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Sally Beauty (SBH) Q3 Earnings in the Cards: Things to Note

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Sally Beauty Holdings, Inc. (SBH - Free Report) is likely to see a bottom-line decline when it reports third-quarter fiscal 2024 earnings on Aug 8. The Zacks Consensus Estimate for quarterly earnings has moved down by a cent in the past 30 days to 40 cents per share. The figure slumped 18.4% from the year-ago quarter’s reported figure.

The company’s top line is likely to increase year over year. The consensus mark for quarterly revenues is pegged at $931.4 million, indicating a slight increase from the prior-year quarter’s reported figure.

The international specialty retailer and distributor of professional beauty supplies has a trailing four-quarter negative earnings surprise of 2.7%, on average.

Things To Note

SBH has been navigating a challenging macroeconomic climate that is affecting consumer spending. The company is experiencing a decline in customer traffic. Inflationary pressures are further compounding the issue. Also, the unfavorable impact owing to store closures from the Store Optimization Program has been hurting the company for a while. The persistence of these factors is likely to have hurt the company’s performance in the to-be-reported quarter. 

For third-quarter fiscal 2024, management projects net sales and comparable sales between a 1% decline and a 1% increase. The company expects a sequential decline in the gross margin rate for the to-be-reported quarter. SBH expects the third-quarter adjusted operating margin to be in the range of 8-8.5%.

Despite these challenges, Sally Beauty is making progress with its strategic initiatives, including product innovation, expanded distribution and the introduction of new concepts and services. Its focus on the Fuel for Growth initiative is aiding growth.

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

 

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 carries a Zacks Rank #3 and has an Earnings ESP of +5.00%.

More Stocks With the Favorable Combination

Here are three other companies worth considering, as our model shows that these also have the correct combination to beat on earnings this time:

Vital Farms (VITL - Free Report) has an Earnings ESP of +1.18% and currently flaunts a Zacks Rank #1. VITL is anticipated to register top- and bottom-line growth when it reports second-quarter 2024 results. The Zacks Consensus Estimate for VITL’s quarterly revenues is pegged at $143.8 million, indicating growth of 35% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Vital Farms’ earnings has moved down by a penny in the past 30 days to 21 cents. The consensus estimate suggests 40% growth from the prior-year quarter’s reported figure. VITL has delivered an earnings surprise of 102.1%, on average, in the trailing four quarters.

Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +0.63% and a Zacks Rank of 3. The company is expected to register top- and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80 billion, suggesting growth of 1.3% from the year-ago quarter’s reported figure.

The consensus estimate for Costco’s earnings has increased by a penny in the past 30 days to $5.02. The consensus mark for earnings suggests growth of 3.3% from the year-ago quarter’s reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.

Coty (COTY - Free Report) has an Earnings ESP of +22.73% and a Zacks Rank of 3 at present. The company is expected to register top- and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly earnings has remained unchanged in the past 30 days at 5 cents. The consensus mark for earnings indicates a 400% surge from the figure reported in the year-ago quarter. 

The consensus estimate for quarterly revenues is pegged at $1.38 billion, indicating a rise of 1.8% from the figure reported in the year-ago quarter. COTY delivered a trailing four-quarter average negative earnings surprise of 22.2%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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