Sally Beauty Holdings Earnings: Here’s Why Investors are Not Happy Now

Sally Beauty Holdings Inc. (NYSE:SBH) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 8.54%.

Sally Beauty Holdings Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 10.53% to $0.42 in the quarter versus EPS of $0.38 in the year-earlier quarter.

Revenue: Rose 2.83% to $912.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sally Beauty Holdings Inc. reported adjusted EPS income of $0.42 per share. By that measure, the company missed the mean analyst estimate of $0.43. It missed the average revenue estimate of $927.48 million.

Quoting Management: “Our fundamental business drivers are solid and we remain confident in the long term health of our business,” stated Gary Winterhalter, Chairman, President and Chief Executive Officer. “During the third quarter, customer traffic at our BSG and Sally International businesses was healthy; however, store traffic from the non-Beauty Club Card customer in the Sally U.S. business was soft. We’ve launched several initiatives specifically to address this customer and remain optimistic that traffic will recover over the next few months. On a consolidated basis, we improved SG&A leverage by 50 basis points and grew earnings per share by 13.5%. During the third quarter, we purchased $94 million or 3.1 million shares of our stock. As of the end of June we had $559 million remaining on our current authorization.”

Key Stats (on next page)…

Revenue increased 1.54% from $898.24 million in the previous quarter. EPS increased 16.67% from $0.36 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.42 and has not changed. For the current year, the average estimate is a profit of $1.53, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)