Q3 Headwinds Take Toll on Sally Beauty Holdings
December 30, 2023
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The company had to confront numerous headwinds that ultimately took a toll on their earnings. Sally Beauty ($NYSE:SBH) Holdings has been struggling for some time now due to the negative impacts of the pandemic. This difficult quarter demonstrates the ongoing strain that the company is facing due to the pandemic. SALLY BEAUTY is an American company that supplies professional beauty products such as shampoos, conditioners, hair colors, beauty tools, and salon furniture to salons and retail stores worldwide.
Market Price
On Tuesday, Sally Beauty Holdings (SALLY BEAUTY) stock opened at $13.2 and closed at $13.5, up 2.4% from the previous closing price of 13.2. This slight gain comes despite the headwinds the company has been facing in the third quarter of the year. SALLY BEAUTY has struggled, with sales figures not meeting analysts’ expectations, causing their stock to fall in anticipation of their quarterly earnings report.
The company has also seen an increase in competition, putting pressure on their profit margins. Despite these headwinds, SALLY BEAUTY managed to end the session up 2.4%, signaling that investors remain confident in the company’s ability to navigate through the challenging environment. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Sally Beauty. More…
| Total Revenues | Net Income | Net Margin |
| 3.73k | 184.6 | 5.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Sally Beauty. More…
| Operations | Investing | Financing |
| 249.31 | -99.78 | -100.82 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Sally Beauty. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.73k | 2.22k | 4.72 |
Key Ratios Snapshot
Some of the financial key ratios for Sally Beauty are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 2.0% | 7.9% | 8.7% |
| FCF Margin | ROE | ROA |
| 4.3% | 40.8% | 7.5% |
Analysis
As a GoodWhale analyst, I have conducted an analysis of SALLY BEAUTY‘s financials. According to the Star Chart, SALLY BEAUTY is classified as an ‘elephant’, which indicates that the company is strong in asset and medium in profitability and weak in dividend and growth. This implies that the company has a lot of assets after liabilities are deducted. Considering its cashflows and debt, SALLY BEAUTY has a high health score of 8/10, suggesting that it is capable of safely riding out any crisis without the risk of bankruptcy. Therefore, this may be an attractive company for investors looking for stability and a good return on their investment. More…
Peers
The beauty industry is a competitive one, with many different companies vying for market share. Sally Beauty Holdings Inc is one such company, and it competes against Adore Beauty Group Ltd, Matas A/S, and Boutiques Inc, among others. While each company has its own strengths and weaknesses, Sally Beauty Holdings Inc has been able to stay ahead of the competition and maintain a leading position in the industry.
– Adore Beauty Group Ltd ($ASX:ABY)
Adore Beauty Group Ltd is an Australian-based company that retails beauty products. It has a market capitalization of 150.6 million as of 2022 and a return on equity of 5.82%. The company offers a wide range of products including skincare, haircare, makeup, and fragrances. It also provides a platform for beauty experts to share their tips and tricks with the Adore Beauty community.
– Matas A/S ($LTS:0QFA)
Matas A/S is a large publicly traded company with a market capitalization of 2.84 billion as of 2022. The company has a strong return on equity of 8.02%. Matas A/S is a leading retailer in Denmark with over 1,000 stores. The company offers a wide variety of products including cosmetics, health, and beauty products.
– Boutiques Inc ($TSE:9272)
Boutiques Inc is a publicly traded company that designs, manufactures, and sells women’s clothing and accessories. The company was founded in 2001 and is headquartered in New York City. As of 2022, Boutiques Inc had a market capitalization of $13.97 billion and a return on equity of 20.46%. The company’s products are sold through its own retail stores, as well as through department stores and online retailers.
Summary
However, declines in the US and Latin America, as well as higher-than-expected costs for supply chain investments and its store transition weighed on results. Looking ahead, management expects sales and operating margin to be pressured in the short-term, but expects long-term benefits from strategic investments in supply chain, stores, and new product launches. Investors should monitor Sally Beauty’s progress as it progresses further into digital transformation and attempts to grow its sales and margins.
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