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Solid Growth Pillars Aid Sally Beauty (SBH), Soft Traffic a Woe
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Focus on strategic growth pillars, including customer-centric efforts, has been working well for Sally Beauty Holdings, Inc. (SBH - Free Report) . The beauty products provider is progressing well with Happy Beauty Co. Yet, Sally Beauty is not immune to tough macroeconomic challenges.
Let’s delve deeper.
Strategic Growth Efforts Drive Growth
Sally Beauty is focused on its three key strategic initiatives, which include enhancing customer centricity, growing high-margin-owned brands and carrying out innovations while increasing the efficiency of operations and optimizing its capabilities. Talking about innovation, the company has an impressive pipeline of innovation in the Sally Beauty segment. The company’s broad-based store optimization program helped in increasing productivity and profitability by delivering an engaging omnichannel experience for customers.
With regard to customer-centric efforts, the company is focused on acquiring new customers via marketing programs, differentiated product offerings and strategic initiatives. In the first quarter of fiscal 2024, the company generated 77% of sales from 16 million Sally U.S. and Canada loyalty members. Also, the BSG Rewards credit card purchases contributed 8% to sales.
Also, the Fuel for Growth initiative keeps Sally Beauty well-positioned to capture gross margin and SG&A gains while undertaking growth and returning shareholders’ value. Management is on track to capture pre-tax benefits of $20 million from the program in the fiscal 2024.
Image Source: Zacks Investment Research
Happy Beauty Holds Promise
Sally Beauty is progressing well with Happy Beauty Co., a unique new retail store concept that brings an engaging beauty experience to market with a value price point offering. Happy Beauty offers quality beauty at great prices in an accessible, fun and expressive environment. With a strong record of product and brand development, the company is exercising this muscle to bring compelling value alternatives to well-known premium-priced products to customers. At the same time, it will partner with smaller vendors who view this as a valuable opportunity to build visibility and drive growth for their brands.
At the end of the fiscal 2023, management had 10 pilot stores in operation, which delivered impressive results. The company continues to build awareness of Happy Beauty with marketing efforts and is optimistic about building a sizable store portfolio in the long run.
Hurdles on the Way
Sally Beauty continues to battle tough macroeconomic challenges that have been putting pressure on consumer spending. Management is battling soft customer traffic and inflationary pressures. Unfavorable impact owing to store closures from the Store Optimization Program has also been hurting the company for a while. These negative trends indicate challenges and difficulties faced by the company, which require strategic adjustments and efforts to turn the situation around.
The company’s focus on the upsides mentioned above is likely to keep aiding Sally Beauty’s growth story.
Shares of the Zacks Rank #3 (Hold) company have rallied 31.4% in the past three months compared with the industry’s 25.1% growth.
The Zacks Consensus Estimate for AEO’s current financial year sales and earnings indicates 5% and 45.4% growth, respectively, from the year-ago period’s reported levels. American Eagle has a trailing four-quarter earnings surprise of 23%, on average.
Abercrombie & Fitch (ANF - Free Report) , a specialty retailer of premium, high-quality casual apparel for men, women and kids, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Abercrombie’s current fiscal year sales indicates growth of 14.8% from the year-ago reported numbers. ANF has a trailing four-quarter earnings surprise of 713%, on average.
Deckers Outdoor Corporation (DECK - Free Report) is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 38.6% and 15.7%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter average earnings surprise of 32.1%.
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Solid Growth Pillars Aid Sally Beauty (SBH), Soft Traffic a Woe
Focus on strategic growth pillars, including customer-centric efforts, has been working well for Sally Beauty Holdings, Inc. (SBH - Free Report) . The beauty products provider is progressing well with Happy Beauty Co. Yet, Sally Beauty is not immune to tough macroeconomic challenges.
Let’s delve deeper.
Strategic Growth Efforts Drive Growth
Sally Beauty is focused on its three key strategic initiatives, which include enhancing customer centricity, growing high-margin-owned brands and carrying out innovations while increasing the efficiency of operations and optimizing its capabilities. Talking about innovation, the company has an impressive pipeline of innovation in the Sally Beauty segment. The company’s broad-based store optimization program helped in increasing productivity and profitability by delivering an engaging omnichannel experience for customers.
With regard to customer-centric efforts, the company is focused on acquiring new customers via marketing programs, differentiated product offerings and strategic initiatives. In the first quarter of fiscal 2024, the company generated 77% of sales from 16 million Sally U.S. and Canada loyalty members. Also, the BSG Rewards credit card purchases contributed 8% to sales.
Also, the Fuel for Growth initiative keeps Sally Beauty well-positioned to capture gross margin and SG&A gains while undertaking growth and returning shareholders’ value. Management is on track to capture pre-tax benefits of $20 million from the program in the fiscal 2024.
Image Source: Zacks Investment Research
Happy Beauty Holds Promise
Sally Beauty is progressing well with Happy Beauty Co., a unique new retail store concept that brings an engaging beauty experience to market with a value price point offering. Happy Beauty offers quality beauty at great prices in an accessible, fun and expressive environment. With a strong record of product and brand development, the company is exercising this muscle to bring compelling value alternatives to well-known premium-priced products to customers. At the same time, it will partner with smaller vendors who view this as a valuable opportunity to build visibility and drive growth for their brands.
At the end of the fiscal 2023, management had 10 pilot stores in operation, which delivered impressive results. The company continues to build awareness of Happy Beauty with marketing efforts and is optimistic about building a sizable store portfolio in the long run.
Hurdles on the Way
Sally Beauty continues to battle tough macroeconomic challenges that have been putting pressure on consumer spending. Management is battling soft customer traffic and inflationary pressures. Unfavorable impact owing to store closures from the Store Optimization Program has also been hurting the company for a while. These negative trends indicate challenges and difficulties faced by the company, which require strategic adjustments and efforts to turn the situation around.
The company’s focus on the upsides mentioned above is likely to keep aiding Sally Beauty’s growth story.
Shares of the Zacks Rank #3 (Hold) company have rallied 31.4% in the past three months compared with the industry’s 25.1% growth.
3 Key Retail Picks
American Eagle Outfitters (AEO - Free Report) , a specialty retailer of casual apparel, accessories and footwear, currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AEO’s current financial year sales and earnings indicates 5% and 45.4% growth, respectively, from the year-ago period’s reported levels. American Eagle has a trailing four-quarter earnings surprise of 23%, on average.
Abercrombie & Fitch (ANF - Free Report) , a specialty retailer of premium, high-quality casual apparel for men, women and kids, currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Abercrombie’s current fiscal year sales indicates growth of 14.8% from the year-ago reported numbers. ANF has a trailing four-quarter earnings surprise of 713%, on average.
Deckers Outdoor Corporation (DECK - Free Report) is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently sports a Zacks Rank #1.
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 38.6% and 15.7%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter average earnings surprise of 32.1%.