As Sally Beauty Holdings, Inc. SBH prepares to announce its first-quarter fiscal 2025 earnings results on Feb. 13 before the market opens, investors are keen to assess its performance amid ongoing market challenges and opportunities. 

SBH operates in the highly competitive beauty and personal care space, catering to professionals and consumers. The Zacks Consensus Estimate for revenues is pegged at $941.4 million, which indicates an improvement of 1.1% from the prior-year reported figure.

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 43 cents a share, calls for 10.3% growth compared to the same period last year.

Sally Beauty has a trailing four-quarter earnings surprise of 3.7%, on average. In the last reported quarter, this Denton, TX-based company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 4.2%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Key Factors to Observe for Sally Beauty’s Q1 Earnings

Sally Beauty continues to advance its strategic priorities, focusing on enhancing customer engagement, growing high-margin-owned brands and delivering innovation. The company benefits from a loyal customer base that consistently relies on its extensive product selection, including professional-grade hair color, styling tools and nail care. 

The company’s strategic focus on digital expansion is reshaping its growth trajectory. Through enhanced e-commerce capabilities and personalized online services, Sally Beauty is capturing new customers while improving engagement with existing ones. Its investments in digital tools, such as virtual consultations, enhance the shopping experience, driving higher conversion rates and repeat purchases. The company has expanded its marketplace presence with platforms like Amazon, DoorDash, Instacart and Walmart, attracting a broader customer base.

Sally Beauty entered the first quarter with strong momentum, driven by consistent comparable sales growth in its key segments. The Zacks Consensus Estimate suggests comparable sales growth of 1.4% and 1.2% across Sally Beauty Supply and Beauty Systems Group, respectively. The consensus mark indicates a 1.3% increase in overall comparable sales. 

The company’s Fuel for Growth program is expected to have boosted first-quarter earnings by improving cost efficiency and driving margin expansion. In fiscal 2024, the initiative delivered $28 million in savings, and SBH expects a cumulative benefit of $70 million by the end of FY25. About $40 million in cost reductions are set to be realized in fiscal 2025, with 60% of these savings improving the gross margin and 40% reducing SG&A expenses.

What the Zacks Model Says About SBH

As investors prepare for Sally Beauty’s first-quarter results, the question looms regarding earnings beat or miss. 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. However, that’s not the case here. 

Sally Beauty has a Zacks Rank #3 but an Earnings ESP of 0.00%. 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 three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Urban Outfitters URBN has an Earnings ESP of +2.99% and currently sports a Zacks Rank of 1. URBN's top line is anticipated to advance year over year when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.63 billion, which suggests a 9.4% increase from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to register a rise in the bottom line. The consensus estimate for Urban Outfitters’ fourth-quarter earnings is pegged at 89 cents a share, up 29% from the year-ago quarter. URBN has a trailing four-quarter earnings surprise of 22.8%, on average.

Abercrombie & Fitch ANF has an Earnings ESP of +0.48% and carries a Zacks Rank of 3 at present. ANF is likely to register top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.56 billion, which suggests a 7.7% rise from the figure reported in the year-ago quarter. 

The consensus estimate for Abercrombie & Fitch’s fourth-quarter earnings is pegged at $3.51 per share, which calls for 18.2% growth from the figure reported in the year-ago quarter. ANF delivered an earnings beat of 14.8%, on average, in the trailing four quarters.

Costco COST currently has an Earnings ESP of +0.56% and a Zacks Rank of 2. COST's top line is anticipated to increase year over year when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $63.2 billion, which suggests an 8.2% jump from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Costco’s second-quarter earnings is pegged at $4.09 per share, up 10.2% from the year-ago quarter. COST has a trailing four-quarter earnings surprise of 2%, on average.

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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report

Sally Beauty Holdings, Inc. (SBH) : Free Stock Analysis Report

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