Yahoo Finance Earnings Miss: Sally Beauty Holdings, Inc. Missed EPS By 29% And Analysts Are Revising Their Forecasts
Sally Beauty Holdings, Inc. (NYSE:SBH) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Statutory earnings per share fell badly short of expectations, coming in at US$0.27, some 29% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$908m. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Sally Beauty Holdings
Taking into account the latest results, Sally Beauty Holdings' seven analysts currently expect revenues in 2024 to be US$3.71b, approximately in line with the last 12 months. Per-share earnings are expected to climb 19% to US$1.82. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.72b and earnings per share (EPS) of US$1.84 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$11.40, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Sally Beauty Holdings at US$14.00 per share, while the most bearish prices it at US$8.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 0.1% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.9% per year. Although Sally Beauty Holdings' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sally Beauty Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$11.40, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sally Beauty Holdings going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Sally Beauty Holdings that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
