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Sally Beauty (SBH) to Post Q4 Earnings: Key Aspects to Note

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Sally Beauty Holdings, Inc. (SBH - Free Report) is likely to register top-line growth when it reports fourth-quarter fiscal 2021 numbers on Nov 11, before the opening bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $971.7 million, indicating a rise of 1.5% from the prior-year quarter’s reported figure.

The company’s bottom line is likely to reflect a decline in the fourth quarter. The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at 50 cents per share, which suggests a decline of 20.6% from the year-ago quarter’s reported number. The consensus mark has remained stable in the past 30 days. The international specialty retailer and distributor of professional beauty supplies has a trailing four-quarter earnings surprise of 83.9%, on average.

Key Aspects to Note

Sally Beauty’s fourth-quarter performance is likely to have gained from growth in the company’s e-commerce channel. Its online business has been gaining from focus on digital capabilities as well as the implementation of strategic initiatives around fulfillment and customer engagement. In this context, the company’s Buy Online, Pick Up In-Store (BOPIS) services have been doing well. The company’s partnership with salesforce.com for the implementation of cloud-based enhancements to augment shopping experience of salon professionals and beauty enthusiasts has been yielding.

Sally Beauty’s focus on Transformation Plans, including efforts to enhance customers’ experience and enhancing retail fundamentals bodes well. Strategic buyouts have been helping the company strengthen its portfolio.

The aforementioned upsides are likely to have favorably impacted the company’s top line during the quarter in review.  In its last earnings call, management stated that fourth-quarter net sales are likely to be flat to up 2% year over year.

Sally Beauty’s performance in the fourth quarter is likely to have been affected by higher selling, general and administrative (SG&A) expenses. In its last earnings call, management highlighted that SG&A expenses are likely to rise in the fourth quarter because of incremental operating expenses incurred across international territories, which have reopened. Supply chain disruptions and other pandemic-led headwinds are a concern for Sally Beauty.

Sally Beauty Holdings, Inc. Price, Consensus and EPS Surprise

 

Sally Beauty Holdings, Inc. Price, Consensus and EPS Surprise

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

 

What the Zacks Model Unveils

Our proven model does not 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 has a Zacks Rank #4 (Sell) and an Earnings ESP of +9.09%.

Stocks With Favorable Combination

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

United Natural Foods (UNFI - Free Report) currently has an Earnings ESP of +9.24% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hormel Foods (HRL - Free Report) currently has an Earnings ESP of +1.59% and is Zacks #3 Ranked.

Kraft Heinz (KHC - Free Report) currently has an Earnings ESP of +0.79% and a Zacks Rank of 3.