Sally Beauty Q3 sales fall 1% but beat estimates

Overview

• Sally Beauty Q3 net sales fall 1% but beat analyst expectations, per LSEG data

• Adjusted EPS rises 13% to $0.51, surpassing analyst estimates, per LSEG data

• Co raises full-year adjusted operating margin guidance

Outlook

• Sally Beauty raises full-year adjusted operating margin to 8.6%-8.7%

• Company expects full-year comparable sales to be approximately flat

• Sally Beauty anticipates 75 basis points drop in net sales due to FX impact

Result Drivers

• FUEL FOR GROWTH - Initiative contributed to operating margin expansion and double-digit EPS growth

• MACRO UNCERTAINTY - Consumer spending impacted by macroeconomic uncertainty, partially offset by growth in hair color and digital marketplaces

• COST MANAGEMENT - Higher product margins, lower distribution and freight costs, and reduced shrink expenses supported gross margin expansion

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the miscellaneous specialty retailers peer group is "buy."

• Wall Street's median 12-month price target for Sally Beauty Holdings Inc is $12.00, about 16.9% above its August 4 closing price of $9.97

• The stock recently traded at 5 times the next 12-month earnings vs. a P/E of 4 three months ago

Press Release: ID:nBw92wm6xa