Sally Beauty Holdings Reports First Quarter Fiscal 2026 Results

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6:45 AM on Monday, February 9

The Associated Press

PLANO, Texas--(BUSINESS WIRE)--Feb 9, 2026--

Sally Beauty Holdings, Inc. (NYSE: SBH) (the “Company”), the leader in professional hair color, today announced financial results for its first quarter ended December 31, 2025. The Company will hold a conference call today at 7:30 a.m. Central Time to discuss these results and its business.

“Our first quarter performance marks a strong start to fiscal 2026,” said Denise Paulonis, president and chief executive officer. “We achieved top line results that met our expectations, maintained healthy gross margins and delivered adjusted EPS growth of 12% - consistent with our long-term financial algorithm. Our robust cash flow from operations enabled us to invest for growth, reduce debt and return value to shareholders. We also made continued progress on our strategic initiatives designed to accelerate growth and increase profitability.”

Fiscal 2026 First Quarter Summary

Consolidated net sales of $943 million, an increase of 0.6% compared to the prior year;
Consolidated comparable sales were flat;
Global e-commerce sales of $111 million, representing 11.7% of net sales;
GAAP gross margin expansion of 40 basis points to 51.2%;
Adjusted Gross Margin expansion of 50 basis points to 51.3%;
GAAP selling, general and administrative expenses of $407 million, an increase of $31 million compared to the prior year;
Adjusted Selling, General and Administrative Expenses of $404 million, an increase of $6 million compared to the prior year;
GAAP operating earnings of $76 million and GAAP operating margin of 8.1%;
Adjusted Operating Earnings of $80 million and Adjusted Operating Margin of 8.5%;
GAAP diluted net earnings per share of $0.45, a decrease of 22% compared to the prior year;
Adjusted Diluted Net Earnings Per Share of $0.48, an increase of 12% compared to the prior year;
Cash flow from operations of $93 million and Free Cash Flow of $57 million; and
Completed $20 million in term loan repayment and $21 million in share repurchases.

Balance Sheet and Cash Flow

As of December 31, 2025, the Company had cash and cash equivalents of $157 million and no outstanding borrowings under its asset-based revolving line of credit. At fiscal year-end, inventory was $979 million, down 2.7% versus a year ago.

First quarter cash flow from operations was $93 million and Free Cash Flow totaled $57 million. During the first quarter, the Company utilized its cash flow to repay $20 million of term loan B debt and repurchase 1.4 million shares under its share repurchase program at an aggregate cost of $21 million. The Company ended the first quarter with a net debt leverage ratio of 1.5x.

Fiscal 2026 First Quarter Segment Results

	Sally Beauty		Beauty Systems Group
(In thousands, except percentages)	Q1 FY26	Q1 FY25	Growth/(Decline)		Q1 FY26	Q1 FY25	Growth/(Decline)
Net Sales	$	531,601		$	525,446		1.2	%		$	411,567		$	412,449		(0.2	)%
Comparable Sales Growth/(Decline)	0.1	%		1.7	%	(160) bps			(0.2	)%		1.4	%	(160) bps
Gross Margin		59.8	%		59.6	%	20 bps			40.2	%		39.7	%	50 bps
Operating Earnings	$	77,897		$	79,874		(2.5	)%		$	53,907		$	50,469		6.8	%
Operating Margin		14.7	%		15.2	%	(50) bps			13.1	%		12.2	%	90 bps

Fiscal Year 2026 Guidance*

Second Quarter
Consolidated Net Sales	$895 million to $905 million (1)
Comparable Sales	Up 0.5% to 1.5%
Adjusted Operating Earnings	$68 million to $71 million
Adjusted Diluted EPS	$0.39 to $0.42
(1) Assumes approximately 100 basis points of favorable impact from expected foreign currency rates

Full Year	Prior FY26 Guidance	Updated FY26 Guidance
Consolidated Net Sales	$3.71 billion to $3.77 billion (1)	No change
Comparable Sales	Flat to up 1%	No change
Adjusted Operating Earnings	$328 million to $342 million	No change
Adjusted Diluted EPS	$2.00 to $2.10 (2)	$2.02 to $2.10 (2)
Capital Expenditures	Approximately $100 million	No change
Free Cash Flow	Approximately $200 million	No change
(1) Assumes approximately 50 basis points of favorable impact from expected foreign currency rates
(2) Assumes 50% of Free Cash Flow goes towards share repurchases (Free Cash Flow defined as GAAP cash flows from operating activities less payments for capital expenditures)

The Company does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of its reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of the Company’s control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Conference Call and Where You Can Find Additional Information

The Company will hold a conference call and live webcast at approximately 7:30 a.m. Central Time today, February 9, 2026, to discuss its financial results and its business. During the conference call, the Company may discuss and answer one or more questions concerning business and financial matters and trends affecting the Company. The Company’s responses to these questions, as well as other matters discussed during the conference call, may contain or constitute material information that has not been previously disclosed.

