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]

Core Insights - Sally Beauty Holdings reported net sales of $947 million for Q4, exceeding Wall Street's expectations of $933 million, marking a 1.3% increase year-over-year [1] - Adjusted earnings per share were 55 cents, surpassing analysts' estimates of 48 cents [2] - For the fiscal year 2025, net sales decreased by 0.4% to $3.70 billion [2] Sales Performance - Color sales increased by 7%, aided by partnerships with delivery services like Uber Eats and brands such as K18 and Sauce Beauty [2] - The company anticipates fiscal year 2026 sales to be between $3.71 billion and $3.77 billion [3] Strategic Outlook - The CEO expressed confidence in the company's growth strategies and long-term financial targets, aiming for annual net sales growth of 1% to 3% through fiscal 2028 [3] - The stock closed down 1.6% at $14.45 [4]

Financial Performance - Consolidated net sales for fiscal year 2025 decreased by $15.6 million, or 0.4%, to $3,701.4 million, impacted by foreign currency exchange rates by $11.4 million, or 0.3%[204] - Consolidated comparable sales increased by 0.3% compared to the prior fiscal year[204] - Consolidated gross profit increased by $20.4 million, or 1.1%, to $1,910.7 million, with gross margin improving by 70 basis points to 51.6%[204] - Consolidated net earnings rose by $42.5 million, or 27.7%, to $195.9 million, with diluted earnings per share increasing to $1.89 from $1.43[204] - Net sales for fiscal year 2025 were $2,991.24 million, with a gross profit of $1,568.10 million and net earnings of $180.56 million[231] Cash Flow and Debt Management - Cash provided by operations was $274.8 million for fiscal year 2025, compared to $246.5 million for the prior fiscal year[204] - Net cash provided by operating activities increased by $28.3 million, reaching $274.8 million in fiscal year 2025 compared to $246.5 million in 2024[223] - Net cash used by investing activities decreased by $50.6 million, totaling $58.3 million in 2025, primarily due to $43.6 million received from the sale of corporate headquarters[225] - Net cash used by financing activities increased by $24.7 million, amounting to $178.4 million in 2025, driven by higher net paydown of long-term debt[226] - Total debt was reduced by $119.0 million, and 5.0 million shares were repurchased under the share repurchase program[204] Assets and Liabilities - Total assets decreased to $2,177.97 million in 2025 from $2,085.18 million in 2024, while total liabilities also decreased to $1,883.75 million from $1,951.87 million[231] - The company had $875.0 million in outstanding debt as of September 30, 2025, consisting of $600.0 million in 2032 Senior Notes and $275.0 million remaining on term loan B[227] - Contractual obligations totaled $2,204.76 million as of September 30, 2025, with long-term debt obligations including interest amounting to $1,204.52 million[232] Interest Rate and Currency Risk - The weighted average interest rate on borrowings under the ABL facility was 5.7% during fiscal year 2025[227] - A 10% increase or decrease in exchange rates for the U.S. dollar versus foreign currencies would have impacted consolidated net sales by approximately 1.8% in fiscal year 2025[252] - A 1.0 percentage point interest rate increase would negatively impact annual interest expense and cash flows by $0.8 million at September 30, 2025[254] - Less than 20% of consolidated net sales were made in currencies other than the U.S. dollar for fiscal years 2025, 2024, and 2023[251] - The company holds $200 million of SOFR denominated interest hedged under an interest rate swap agreement to mitigate interest rate risk[254] - The company uses foreign exchange forward contracts to mitigate exposure to changes in foreign currency exchange rates[253] Credit Risk Management - Credit risk exposure is primarily related to accounts receivable, with a broad customer base mitigating this risk[256] - The allowance for doubtful accounts is deemed sufficient to cover customer credit risks as of September 30, 2025[256] - Derivative instruments expose the company to credit risk in the event of counterparty default, but current exposure is considered mitigated[257] - The company performs ongoing credit evaluations to manage credit risk associated with trade receivables[256] Operational Expenses - SG&A expenses for Sally increased by $22.3 million, or 2.4%, to $945.9 million, representing 45.2% of net sales[214] - BSG's SG&A expenses decreased by $12.2 million, or 2.7%, to $441.9 million, accounting for 27.5% of net sales[215] Impairment and Other Losses - The company recognized an impairment loss of $4.5 million on certain trade names due to decreased projected revenues from a specific product line in fiscal year 2025[248] Working Capital - Working capital increased by $12.9 million to $725.5 million at September 30, 2025, with a current assets to current liabilities ratio of 2.26 to 1.00[220] - Cash and cash equivalents increased to $85.36 million in 2025 from $32.82 million in 2024[231]

