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Why Are Sally Beauty (SBH) Shares Soaring Today

SBH Cover Image

What Happened?

Shares of beauty supply retailer Sally Beauty (NYSE: SBH) jumped 15% in the afternoon session after the company reported better-than-expected third-quarter earnings and raised its full-year profit outlook. The beauty products seller posted revenue of $933.3 million, which met forecasts, while its adjusted earnings of 51 cents per share comfortably beat Wall Street's expectations. Despite a minor dip in total sales, the company achieved its fourth straight quarter of operating margin growth, a sign of increased efficiency. Management also strengthened the company's financial position by repaying $21 million in debt and repurchasing $13 million of its own stock. Following the strong performance, Sally Beauty raised its full-year guidance for adjusted operating margin, signaling confidence in its ongoing strategic programs.

Is now the time to buy Sally Beauty? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Sally Beauty’s shares are very volatile and have had 21 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 previous big move we wrote about was 4 days ago when the stock dropped 3% as the broader market tumbled in the morning session after a surprisingly weak U.S. jobs report and the announcement of new, widespread tariffs on imported goods. The U.S. economy added only 73,000 jobs in July, falling far short of the 109,000 forecast. Compounding the issue, job gains for May and June were revised down by a combined 258,000, signaling what some see as “increasing signs of fragility” in the labor market. Simultaneously, the White House announced new tariffs, ranging from 10% to 41%, on goods from 92 countries. This “double whammy” of negative news has intensified fears that ongoing trade wars are damaging the U.S. economy. The combination of a weaker labor market and new trade barriers has rattled investor confidence, fueling expectations that the Federal Reserve may be forced to cut interest rates to support the economy.

Sally Beauty is up 6.9% since the beginning of the year, but at $11.42 per share, it is still trading 19.7% 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 $920.23.

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