely to have been somewhat countered by the pandemic-led softness in international markets.

Higher SG&A expenses including COVID-related net expenses have also been a concern for Sally Beauty.

What the Zacks Model Unveils

Our proven model predicts 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 currently carries a Zacks Rank #2 and has an Earnings ESP of +1.34%.

Other Stocks With Favorable Combinations

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Ulta Beauty, Inc. (ULTA - Free Report) currently has an Earnings ESP of +7.01% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICK’S Sporting Goods, Inc. (DKS - Free Report) currently has an Earnings ESP of +12.14% and sports a Zacks Rank #1.

Foot Locker, Inc. (FL - Free Report) currently has an Earnings ESP of +7.06% and a Zacks Rank of 2.