Sally Beauty Gears Up for Q4 Earnings: What to Expect From the Stock?

Sally Beauty Holdings, Inc. (SBH) is likely to register a top and bottom line decline when it reports fourth-quarter fiscal 2025 earnings on Nov. 13. The Zacks Consensus Estimate for revenues is pegged at $933 million, indicating a decrease of 0.2% from the prior-year quarter's level.

The consensus estimate for earnings has been stable over the past 30 days at 49 cents a share, which calls for 2% decline compared with the prior-year quarter's level. Sally Beauty delivered a trailing four-quarter earnings surprise of 8.3%, on average.

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

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

Things to Know Ahead of SBH’s Q4 Earnings

Sally Beauty has been experiencing macroeconomic challenges that are weighing on its discretionary spending, particularly among value-conscious consumers. Customers have been increasingly “choiceful” in their purchasing behavior, focusing on value and trading down on price-sensitive categories. The persistence of cautious consumer behavior and uneven category performance is likely to have constrained overall sales momentum in the fiscal fourth quarter.

At the same time, the company has been facing profitability pressures due to planned cost increases. On its last earnings call, management indicated that adjusted operating margin is likely to have declined modestly in the fiscal fourth quarter, reflecting higher marketing investments to support the Sally brand refresh in Orlando.

However, Sally Beauty has been making meaningful progress with its core strategic initiatives aimed at driving sustainable, long-term growth. The company has been focusing on deepening customer connections, expanding high-margin owned brands, fostering innovation and improving operational efficiency. These efforts are designed to offer a cushion amid the aforementioned headwinds.

Earnings Whispers for SBH Stock

Our proven model does not 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.

Sally Beauty currently carries a Zacks Rank #3 and has an Earnings ESP of -1.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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.

Ulta Beauty, Inc. (ULTA) has an Earnings ESP of +0.24% 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 Ulta Beauty’s third-quarter fiscal 2025 earnings is pegged at $4.47 per share, implying a decline of 13% from the year-ago quarter. For Ulta Beauty’s quarterly revenues, the consensus mark is pegged at $2.7 billion, which indicates an increase of 7.1% from the year-ago quarter. ULTA delivered a trailing four-quarter earnings surprise of 16.3%, on average.

Five Below, Inc. (FIVE) currently has an Earnings ESP of +74.71% and a Zacks Rank of 2. FIVE is likely to register a top-line increase when it reports third-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $969.9 million, indicating a 15% rise from the figure reported in the prior-year quarter.

The consensus estimate for Five Below’s earnings is pegged at 22 cents per share, implying a 47.6% decline from the year-ago quarter. FIVE delivered a trailing four-quarter earnings surprise of 50.5%, on average.

Dollar General Corporation (DG) currently has an Earnings ESP of +12.31% and a Zacks Rank #2. The Zacks Consensus Estimate for DG’s third-quarter fiscal 2025 earnings per share is pegged at 95 cents, implying 6.7% year-over-year growth.

The Zacks Consensus Estimate for quarterly revenues is pegged at $10.62 billion, which indicates an increase of 4.3% from the figure reported in the prior-year quarter. Dollar General delivered a trailing four-quarter earnings surprise of 11.3%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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