Quarterly earnings results are an excellent opportunity to assess a company’s performance, especially in comparison with its peers within the same sector. In this article, we will examine Sally Beauty (NYSE:SBH) and identify the best and worst performers in the specialty retail industry.
Understanding Specialty Retailers
Some retailers attempt to sell a wide range of products, while others focus on a specific category and aim to excel in that area. These stores, aptly referred to as Specialty Retailers, specialize in offering an extensive product selection within their chosen category and providing expert guidance to customers who require it. Although e-commerce competition exists, and waning retail foot traffic affects these retailers, the magnitude of the challenges depends on the products they sell and the additional value they provide in their stores.
Q3 Earnings Review
The 8 specialty retail stocks we track reported a satisfactory Q3. As a group, revenues exceeded analysts’ consensus estimates by 0.5%, while next quarter’s revenue guidance was in line. Thankfully, share prices of these companies have been resilient, increasing an average of 5.5% since the latest earnings results.
Sally Beauty (NYSE:SBH)
Catering to both everyday consumers and salon professionals, Sally Beauty (NYSE:SBH) is a retailer that sells high-quality beauty products such as makeup and haircare products. In its Q3 earnings report, Sally Beauty reported revenues of $935 million, up 1.5% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EBITDA estimates.
"We are pleased to conclude our fiscal year with strong fourth-quarter results, reflecting continued momentum across both our Sally Beauty and Beauty Systems Group segments," said Denise Paulonis, president and chief executive officer. Despite this positive performance, the stock is down 15.3% since reporting and currently trades at $10.61.
Is Now the Time to Buy Sally Beauty?
To gain a deeper understanding of Sally Beauty’s earnings results, we invite you to access our full analysis of the report, which is available for free.
Best Q3: Sportsman’s Warehouse (NASDAQ:SPWH)
A go-to destination for individuals passionate about hunting, fishing, camping, hiking, shooting sports, and more, Sportsman’s Warehouse (NASDAQ:SPWH) is an American specialty retailer offering a diverse range of active gear, equipment, and apparel. In its Q3 earnings report, Sportsman’s Warehouse reported revenues of $324.3 million, down 4.8% year on year, outperforming analysts’ expectations by 7.9%. The business had a strong quarter, logging a significant beat in revenue growth.
Best Buy (NYSE:BBY)
With humble beginnings as a stereo equipment seller, Best Buy (NYSE:BBY) now sells a broad selection of consumer electronics, appliances, and home office products. In its Q3 earnings report, Best Buy reported revenues of $9.45 billion, down 3.2% year on year. This number came in 2% below analysts’ expectations. It was a slower quarter for the company, with missed estimates in EBITDA and full-year EPS guidance.
Market Update
The recent rate hikes by the Fed have contributed to a significant cooling of inflation from its post-pandemic highs, drawing closer to the 2% goal without severely impacting economic growth. This disinflation has led to a soft landing for the economy. The stock market has thrived in 2024, spurred by recent rate cuts and a notable surge following Donald Trump’s presidential election win in November. Nonetheless, the outlook for 2025 remains clouded by future rate cuts as well as potential changes in trade policy and corporate taxes.
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