Sally Beauty (SBH) is expected to report an increase in earnings and revenue year-over-year for the 2016 fiscal fourth quarter before Tuesday's market open.
Analysts surveyed by FactSet are looking for adjusted earnings of 41 cents per share on revenue of $991 million.
During the same period a year ago, the Denton, TX-based beauty supplies retailer earned 38 cents per diluted share on revenue of $964.2 million.
Same-store sales are projected to rise 2.3% during the 2016 fiscal fourth quarter compared to growth of 3.5% last year, according to FactSet.
"After making progress in Q1, the company has taken a few steps back lately due to disruption associated with the meaningful store changes, marketing missteps, and the recent unexpected CFO resignation," Oppenheimer, which rates the stock "outperform," wrote in a recent note.
In late September, CFO Mark Flaherty resigned his position. Janna Minton, the chief accounting officer and controller, will be the interim principal financial officer until a successor is appointed.
Short interest has jumped recently to 7.9% from 4.7% in August, and Oppenheimer suspects the CFO resignation and concerns about the company's earnings outlook have contributed to the more downbeat sentiment surrounding shares.
Overall, the firm believes Sally Beauty has made progress in improving the look and feel of its stores through remodeling and adding new studios, including for nails and cosmetics. The stores look less dated than a few quarters ago, according to Oppenheimer.
However, the company had some marketing missteps during the third quarter, including changing its customer relationship management (CRM) email vendor, which disrupted some communications with customers.
"We see a difficult outlook likely persisting at least a few more quarters including a potential Street earnings reset on the print. However, we still view the risk/reward as attractive at these levels, but similar to other retail turnarounds, patience is needed as they very rarely work in a straight line," the firm said.
Shares of Sally Beauty were advancing 2.81% to $27.48 in mid-afternoon trading on Thursday.