Core Insights - Sally Beauty Holdings, Inc. reported strong fourth-quarter fiscal 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][10]. Financial Performance - Adjusted earnings per share were $0.55, surpassing the Zacks Consensus Estimate of $0.49, and increased by 10% from $0.50 in the previous year [2][10]. - Consolidated net sales reached $947.1 million, exceeding the Zacks Consensus Estimate of $933 million, and grew by 1.3% from $935 million in the same quarter last year [2][10]. - Consolidated comparable sales also increased by 1.3% year over year [2]. E-commerce Performance - Global e-commerce sales amounted to $105 million, accounting for 11.1% of consolidated net sales for the quarter [3]. Margin and Cost Analysis - Gross profit rose by 3.1% year over year to $494.1 million, with gross margin expanding by 100 basis points to 52.2% [4]. - Adjusted selling, general and administrative expenses increased to $405.3 million, up $14 million from the previous year, representing 42.8% of sales compared to 41.8% a year earlier [4]. - Adjusted operating earnings were $88.6 million, slightly up from $88 million in the prior year, maintaining an adjusted operating margin of 9.4% [4]. Segment Performance - In the Sally Beauty Supply segment, net sales increased by 1.4% year over year to $541.6 million, with comparable sales growing by 1.2% [6]. - The Beauty Systems Group saw net sales rise by 1.1% to $405.5 million, with comparable sales improving by 1.4% and operating margin expanding by 160 basis points to 12.6% [6]. Financial Health - At the end of the fiscal fourth quarter, the company had cash and cash equivalents of $149.2 million, long-term debt of $862 million, and total stockholders' equity of $794.2 million [7]. - The company generated cash flow from operations of $121 million, with operating free cash flow at $78 million [7]. Future Guidance - For fiscal 2026, the company projects comparable sales growth to be flat to up 1% year over year, with consolidated net sales expected between $3.71 billion and $3.77 billion [11]. - Adjusted earnings per share are forecasted to be in the range of $2.00 to $2.10 for the fiscal year [11].

Core Points - U.S. stocks experienced a decline, with the Dow Jones index dropping over 100 points on Thursday [1] - Spectrum Brands Holdings Inc reported a quarterly adjusted EPS of $2.61, significantly exceeding the analyst consensus estimate of $0.86 [1] - The company's quarterly sales were $733.500 million, which fell short of the analyst consensus estimate of $741.111 million [1] Company Performance - Spectrum Brands Holdings shares surged 13.2% to $60.28 following the earnings report [2] - Ondas Holdings Inc saw a 24.4% increase in shares to $6.86 after reporting better-than-expected third-quarter results and raising FY25 sales guidance [4] - Firefly Aerospace Inc's shares rose 21.7% to $22.29 after exceeding quarterly financial expectations and raising FY25 sales guidance [4] - Cellebrite DI Ltd shares increased by 21.7% to $19.44 after reporting strong third-quarter results and raising FY25 sales guidance [4] - Sealed Air Corp shares gained 19.9% to $43.60 [4] - Dillard's Inc reported better-than-expected quarterly results, leading to an 18.3% rise in shares to $720.00 [4] - Digi International Inc shares jumped 17.5% to $42.30 following positive quarterly results [4] - Sally Beauty Holdings Inc shares rose 17.5% to $17.27 after reporting upbeat quarterly results [4] - Tetra Tech Inc gained 11.9% to $36.31 following strong quarterly earnings [4] - On Holding AG shares increased by 7.4% to $44.58 after reporting positive third-quarter earnings and issuing FY2025 sales guidance above expectations [4] - Nice Ltd shares rose 6.3% to $132.14 following strong quarterly sales [4]

Financial Data and Key Metrics Changes - For Q4, the company reported comparable sales growth of 1.3%, gross margin expansion of 100 basis points to 52.2%, adjusted operating margin of 9.4%, and a 10% increase in adjusted diluted earnings per share to $0.55 [4][22] - For the full year, the company achieved $3.7 billion in revenue, positive comparable sales, gross margin above 51%, and adjusted diluted earnings per share of $1.90, representing a 12% growth compared to the previous year [4][24] Business Line Data and Key Metrics Changes - In the Sally segment, net sales increased 1.4% to $542 million, with comparable sales up 1.2% and color sales increasing 8% [24][25] - The BSG segment saw net sales increase by 1.1% to $406 million, with comparable sales up 1.4% and color sales increasing by 5% [26][27] Market Data and Key Metrics Changes - Global e-commerce sales increased 15% to $105 million, representing 11% of total net sales [22] - E-commerce sales for Sally US and Canada grew by 34%, while BSG e-commerce sales increased 8% to $58 million [11][27] Company Strategy and Development Direction - The company is focusing on four key growth drivers: understanding and activating the customer, unlocking digital value, differentiating with product assortment and innovation, and accelerating new growth pathways [8][20] - The Sally Ignited initiative aims to transform the business into a modern beauty powerhouse, with plans for store refreshes and category expansions [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the Sally customer base and the effectiveness of strategic initiatives like licensed colorist on demand and digital marketplaces [36][66] - The company anticipates a challenging Q1 due to government shutdowns affecting lower-income consumers but expects recovery as the year progresses [66][68] Other Important Information - The company generated strong cash flow from operations of $275 million, with $119 million of debt paydown and over $50 million in share repurchases [5][28] - The Fuel for Growth program has generated cumulative run rate benefits of $74 million, with expectations for additional savings in fiscal 2026 [19][24] Q&A Session Summary Question: Key factors driving performance in Q4 - Management highlighted the strength of color sales in both segments, strong performance in digital marketplaces, and customer activation through the LCOD program [32][33] Question: Consumer environment and guidance - Management noted that the Sally customer remains resilient, with a focus on core color products, while lower-income consumers are showing some pressure due to government shutdowns [36][67] Question: Store remodel program update - The company has completed 30 store refreshes under the Sally Ignited initiative, with plans for an additional 50 locations in fiscal 2026 [45][46] Question: Long-term growth outlook - Management expressed confidence in achieving long-term growth targets, supported by customer activation, digital value, and category expansion [68][72]