What Happened?
Shares of beauty supply retailer Sally Beauty (NYSE:SBH) jumped 21.3% in the afternoon session after the company reported impressive first quarter 2025 results, with a significant margin improvement contributing to the EBITDA and EPS beat. On the other hand, sales fell 2.8%, weighed down by softer foot traffic and weaker demand for stylists due to the harsh flu season and macro uncertainty. Zooming out, we think this was a mixed yet decent marred by short-term challenges.
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What The Market Is Telling Us
Sally Beauty’s shares are very volatile and have had 20 moves greater than 5% over the last year. But moves this big are rare even for Sally Beauty and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 12.7% on the news that the company reported strong second quarter 2024 results. Sally Beauty beat analysts' EPS expectations. Its revenue also outperformed Wall Street's estimates. The company maintained its previous full year guidance, calling for "net sales and comparable sales to be approximately flat compared to the prior year". Overall, this quarter was quite solid.
Sally Beauty is down 6.4% since the beginning of the year, and at $10.00 per share, it is trading 29.7% below its 52-week high of $14.22 from November 2024. Investors who bought $1,000 worth of Sally Beauty’s shares 5 years ago would now be looking at an investment worth $1,036.
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