Core Thesis - The investment thesis for Sally Beauty (SBH) is based on the expectation of rapid EPS growth driven by significant stock buybacks and an efficiency plan aimed at cost reduction [1] Financial Performance - The implementation of the efficiency plan is anticipated to further enhance EPS by lowering operational costs [1] Investment Strategy - The focus is on long-term investment opportunities, with a strategy to hold stocks for several years, particularly in sectors like restaurants, retailers, and food manufacturers [1]

Core Insights - Sally Beauty Holdings, Inc. (SBH) and Coty Inc. (COTY) represent two distinct business models in the global cosmetics industry, with SBH focusing on specialty retail and professional beauty supply distribution, while COTY operates as a brand-driven manufacturer across various beauty categories [1][2] Business Models - Sally Beauty operates 4,422 stores globally, serving both DIY consumers and licensed professionals, with hair color being its largest and most resilient category [3] - Coty is a global beauty manufacturer with products sold in over 130 countries, with fragrance as its core strength and largest category [4] Growth Strategies - Sally Beauty emphasizes consistency and efficiency, achieving 1.3% consolidated comparable sales growth in Q4 fiscal 2025 and expanding gross margins to 52.2% [5][11] - Coty is pursuing a transformational approach, with mid-single-digit growth in its prestige fragrance category and ongoing integration of its fragrance operations [6] Digital Strategy - Sally Beauty's global e-commerce contributed 11.1% of net sales in Q4 fiscal 2025, focusing on profitability and customer lifetime value [7] - Coty has a larger digital presence, with e-commerce representing around 20% of sales, expanding partnerships in global e-commerce and social commerce [8] Financial Performance - Sally Beauty reported 1.3% comparable sales growth in Q4 fiscal 2025, generating $216 million in free cash flow and ending the year with a net leverage of 1.6x [10][11] - Coty experienced an 8% like-for-like revenue decline in Q1 fiscal 2026, with adjusted EBITDA falling 18% year over year [13] Outlook - Sally Beauty anticipates flat to modest comparable sales growth in fiscal 2026, supported by its core hair color category [12] - Coty expects a recovery in the second half of fiscal 2026, driven by fragrance launches and productivity savings [14] Consensus Estimates - The Zacks Consensus Estimate for Sally Beauty's fiscal 2026 EPS indicates an 8.4% year-over-year increase, while Coty's shows a 90.9% increase [15][16] Price Performance - Over the past year, Sally Beauty shares gained 24.3%, while Coty shares declined by 53.4% [18] - Sally Beauty trades at a forward P/E ratio of 7.14, while Coty's is at 7.23 [19] Investment Perspective - Sally Beauty is viewed as a more attractive near-term opportunity due to its focus on professional hair color and strong cash flow generation, while Coty remains in a transitional phase with higher volatility [20]

Company Overview - Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies, headquartered in Denton, TX [12] - It is one of the largest distributors of beauty products in the United States, offering a wide selection of products including hair color, styling tools, and skin and nail care items [12] - The company operates 3,096 stores under the Sally Beauty Supply segment and 1,198 stores under the Beauty Systems Group segment, with a presence in the U.S., Puerto Rico, and several other countries [12] Investment Ratings - Sally Beauty is rated 2 (Buy) on the Zacks Rank, indicating a favorable investment outlook [13] - The company has a VGM Score of A, suggesting strong potential across value, growth, and momentum metrics [13] Growth Potential - Sally Beauty is projected to have year-over-year earnings growth of 8.4% for the current fiscal year [13] - Recent upward revisions by three analysts in the last 60 days have increased the Zacks Consensus Estimate for earnings to $2.06 per share, reflecting a positive trend [13] - The company has an average earnings surprise of +10.3%, indicating a history of exceeding earnings expectations [13] Conclusion - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Sally Beauty is positioned as a strong candidate for growth investors [14]

Core Viewpoint - Sally Beauty (SBH) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on an upward trend in earnings estimates, which significantly influences stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - For the fiscal year ending September 2026, Sally Beauty is expected to earn $2.06 per share, with a 3% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Sally Beauty to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Insights - The article discusses the investment strategy and offerings of BAD BEAT Investing, particularly focusing on Sally Beauty Holdings, Inc. (SBH) as a stock of interest [1] Group 1: Company Overview - BAD BEAT Investing is led by Quad 7 Capital, a team of 7 analysts with nearly 12 years of experience in identifying investment opportunities [1] - The company has a proven track record, notably calling for a market sell-off in February 2020 and maintaining an average position of 95% long and 5% short since May 2020 [1] Group 2: Investment Strategy - BAD BEAT Investing emphasizes short- and medium-term investments, income generation, special situations, and momentum trades [1] - The company aims to educate investors on market dynamics and trading strategies through a comprehensive playbook, providing in-depth research with clear entry and exit targets [1] Group 3: Membership Benefits - Members of BAD BEAT Investing gain access to well-researched trade ideas, multiple chat rooms, daily analyst upgrade/downgrade summaries, and resources for learning basic options trading [1] - The service is currently offering a promotional discount of 22% on the trial price, reducing it from $99 to $77 [1]