Participants can listen to the live webcast of the conference call by accessing the investor relations section of the Company’s website at sallybeautyholdings.com/investor-relations/events-and-presentations/events-calendar, or through our third-party host at SBH Q1 Earnings Webcast. To join the conference call, participants can pre-register to receive a dial-in number and unique PIN using the following link: Pre-register SBH Q1 Earnings Call. Pre-registration can be completed at any time up to and following the call start time.

A replay will be available on the Company’s investor relations website after 10:00 a.m. Central Time on February 9, 2026, through February 9, 2027.

About Sally Beauty Holdings, Inc.

Sally Beauty Holdings, Inc. (NYSE: SBH), as the leader in professional hair color, sells and distributes professional beauty supplies globally through its Sally Beauty and Beauty Systems Group segments. Sally Beauty stores offer up to 7,000 products for hair color, hair care, nails, and skin care through proprietary brands such as Ion®, Bondbar®, Strawberry Leopard®, Generic Value Products®, Inspired by Nature® and Silk Elements® as well as professional lines such as Wella®, Clairol®, OPI®, L’Oreal®, Wahl® and Babyliss Pro®. Beauty Systems Group stores, branded as Cosmo Prof® or Armstrong McCall® stores, along with its outside sales consultants, sell up to 8,000 professionally branded products including Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico®, Amika® and Moroccanoil®, intended for use in salons and for resale by salons to retail consumers. For more information about Sally Beauty Holdings, Inc., please visit sallybeautyholdings.com/investor-relations.

Cautionary Notice Regarding Forward-Looking Statements

Statements in this news release and the schedules hereto that are not purely historical facts or that depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of words such as “believes,” “projects,” “expects,” “can,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “will,” “would,” “anticipates,” “potential,” “confident,” “optimistic,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters.

Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including the “Risk Factors” described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, and other filings with the U.S. Securities and Exchange Commission. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements.

Use of Non-GAAP Financial Measures

This news release and the schedules hereto include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States, (“GAAP”), and are therefore referred to as non-GAAP financial measures: (1) Adjusted Gross Margin; (2) Adjusted Selling, General and Administrative Expenses; (3) Adjusted EBITDA and EBITDA Margin; (4) Adjusted Operating Earnings and Operating Margin; (5) Adjusted Net Earnings; (6) Adjusted Diluted Net Earnings Per Share; and (7) Free Cash Flow. We have provided definitions below for these non-GAAP financial measures and have provided tables in the schedules hereto to reconcile these non-GAAP financial measures to the comparable GAAP financial measures.

Adjusted Gross Margin – We define the measure Adjusted Gross Margin as GAAP gross margin excluding the inventory write-off from the Company’s European operations in connection with the fuel for growth initiative for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Adjusted Selling, General and Administrative Expenses – We define the measure Adjusted Selling, General and Administrative Expenses as GAAP selling, general and administrative expenses excluding the costs related to the Company’s fuel for growth initiative and expenses related to the Company’s corporate headquarters relocation for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Adjusted EBITDA and EBITDA Margin – We define the measure Adjusted EBITDA as GAAP net earnings before depreciation and amortization, interest expense, income taxes, share-based compensation, costs related to the Company’s fuel for growth initiative and expenses related to the Company’s corporate headquarters relocation for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of net sales.

Adjusted Operating Earnings and Operating Margin – Adjusted operating earnings are GAAP operating earnings that exclude the costs related to the Company’s fuel for growth initiative and expenses related to the Company’s corporate headquarters relocation for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Operating Margin is Adjusted Operating Earnings as a percentage of net sales.

Adjusted Net Earnings – Adjusted net earnings is GAAP net earnings that exclude the tax-effected costs related to the Company’s fuel for growth initiative and tax-effected expenses related to the Company’s corporate headquarters relocation for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Adjusted Diluted Net Earnings Per Share – Adjusted diluted net earnings per share is GAAP diluted earnings per share that exclude the tax-effected costs related to the Company’s fuel for growth initiative and tax-effected expenses related to the Company’s corporate headquarters relocation for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Free Cash Flow – We define the measure Free Cash Flow as GAAP net cash provided by operating activities less payments for capital expenditures (net). We believe Free Cash Flow is an important liquidity measure that provides useful information to investors about the amount of cash generated from operations after taking into account payments for capital expenditures (net).

We believe that these non-GAAP financial measures provide valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry.

We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and Board of Directors also use these non-GAAP measures as supplemental measures to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe that these non-GAAP measures also provide meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. These non-GAAP measures should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies.

