Sally Beauty Holdings, Inc. SBH is likely to register top and bottom-line growth when it reports first-quarter fiscal 2026 earnings on Feb. 9, before the opening bell. Investors are closely monitoring for insights into the company’s performance and strategic direction.
The Zacks Consensus Estimate for its revenues is pegged at $943.9 million, indicating an increase of 0.6% from the prior-year quarter’s reported level. The consensus estimate for earnings has been unchanged over the past 30 days at 47 cents a share, which calls for 9.3% growth from the prior-year quarter’s reported level.
Sally Beauty, a specialty retailer and distributor of professional beauty supplies, has a trailing four-quarter earnings surprise of 10.3%, on average. In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 12.2%.
Sally Beauty Holdings, Inc. Price, Consensus and EPS Surprise
Sally Beauty Holdings, Inc. price-consensus-eps-surprise-chart | Sally Beauty Holdings, Inc. Quote
Factors Shaping Sally Beauty’s Q1 Outcome
SBH’s first-quarter performance is likely to have benefited from continued strength in its core hair color category, which remains a highly resilient segment across both the consumer-facing Sally Beauty business and the professional-focused Beauty Systems Group. The company’s ability to serve both at-home users and salon professionals positions it well to capture demand across a broad spectrum of beauty consumers. The Zacks Consensus Estimate indicates 0.6% and 0.5% increases in Sally Beauty Supply and Beauty Systems Group revenues, respectively, for the quarter under review.
Another meaningful driver likely to have influenced the quarter is sustained momentum in customer engagement initiatives, particularly digital and service-led offerings. Programs such as Licensed Colorist OnDemand enhance consumer confidence in complex color purchases, helping convert new and reactivated customers. At the same time, continued investments in personalization, performance marketing and omnichannel capabilities are likely to have improved customer engagement.
Product innovation also appears to have played a constructive role during the quarter. The company has maintained a steady pipeline of brand launches and trend-led innovations, particularly in professional hair care and adjacent categories. Expanding higher-margin owned brands, refreshing legacy labels and leaning into categories such as care, nails and styling tools help diversify demand beyond core color. In addition, early progress from store refresh initiatives and brand modernization efforts likely enhanced the in-store experience.
The aforementioned initiatives are likely to have supported top-line growth. On the last reported quarter’s earnings call, management guided consolidated net sales of $935-$945 million, indicating 40 basis points of FX benefits. On the profitability front, the company’s performance is likely to have been supported by continued gross margin resilience and disciplined cost management. SBH guided adjusted operating earnings between $75 million and $80 million, reflecting ongoing benefits from supply-chain efficiencies, freight normalization and sourcing improvements.
That said, the quarter may have faced pressure from a still-cautious consumer environment and temporary government shutdown-related disruptions. Management has previously highlighted that periods of macro uncertainty can lead to more cautious spending behavior, including fewer store visits or delayed purchases outside essential categories. While core color demand tends to hold up, softness in discretionary categories or reduced traffic can weigh on overall momentum.
What the Zacks Model Predicts for SBH
As investors prepare for Sally Beauty’s fiscal first-quarter announcement, 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, which is not the case here.
Sally Beauty currently has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are 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 +1.56% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Ulta Beauty’s fourth-quarter fiscal 2025 earnings is pegged at $7.93 per share, implying a decline of 6.3% from the year-ago quarter’s actual. For Ulta Beauty’s quarterly revenues, the consensus mark is pegged at $3.82 billion, which indicates an increase of 9.6% from the year-ago quarter’s actual. ULTA delivered a trailing four-quarter earnings surprise of 15.7%, on average.
Five Below, Inc. FIVE has an Earnings ESP of +1.60% and currently flaunts a Zacks Rank of 1. FIVE is likely to register a top-line increase when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.71 billion, indicating a 23% rise from the figure reported in the prior-year quarter.
The consensus estimate for Five Below’s earnings is pegged at $3.93 per share, implying 12.9% growth from the year-ago quarter’s actual. FIVE delivered a trailing four-quarter earnings surprise of 62.1%, on average.
Dollar General Corporation DG currently has an Earnings ESP of +5.95% and a Zacks Rank #2. The Zacks Consensus Estimate for DG’s fourth-quarter fiscal 2025 earnings per share is pegged at $1.57, implying a 6.6% year-over-year decline.
The Zacks Consensus Estimate for quarterly revenues is pegged at $10.74 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 22.9%, on average.
This article originally published on Zacks Investment Research (zacks.com).
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