Contrasting Sally Beauty (NYSE:SBH) & Leslie’s (NASDAQ:LESL)

Robert Hundley

Sally Beauty (NYSE:SBHGet Rating) and Leslie’s (NASDAQ:LESLGet Rating) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Profitability

This table compares Sally Beauty and Leslie’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sally Beauty 6.66% 104.07% 9.79%
Leslie’s 9.97% -48.04% 15.88%

Volatility & Risk

Sally Beauty has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, Leslie’s has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Sally Beauty and Leslie’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sally Beauty 2 2 0 0 1.50
Leslie’s 0 1 10 0 2.91

Sally Beauty currently has a consensus target price of $18.70, suggesting a potential upside of 37.10%. Leslie’s has a consensus target price of $28.18, suggesting a potential upside of 88.63%. Given Leslie’s’ stronger consensus rating and higher possible upside, analysts plainly believe Leslie’s is more favorable than Sally Beauty.

Earnings and Valuation

This table compares Sally Beauty and Leslie’s’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sally Beauty $3.88 billion 0.38 $239.86 million $2.27 6.01
Leslie’s $1.34 billion 2.03 $126.63 million $0.72 20.75

Sally Beauty has higher revenue and earnings than Leslie’s. Sally Beauty is trading at a lower price-to-earnings ratio than Leslie’s, indicating that it is currently the more affordable of the two stocks.

Summary

Leslie’s beats Sally Beauty on 7 of the 12 factors compared between the two stocks.

About Sally Beauty

(Get Rating)

Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under third-party brands, such as Wella, Clairol, OPI, Conair, and L’Oreal, as well as exclusive-label brand merchandise. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under third-party brands, such as Paul Mitchell, Wella, Matrix, Schwarzkopf, Kenra, Goldwell, Joico, and Olaplex. As of September 30, 2021, the company operated 4,777 stores, including 134 franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. It also distributes its products through full-service/exclusive distributors, open-line distributors, direct sales, and mega-salon stores. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.

About Leslie’s

(Get Rating)

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It offers pool chemicals consisting of chlorine, sanitizers, water balancers, specialty chemicals, and algae control; pool covers, including winter, solar and safety covers, leaf nets, cover reels, and cover alternatives; pool equipment, which comprise pool cleaners, pool pumps, pool filters, pool heating, and lighting; and pools, such as above ground pools, soft side pools, above ground pools liners and equipment, ladders and rails, and diving boards. The company also provides pool maintenance products, including pool closing and opening supplies, filter catridges, chlorine floaters, backwash and vacuum hoses, and cleaning attachments; parts, such as automatic pool cleaner parts, pool filter and pump parts, and pool heater and heat pump parts; and safety, recreational, and fitness-related products. In addition, it provides pool equipment and repair services. The company markets its products through 952 company operated locations in 38 states and e-commerce websites. It serves the residential, professional, and commercial consumers. The company was founded in 1963 and is headquartered in Phoenix, Arizona.



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