Sally Beauty Holdings' (SBH) Comps See Inflection, Says Wells Fargo

Sally Beauty Holdings' (NYSE: SBH) Q1 EPS missed consensus by a penny, but in the view of analyst Chris Ferrara of Wells Fargo, comps were more important.

"SBH reported EPS of $0.35 vs our estimate and consensus of $0.36 . However, in our view, the slight EPS miss (driven half by a 25bp miss of our EBIT margin forecast) should take a back seat to the sales and comp acceleration seen at Sally Beauty Supply," said Ferrara.

"The consolidated comp was +2.2% vs our +0.5% estimate, with both Sally Beauty Supply (+0.9% vs our 1.0% estimate) and BSG (+5.2% vs our 4.0% estimate) beating our forecast. Sally Beauty Supply delivered the growth inflection a quarter ahead of what we had expected, posting its first positive comp quarter since Q1 2013. The two-year stack for both Sally Beauty Supply and the consolidated comp accelerated modestly from last quarter, breaking a 6quarter streak of deceleration. The company attributes Sally's acceleration to an increase in traffic, based on the return to targeted marketing and new brand introductions, and expects U.S. traffic to continue to improve throughout the year," he added.

Wells Fargo has an Outperform rating on Sally Beauty Holdings

For an analyst ratings summary and ratings history on Sally Beauty Holdings (NYSE: SBH) click here. For more ratings news on Sally Beauty Holdings click here.

Shares of Sally Beauty Holdings closed at $27.95 yesterday.

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