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Sally Beauty (SBH) Dull on Inflation & Soft Consumer Traffic
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Sally Beauty Holdings, Inc. (SBH - Free Report) appears in a tight spot thanks to macroeconomic headwinds like inflationary pressures. The beauty products provider continues to battle soft consumer traffic, which is putting pressure on the top line. Unfavorable currency rates remain a threat.
Let’s discuss this in detail.
Macroeconomic Headwinds Hurt Performance
Sally Beauty has been going through a challenging period for a while, facing a series of setbacks and declining performance in various key areas. Softness in consumer traffic and inflationary pressures continue to hurt the company’s fiscal fourth-quarter performance.
One of the most notable indicators of the company's struggles was its consolidated net sales, dropping 4.3% to $921.4 million in the fourth quarter of fiscal 2023. The downside reflects the company's difficulties in maintaining and growing its revenue streams. The company operated 308 fewer stores by the end of the quarter, which is an indication of a strategic shift or a response to changing market dynamics.
Breaking down the performance by segments, Sally Beauty Supply experienced a 5.3% fall, with segmental comparable sales dropping 1.2%. The segment’s performance was hurt by reduced traffic and inflationary pressures, which impacted consumer behavior. The Beauty Systems Group, another vital component of the company's operations, saw a 2.9% drop, with comparable sales falling 2.3%. These negative trends indicate significant challenges and difficulties faced by the company during this period, which require strategic adjustments and efforts to turn the situation around.
Unfavorable Currency Rates: A Concern
Sally Beauty’s international presence exposes it to the risk of adverse currency fluctuations. Unfavorable currency rates may adversely impact the company’s net revenues, operating income and earnings. The persistence of these factors is likely to keep hurting the company’s performance.
Shares of the Zacks Rank #4 (Sell) company have moved down 9.6% in the past year compared with the industry’s 4.8% decline.
Top-Ranked Retails Picks
Abercrombie & Fitch Co. (ANF - Free Report) is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1 (Strong Buy). ANF delivered a 60.5% earnings surprise in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal year sales implies growth of 13.3% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 713%.
The Gap, Inc. (GPS - Free Report) is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Gap’s current fiscal-year earnings indicates growth of 387.5% from the previous year’s reported figures. GPS has a trailing four-quarter average earnings surprise of 137.9%.
Deckers Outdoor Corporation (DECK - Free Report) is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Deckers’ current fiscal year earnings and sales indicates growth of 21.9% and 13.4%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter average earnings surprise of 26.3%.
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Sally Beauty (SBH) Dull on Inflation & Soft Consumer Traffic
Sally Beauty Holdings, Inc. (SBH - Free Report) appears in a tight spot thanks to macroeconomic headwinds like inflationary pressures. The beauty products provider continues to battle soft consumer traffic, which is putting pressure on the top line. Unfavorable currency rates remain a threat.
Let’s discuss this in detail.
Macroeconomic Headwinds Hurt Performance
Sally Beauty has been going through a challenging period for a while, facing a series of setbacks and declining performance in various key areas. Softness in consumer traffic and inflationary pressures continue to hurt the company’s fiscal fourth-quarter performance.
One of the most notable indicators of the company's struggles was its consolidated net sales, dropping 4.3% to $921.4 million in the fourth quarter of fiscal 2023. The downside reflects the company's difficulties in maintaining and growing its revenue streams. The company operated 308 fewer stores by the end of the quarter, which is an indication of a strategic shift or a response to changing market dynamics.
Breaking down the performance by segments, Sally Beauty Supply experienced a 5.3% fall, with segmental comparable sales dropping 1.2%. The segment’s performance was hurt by reduced traffic and inflationary pressures, which impacted consumer behavior. The Beauty Systems Group, another vital component of the company's operations, saw a 2.9% drop, with comparable sales falling 2.3%. These negative trends indicate significant challenges and difficulties faced by the company during this period, which require strategic adjustments and efforts to turn the situation around.
Unfavorable Currency Rates: A Concern
Sally Beauty’s international presence exposes it to the risk of adverse currency fluctuations. Unfavorable currency rates may adversely impact the company’s net revenues, operating income and earnings. The persistence of these factors is likely to keep hurting the company’s performance.
Shares of the Zacks Rank #4 (Sell) company have moved down 9.6% in the past year compared with the industry’s 4.8% decline.
Top-Ranked Retails Picks
Abercrombie & Fitch Co. (ANF - Free Report) is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1 (Strong Buy). ANF delivered a 60.5% earnings surprise in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal year sales implies growth of 13.3% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 713%.
The Gap, Inc. (GPS - Free Report) is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Gap’s current fiscal-year earnings indicates growth of 387.5% from the previous year’s reported figures. GPS has a trailing four-quarter average earnings surprise of 137.9%.
Deckers Outdoor Corporation (DECK - Free Report) is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Deckers’ current fiscal year earnings and sales indicates growth of 21.9% and 13.4%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter average earnings surprise of 26.3%.