Supplemental Schedules
Segment Information	1
Non-GAAP Financial Measures Reconciliations	2
Non-GAAP Financial Measures Reconciliations; Adjusted EBITDA and
Free Cash Flow	3
Store Count and Comparable Sales	4


SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except per share data)
(Unaudited)


	Three Months Ended December 31,
		2025				2024		Percentage Change

Net sales	$	943,168			$	937,895		0.6	%
Cost of products sold		459,909				461,055		(0.2	)%
Gross profit		483,259				476,840		1.3	%
Selling, general and administrative expenses		407,324				376,520		8.2	%
Operating earnings		75,935				100,320		(24.3	)%
Interest expense		14,620				17,442		(16.2	)%
Earnings before provision for income taxes		61,315				82,878		(26.0	)%
Provision for income taxes		15,758				21,865		(27.9	)%
Net earnings	$	45,557			$	61,013		(25.3	)%

Earnings per share:
Basic	$	0.47			$	0.60		(21.7	)%
Diluted	$	0.45			$	0.58		(22.4	)%

Weighted average shares:
Basic		97,804				102,021
Diluted		100,765				104,974
				Basis Point Change
Comparison as a percentage of net sales
Consolidated gross margin		51.2	%			50.8	%	40
Selling, general and administrative expenses		43.2	%			40.1	%	310
Consolidated operating margin		8.1	%			10.7	%	(260	)

Effective tax rate		25.7	%			26.4	%	(70	)


SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

	December 31		September 30
	2025		2025

Cash and cash equivalents	$	157,185		$	149,162
Trade and other accounts receivable		104,267			116,562
Inventory		978,789			987,575
Other current assets		45,444			48,154
Total current assets		1,285,685			1,301,453
Property and equipment, net		280,350			284,284
Operating lease assets		642,276			646,698
Goodwill and other intangible assets		593,929			593,692
Other assets		48,538			44,969
Total assets	$	2,850,778		$	2,871,096

Current maturities of long-term debt	$	4,000		$	4,000
Accounts payable		208,481			224,507
Accrued liabilities		158,576			184,641
Current operating lease liabilities		157,102			158,566
Income taxes payable		14,011			4,260
Total current liabilities		542,170			575,974
Long-term debt, including capital leases		842,531			861,974
Long-term operating lease liabilities		537,594			538,426
Other liabilities		21,985			21,026
Deferred income tax liabilities, net		82,933			79,489
Total liabilities		2,027,213			2,076,889
Total stockholders’ equity		823,565			794,207
Total liabilities and stockholders’ equity	$	2,850,778		$	2,871,096


			Supplemental Schedule 1
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Segment Information
(In thousands)
(Unaudited)


	Three Months Ended December 31,
		2025			2024		Percentage Change
Net sales:
Sally Beauty Supply ("Sally")	$	531,601		$	525,446		1.2	%
Beauty Systems Group ("BSG")		411,567			412,449		(0.2	)%
Total net sales	$	943,168		$	937,895		0.6	%

Operating earnings:
Sally	$	77,897		$	79,874		(2.5	)%
BSG		53,907			50,469		6.8	%
Segment operating earnings		131,804			130,343		1.1	%

Unallocated expenses (1)		55,869			30,023		86.1	%
Interest expense		14,620			17,442		(16.2	)%
Earnings before provision for income taxes	$	61,315		$	82,878		(26.0	)%


Segment gross margin:		2025			2024		Basis Point Change
Sally		59.8	%		59.6	%	20
BSG		40.2	%		39.7	%	50

Segment operating margin:
Sally		14.7	%		15.2	%	(50	)
BSG		13.1	%		12.2	%	90
Consolidated operating margin		8.1	%		10.7	%	(260	)


(1) Unallocated expenses, including share-based compensation expense, consist of corporate and shared costs and are included in selling, general and administrative expenses. Additionally, unallocated expenses include costs associated with our Fuel for Growth initiative and a gain from the sale of our corporate headquarters during the three months ended December 31, 2024.


