Sally Beauty (SBH) Delivers Better-Than-Expected Q4 Performance

Sally Beauty Holdings, Inc. (NYSE: SBH) has reported a robust performance for the fourth quarter of fiscal 2025, exceeding market expectations with significant growth in both earnings per share (EPS) and revenue. The company continues to demonstrate strong financial health and strategic execution.

EPS Jumps 10% as Revenue and Margins Improve

In the fourth quarter of fiscal 2025, Sally Beauty Holdings, Inc. (NYSE: SBH) achieved notable financial results, surpassing market expectations. The company reported an adjusted diluted EPS of $0.55, a 10% increase from the previous year, and a revenue of $947 million, reflecting a 1.3% growth compared to the prior year. These figures exceeded the anticipated EPS of $0.49 and projected revenue of $933 million, marking a successful quarter for the company.

The company’s consolidated net sales for Q4 showed a 1.3% increase, with comparable sales also rising by the same percentage. This growth was driven by strong performance in both the Sally Beauty Supply and Beauty Systems Group segments. The global e-commerce sales contributed $105 million, representing 11.1% of the total net sales, highlighting the company’s expanding digital footprint.

The gross margin for the quarter expanded by 100 basis points to 52.2%, reflecting improved operational efficiency and cost management. Despite an increase in selling, general, and administrative expenses, the company maintained a healthy operating margin of 8.4%. The adjusted operating earnings were reported at $89 million, with an adjusted operating margin of 9.4%, underscoring the company’s effective strategic execution.

Join our Telegram group and never miss a breaking digital asset story.

Sally Beauty Targets EPS Growth and Strong Free Cash Flow Next Year

Looking ahead, Sally Beauty Holdings has provided guidance for fiscal 2026, projecting consolidated net sales between $3.71 billion and $3.77 billion. The company expects comparable sales to remain flat or increase by up to 1%, indicating cautious optimism in a competitive market. Adjusted operating earnings are anticipated to range from $328 million to $342 million, with an adjusted diluted EPS forecasted between $2.00 and $2.10.

The company’s capital expenditure is projected to be approximately $100 million, with free cash flow expected to reach around $200 million. This financial outlook reflects Sally Beauty Holdings’ commitment to investing in growth initiatives while maintaining a strong balance sheet. Notably, the company plans to allocate 50% of its free cash flow towards share repurchases, demonstrating confidence in its long-term value proposition.

In its long-term outlook, Sally Beauty Holdings aims for annual consolidated net sales growth of 1% to 3%, adjusted operating earnings growth of 3% to 5%, and adjusted diluted EPS growth of over 10%. The company remains focused on strategic initiatives to enhance profitability and shareholder value, positioning itself for sustained success in the years to come.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.