SBH · Sally Beauty Holdings, Inc.

Sally Beauty Holdings reported solid second quarter fiscal 2026 results, with consolidated net sales increasing 2.3% to $903 million, driven by 1.3% comparable sales growth and strong e-commerce performance (up 13% to $108 million, representing 12% of net sales). The Sally Beauty segment led with 4.1% sales growth and 2.5% comparable sales growth, while Beauty Systems Group sales were flat with a slight comparable sales decline of 0.3%. Gross margin expanded 70 basis points on a GAAP basis and 80 basis points on an adjusted basis to 52.8%, reflecting the benefits of the company's growth initiatives and operational efficiencies. GAAP operating earnings rose to $72 million (8.0% margin), and adjusted operating earnings reached $73 million (8.1% margin). GAAP diluted EPS increased 13% to $0.43, while adjusted diluted EPS grew 5% to $0.44. Cash flow from operations was $73 million, with free cash flow of $44 million. The company used cash to repay $20 million of term loan debt and repurchase $25 million in shares (1.7 million shares). Management expressed confidence in the full-year outlook, tightening net sales guidance to $3.725-$3.750 billion (from $3.71-$3.77 billion) while reiterating all other metrics including adjusted operating earnings of $328-$342 million and adjusted diluted EPS of $2.02-$2.10. For the third quarter, the company expects net sales of $932-$942 million, approximately flat comparable sales, adjusted operating earnings of $83-$89 million, and adjusted diluted EPS of $0.52-$0.56. The results demonstrate resilience in a dynamic macroeconomic environment, with growth initiatives driving margin expansion and strong cash generation.