				Supplemental Schedule 2
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations
(In thousands, except per share data)
(Unaudited)


	Three Months Ended December 31, 2025
	As Reported (GAAP)		Fuel for Growth and Other (1)	Corporate HQ Relocation (2)		As Adjusted (Non-GAAP)

Cost of products sold	$	459,909		$	(907	)	$	—		$	459,002
Consolidated gross margin		51.2	%					51.3	%
Selling, general and administrative expenses		407,324			(1,180	)		(1,833	)		404,311
SG&A expenses, as a percentage of sales		43.2	%					42.9	%
Operating earnings		75,935			2,087			1,833			79,855
Operating margin		8.1	%					8.5	%
Interest expense		14,620			—			—			14,620
Earnings before provision for income taxes		61,315			2,087			1,833			65,235
Provision for income taxes (3)		15,758			529			471			16,758
Net earnings	$	45,557		$	1,558		$	1,362		$	48,477

Earnings per share: (4)
Basic	$	0.47		$	0.02		$	0.01		$	0.50
Diluted	$	0.45		$	0.02		$	0.01		$	0.48

	Three Months Ended December 31, 2024
	As Reported (GAAP)		Fuel for Growth and Other (1)	Corporate HQ Relocation (2)		As Adjusted (Non-GAAP)

Cost of products sold	$	461,055		$	—		$	—		$	461,055
Consolidated gross margin		50.8	%					50.8	%
Selling, general and administrative expenses		376,520			(4,869	)		26,640			398,291
SG&A expenses, as a percentage of sales		40.1	%					42.5	%
Operating earnings		100,320			4,869			(26,640	)		78,549
Operating margin		10.7	%					8.4	%
Interest expense		17,442			—			—			17,442
Earnings before provision for income taxes		82,878			4,869			(26,640	)		61,107
Provision for income taxes (3)		21,865			1,247			(6,851	)		16,261
Net earnings	$	61,013		$	3,622		$	(19,789	)	$	44,846

Earnings per share: (4)
Basic	$	0.60		$	0.04		$	(0.19	)	$	0.44
Diluted	$	0.58		$	0.03		$	(0.19	)	$	0.43

(1) Fuel for Growth and other represents expenses primarily related expenses associated with our Fuel for Growth program and other non-recurring items.

(2) For the three months ended December 31, 2025, corporate HQ relocation primarily represents duplicate rent expense on the new office prior to our relocation from our Denton corporate headquarters and expenses in connection with the relocation of our headquarters. For the three months ended December 31, 2024, corporate HQ relocation primarily represents the gain on the sale of our Denton corporate headquarters and certain assets within.

(3) The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized.

(4) The sum of the earnings per share may not equal the full amount due to rounding of the calculated amounts.


			Supplemental Schedule 3

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations, Continued
(In thousands)
(Unaudited)


	Three Months Ended December 31,
Adjusted EBITDA:		2025				2024		Percentage Change

Net earnings	$	45,557			$	61,013		(25.3	)%
Add:
Depreciation and amortization		23,632				25,565		(7.6	)%
Interest expense		14,620				17,442		(16.2	)%
Provision for income taxes		15,758				21,865		(27.9	)%
EBITDA (non-GAAP)		99,567				125,885		(20.9	)%
Share-based compensation		7,555				6,053		24.8	%
Fuel for Growth and Other		2,087				4,869		(57.1	)%
Corporate HQ Relocation		1,833				(26,640	)	106.9	%
Adjusted EBITDA (non-GAAP)	$	111,042			$	110,167		0.8	%

				Basis Point Change
Adjusted EBITDA as a percentage of net sales
Adjusted EBITDA margin		11.8	%			11.7	%	10


Free Cash Flow:		2025				2024		Percentage Change
Cash flows from operating activities	$	93,239			$	33,459		178.7	%

Less:Payments for capital expenditures		35,784				20,078		78.2	%
Plus:Proceeds from sales of property and equipment (1)		—				43,574		—
Free cash flow (non-GAAP)	$	57,455			$	56,955		0.9	%

(1) Represents the proceeds from the sale of our corporate headquarters.

		Supplemental Schedule 4

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Store Count and Comparable Sales
(Unaudited)


	As of December 31,
	2025		2024		Change

Number of stores:
Sally	3,090			3,123		(33	)
BSG:
Company-operated stores	1,194			1,199		(5	)
Franchise stores	131			131		—
Total BSG	1,325			1,330		(5	)
Total consolidated	4,415			4,453		(38	)

Number of BSG salon business consultants (1)	590			639		(49	)

(1) BSG salon business consultants (SBC) include 182 and 191 sales consultants employed by our franchisees at December 31, 2025 and 2024, respectively.
	Three Months Ended December 31,
	2025		2024		Basis Point Change
Comparable sales growth (decline):
Sally	0.1	%		1.7	%	(160	)
BSG	(0.2	)%		1.4	%	(160	)
Consolidated	0.0	%		1.6	%	(160	)


Our comparable sales include sales from stores that have been operating for 14 months or longer as of the last day of a month and e-commerce revenue. Additionally, our comparable sales include sales to franchisees and full-service sales. Our comparable sales amounts exclude the effect of changes in foreign exchange rates and sales from stores relocated until 14 months after the relocation. Revenue from acquired stores is excluded from our comparable sales calculation until 14 months after the acquisition.