Sally Beauty Holdings, Inc. SBH is likely to register top-line decline when it reports second-quarter fiscal 2025 earnings on May 12. The Zacks Consensus Estimate for revenues is pegged at $901.1 million, suggesting a decrease of 0.8% from the prior-year quarter's level.

Nevertheless, the company is expected to witness a year-over-year increase in its bottom line. The Zacks Consensus Estimate, which has been stable over the past 30 days at 39 cents a share, calls for 11.4% growth compared to the prior year. Sally Beauty has a trailing four-quarter earnings surprise of 1.6%, on average. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

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

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

Things to Know Ahead of SBH’s Q2 Earnings

Sally Beauty has been grappling with macroeconomic challenges, including ongoing volatility in consumer confidence and spending patterns, particularly among mid-to-lower income segments. Consumers have become more selective with discretionary purchases, leading to uneven traffic trends. In its last earnings call, management highlighted that it saw a choppy start to the fiscal second quarter, pointing to flu season, severe weather and geopolitical uncertainties impacting demand.

Sally Beauty has been facing persistent challenges due to rising selling, general & administrative expenses. Notably, increased labor costs, higher compensation-related expenses and growing advertising expenditures are putting pressure on the company's profitability. In addition, the company’s international operations make it vulnerable to unfavorable currency fluctuations.

In the fiscal second quarter, the company forecasts flat year-over-year comparable sales. Consolidated net sales are likely to have been about 100 basis points lower than comparable sales, indicating the anticipated unfavorable impact of foreign exchange rates. The adjusted operating margin is forecasted in the range of 8% to 8.3%.

That being said, Sally Beauty continues to make significant progress with its core strategic initiatives aimed at driving growth. Key focus areas include enhancing customer centricity, expanding high-margin owned brands, fostering innovation and improving operational efficiency. The company's ongoing store refresh program is showing promising results, contributing positively. In addition, the Fuel for Growth program is expected to have supported fiscal second-quarter profits by enhancing cost efficiency and driving margin expansion.

Story Continues

Earnings Whispers for SBH Stock

Our proven model doesn’t conclusively predict an earnings beat for Sally Beauty this time. 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, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Sally Beauty currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.

Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Under Armour, Inc. UAA has an Earnings ESP of +20.75% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Under Armour’s fourth-quarter fiscal 2025 earnings is pegged at a loss of 9 cents per share, implying a decline of 181.8% from the year-ago quarter. The consensus mark for earnings has been unchanged in the past 30 days. For Under Armour’s quarterly revenues, the consensus mark is pegged at $1.2 billion, which indicates a decrease of 13.1% from the year-ago quarter. UAA delivered an earnings surprise of 166.7% in the last quarter.

Ralph Lauren RL currently has an Earnings ESP of +2.21% and a Zacks Rank of 3. RL is likely to register a top-line increase when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.6 billion, indicating a 4.1% rise from the figure reported in the prior-year quarter.

The consensus estimate for Ralph Lauren’s earnings is pegged at $1.96 per share, implying a 14.6% jump from the year-ago quarter. The consensus mark for earnings has moved up by 1% in the past 30 days. RL delivered an earnings surprise of 6.5% in the last quarter.

Dollar General Corporation DG currently has an Earnings ESP of +0.99% and a Zacks Rank #3. The Zacks Consensus Estimate for DG’s first-quarter fiscal 2025 earnings per share is pegged at $1.46, suggesting an 11.5% year-over-year decline. 

Dollar General’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $10.25 billion, which indicates an increase of 3.4% from the figure reported in the prior-year quarter. Dollar General has a trailing four-quarter earnings surprise of 1.2%, on average.

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