Core Insights - The article discusses the investment strategy and offerings of BAD BEAT Investing, particularly focusing on Sally Beauty Holdings, Inc. (SBH) as a stock of interest [1] Group 1: Company Overview - BAD BEAT Investing is a team of seven analysts with nearly 12 years of experience in identifying investment opportunities [1] - The company has a proven track record, notably calling for a market sell-off in February 2020 and maintaining a long position of 95% since May 2020 [1] Group 2: Investment Strategy - The investment approach includes short- and medium-term investments, income generation, special situations, and momentum trades [1] - The company emphasizes teaching investors to become proficient traders through a structured playbook, rather than just providing trade ideas [1] Group 3: Membership Benefits - Members receive in-depth research, clear entry and exit targets, and access to four chat rooms for discussions [1] - Additional benefits include daily summaries of key analyst upgrades/downgrades and learning resources for basic options trading [1]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Sally Beauty (SBH) - Sally Beauty currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - The stock has shown strong performance, with a 6.23% increase over the past week, compared to a 3.11% increase in the Zacks Retail - Miscellaneous industry [6] - Over the last quarter, SBH shares increased by 10.63%, and by 16.58% over the past year, outperforming the S&P 500, which moved 5.76% and 14.27% respectively [7] Trading Volume - The average 20-day trading volume for SBH is 1,982,947 shares, indicating a bullish sign when combined with rising stock prices [8] Earnings Outlook - In the past two months, three earnings estimates for SBH have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $2.00 to $2.06 [10] - For the next fiscal year, one estimate has moved upwards, with no downward revisions during the same period [10] Conclusion - Considering the positive momentum indicators and earnings outlook, SBH is positioned as a promising investment opportunity with a Momentum Score of B [12]

Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores provide a framework for evaluating stocks based on value, growth, and momentum characteristics [2] Zacks Style Scores Overview - Stocks are rated from A to F based on their potential to outperform the market, with A being the highest score [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - Emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - Targets stocks with upward or downward price trends, utilizing short-term price changes and earnings estimate revisions [5] VGM Score - Combines all three Style Scores to provide a comprehensive assessment of stocks based on value, growth, and momentum [6] Zacks Rank Integration - The Zacks Rank uses earnings estimate revisions to identify stocks with high potential, with 1 (Strong Buy) stocks historically achieving an average annual return of +23.93% since 1988 [7] - A large number of stocks can have high Zacks Ranks, making Style Scores essential for narrowing down choices [8] Investment Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [9] - The direction of earnings estimate revisions is crucial in stock selection, as lower-ranked stocks may still have high Style Scores but face declining forecasts [10] Company Spotlight: Sally Beauty Holdings, Inc. - Sally Beauty is a leading retailer and distributor of professional beauty supplies, operating 3,096 stores under the Sally Beauty Supply segment and 1,198 stores under the Beauty Systems Group segment [11] - The company has a Zacks Rank of 2 (Buy) and a VGM Score of A, indicating strong growth potential with an expected year-over-year earnings growth of 8.4% for the current fiscal year [12] - Recent upward revisions in earnings estimates and a solid earnings surprise average of +10.3% position Sally Beauty as a strong candidate for growth investors [12][13]

Company Performance - Sally Beauty (SBH) has shown a year-to-date performance increase of approximately 36.2%, significantly outperforming the average gain of 5.1% in the Retail-Wholesale sector [4] - The Zacks Consensus Estimate for SBH's full-year earnings has increased by 3.7% over the past quarter, indicating a positive trend in analyst sentiment [3] Industry Comparison - Sally Beauty belongs to the Retail - Miscellaneous industry, which currently ranks 63 in the Zacks Industry Rank, with an average performance of 0% this year, highlighting SBH's superior performance [5] - In contrast, American Eagle Outfitters (AEO), another stock in the Retail-Wholesale sector, has a year-to-date return of 5.9% and belongs to the Retail - Apparel and Shoes industry, which has declined by 16.3% this year [6]

Core Insights - Sally Beauty Holdings reported fiscal Q4 2025 results that exceeded consensus analyst estimates, yet the stock declined by 1.6% [1] Financial Performance - For the quarter ending September 30, net sales increased by slightly over 1% year-over-year to $947 million, while non-GAAP net income rose nearly 8% to $56.4 million ($0.55 per share) [2][3] - Both key metrics surpassed analyst expectations, with analysts predicting under $933 million in sales and $0.45 per share for non-GAAP net profit [3] Future Guidance - For fiscal year 2026, Sally Beauty expects net sales between $3.71 billion and $3.77 billion, slightly above the $3.7 billion reported for fiscal 2025 and above the average analyst estimate of $3.69 billion [4] - The company forecasts adjusted earnings per share of $2 to $2.10, higher than last year's $1.90 and above the consensus expectation of $1.82 [5]