September 24, 2022

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Fashion groove

Sally Beauty Holdings is lower after soft guidance against stimulus comparable

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Sally Beauty Holdings (NYSE:SBH) traded lower on Thursday after missing estimates with Q1 earnings report and setting soft guidance for the full year.

Sales are expected to be flat to down 2% for FY22 compared to the prior year with the retailer pointing to supply chain headwinds and inflation pressures. SBH is also lapping some stimulus-boosted quarters. Adjusted operating margin is expected to be approximately 11.0%. The retailer plans for its store count to decrease by approximately 1% to 2% for the fiscal year due to a focus on store optimization.

On the balance sheet, SBH used excess cash to repurchase 3.2M of its shares in Q2. SBH had cash and cash equivalents of $227M at the end of the quarter and no borrowings outstanding under its asset-based revolving line of credit. The retailer ended the quarter with a net debt leverage ratio of 2.07X.

On Wall Street, Oppenheimer downgraded Sally Beauty Holdings (SBH) to Peer Perform from Outperform following the earnings update.

Shares of Sally Beauty Holdings (SBH) declined 15.36% in premarket trading to $13.50 to mark a new 52-week low.

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