SBH - Strategic Growth Pillars Aid Sally Beauty High Costs Ail | Benzinga
Sally Beauty Holdings, Inc. (NYSE: SBH) is capitalizing on the strength of its strategic growth initiatives. The beauty products provider is reaping benefits from a focus on customer-centric approaches. The introduction of Happy Beauty Co. represents a promising addition. However, Sally Beauty faces ongoing macroeconomic challenges that are impacting consumer spending.
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Strategic Growth Pillars Solid
The Zacks Rank #3 (Hold) company is focused on its three key strategic initiatives, which include enhancing customer centricity, growing high-margin-owned brands and carrying out innovations while increasing the efficiency of operations and optimizing its capabilities. Talking about innovation, management recently achieved significant territory expansion for two key brands in the Beauty Systems Group (BSG) segment. In the latter part of the year, Sally Beauty anticipates introducing innovation in skincare and men's grooming at Sally Beauty Supply. The company's broad-based store optimization program helped increase productivity and profitability by delivering an engaging omnichannel experience for customers.
The Fuel for Growth initiative keeps the company well-positioned to capture gross margin and SG&A gains while undertaking growth and returning shareholders' value. Sally Beauty is on track to capture pre-tax benefits of $20 million in the fiscal 2024. It has identified an additional potential pre-tax benefit of approximately $50 million in fiscal 2025, leading to cumulative benefits in the fiscal 2026 nearing $120 million.
With regard to customer-centric efforts, management is focused on acquiring new customers via marketing programs, differentiated product offerings and strategic initiatives. In its last earnings call, management highlighted that its Licensed Colorist OnDemand service is accessible nationwide online and ...