Why Sally Beauty Stock Plummeted Today


What happened

Shares of Sally Beauty Holdings (NYSE:SBH) plummeted by as much as 10% today after the company reported fiscal first-quarter earnings. The results were mixed compared to analyst expectations.

So what

Revenue in the fiscal first quarter came in at $936 million, missing the Street’s forecast of $967.9 million in sales. That resulted in adjusted earnings per share of $0.50, beating the $0.47 per share in adjusted profits the market was looking for. Comparable store sales declined by 3.7% due to store closures in international markets related to the ongoing pandemic.

Assorted beauty products

Image source: Getty Images.

“Our teams executed well both operationally and financially in a particularly challenging topline environment,” CEO Chris Brickman said in a statement. “Despite the disruption to sales from store closures and capacity restrictions globally and salon shut-downs in California and parts of Canada, we delivered strong gross margins above 50%, closely managed expenses and generated a 6% increase in adjusted diluted earnings per share.”

Now what

At the end of December, 55% of the Sally Beauty’s corporate-owned stores were open, 37% were operating at reduced capacity, and 8% were closed. The beauty products retailer did not provide formal financial guidance for the fiscal second quarter due to ongoing macroeconomic uncertainties related to the public health crisis, but instead offered some commentary on the conference call with analysts.

READ:  4 Secrets to Beating the Average Investor

“Because these [store closures] disruptions are continuing and there is still a great deal of uncertainty related to potential restrictions going forward, we expect net sales to decline in our second fiscal quarter, softening modestly from Q1 levels,” Brickman said. “During this time, we are remaining agile and our teams are running the business with operational and financial rigor to preserve profitability and prudently manage cash.”

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/02/05/why-sally-beauty-stock-plummeted-today/

Xem thêm bài viết thuộc chuyên mục: investing

Related Articles

Leave a Reply

Back to top button