Things to Consider Ahead of Sally Beauty's (SBH) Q4 Results

Sally Beauty Holdings, Inc. SBH is expected to see a year-over-year decline in its revenue and net income when it reports its fourth-quarter fiscal 2022 results on November 10. The Zacks Consensus Estimate for quarterly earnings is pegged at $943.9 million, indicating a decline of 4.7. % compared to the published figure for the previous year’s quarter. For fiscal 2022, the company’s revenue is pegged at $3,797 million, indicating a 2% decline from last year’s level.

The Zacks Consensus Estimate for quarterly earnings has declined a penny over the past 30 days to 48 cents per share, indicating a 25% decline from the figure reported in the year-ago quarter. Consensus for fiscal 2022 earnings is set at $2.13 per share, projecting an 11.3% decline from the reported figure for the year-ago period.

The international specialty retailer and distributor of professional beauty products posted a surprise profit of 4.6% on average over the last four quarters. In the most recently reported quarter, Sally Beauty reported a negative earnings surprise of 6.8%.

Sally Beauty Holdings, Inc. Price and EPS Surprise

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

Things to consider

Sally Beauty has been battling growing inflationary pressure for some time now. The company is also facing pressure from supply chain issues. Due to its exposure to international markets, SBH is vulnerable to currency fluctuations. Management expects net sales to decline nearly 2% year-over-year for fiscal 2022, including an unfavorable foreign exchange impact of approximately 70 basis points (bps).

Apart from this, Sally Beauty has been struggling with increasing selling, general and administrative expenses for some time. The persistence of such trends likely put pressure on the company’s performance in the fourth quarter of fiscal 2022.

That being said, focusing on the strategic pillars of growth, including leveraging the digital platform, product innovation and supply chain improvement, is a pause. For fiscal 2022, adjusted gross margin is expected to increase nearly 50 basis points year-over-year. Adjusted operating margin is expected to be approximately 10.5%.

What the Zacks Model Reveals

Our proven model does not conclusively predict that Sally Beauty’s profits will be higher 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 beating earnings. You can discover the best stocks to buy or sell before they’re released with our Earnings ESP filter.

Sally Beauty has a Zacks Rank #4 (Sell) and an Earnings ESP of +5.88%.

Some actions with favorable combinations

Here are some companies you may want to consider, as our model shows they have the right combination of elements to post better profits.

Ross Stores ROST currently has an Earnings ESP of +2.95% and a Zacks Rank of 2. The company is likely to see a decline in its revenue and net income when it reports its third-quarter earnings results. The consensus mark for ROST’s quarterly revenue is set at $4.36 billion, suggesting a 4.7% decline from the figure reported in the year-ago quarter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ross Stores’ earnings has increased by a penny to 81 per share over the past seven days. However, the consensus estimate indicates a 25.7% decline from $1.09 reported in the year-ago quarter. ROST has a four-quarter earnings surprise of 14.1% on average.

DICK’S sporting goods DKS currently has an Earnings ESP of +17.23% and a Zacks Rank of 2. The company is likely to see a decline in its earnings and bottom line when it reports third-quarter fiscal 2022 numbers. The consensus for DKS’s quarterly earnings has increased 1.4% over the past 30 days to $2.24 per share. However, the consensus estimate suggests a 29.8% decline from the reported figure for the year-ago quarter.

The Zacks Consensus Estimate for DICK’s quarterly revenue is pegged at $2.7 billion, suggesting a 1.7% decline from the figure reported in the year-ago quarter. DKS has posted earnings surprises over the last four quarters of 21.4% on average.

Dollar tree DLTR currently has an Earnings ESP of +6.57% and a Zacks Rank of 3. The company is likely to report growth in its top and bottom line when it reports its third quarter earnings results. ‘fiscal year 2022. The consensus mark for DLTR’s quarterly revenue is set at $6.83 billion, suggesting growth of 6.5% from the figure reported for the year-ago quarter.

The consensus for DLTR’s quarterly earnings has remained unchanged over the past 30 days at $1.16 per share. The consensus estimate suggests growth of 20.8% from last year’s quarter. DLTR has a trailing four-quarter earnings surprise of 8.6% on average.

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