When Amazon Attacks: Why Sally Beauty Stock Dropped 13.5% – Yahoo Finance

  • yoliebijoux
  • June 26, 2019
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(NYSE: SBH) are down 13.5% as of 12:55 p.m. EDT. The reason:” data-reactid=”12″>Shares of beauty products retailer and distributor Sally Beauty Holdings (NYSE: SBH) are down 13.5% as of 12:55 p.m. EDT. The reason:

(NASDAQ: AMZN) announced on its Amazon Business blog that it has just launched a specialized Amazon Professional Beauty Store catering to “professional stylists, barbers, and estheticians.”” data-reactid=”13″>This morning, Amazon.com (NASDAQ: AMZN) announced on its Amazon Business blog that it has just launched a specialized Amazon Professional Beauty Store catering to “professional stylists, barbers, and estheticians.”

Woman applying red lipstick.

Image source: Getty Images.

the Amazon effect,” a phenomenon in which the mere suggestion by Amazon that it may intend to compete in a market can cause investors to flee, screaming, from the stocks of companies already competing in that market.” data-reactid=”27″>This is the latest example of “the Amazon effect,” a phenomenon in which the mere suggestion by Amazon that it may intend to compete in a market can cause investors to flee, screaming, from the stocks of companies already competing in that market.

S&P Global Market Intelligence, sales to beauty industry professionals through its Beauty Systems Group account for 41% of Sally Beauty’s business. These sales are now at risk.” data-reactid=”28″>According to data from S&P Global Market Intelligence, sales to beauty industry professionals through its Beauty Systems Group account for 41% of Sally Beauty’s business. These sales are now at risk.

Granted, it’s not as if Amazon has never sold beauty products before now. In fact, I’d bet money that from time to time in the past, one cosmetology shop or another has placed bulk purchases at Amazon — it’s just that now, Amazon says it’s looking more intently at this space and targeting it, which is why investors are scared.

Destinations online travel booking business. In April 2019, Amazon abandoned efforts to break into online shopping in China. And just earlier this month, Amazon ended its Amazon Restaurants experiment.” data-reactid=”31″>That being said, even Amazon isn’t entirely unstoppable. Nor do its ventures into new areas of business always work out. In 2015, for example, Amazon exited its Destinations online travel booking business. In April 2019, Amazon abandoned efforts to break into online shopping in China. And just earlier this month, Amazon ended its Amazon Restaurants experiment.

By which I mean to say, Sally Beauty may be down today, but at a valuation of just six times earnings, I wouldn’t necessarily count Sally Beauty stock out quite yet.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.” data-reactid=”41″>John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

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