Sally Beauty Holdings, Inc. reported a consolidated net sales increase of $20.2 million, or 2.3%, for the three months ended March 31, 2026, reaching $903.4 million compared to $883.1 million in the same period last year. The growth was bolstered by a favorable impact of $12.8 million from foreign currency exchange rates. The company's gross profit also rose by $17 million, or 3.7%, to $475.8 million, resulting in a gross margin improvement of 70 basis points to 52.7%. Operating earnings for the quarter increased by $2.6 million, or 3.7%, to $71.9 million, while net earnings rose by $3.5 million, or 8.9%, to $42.7 million, translating to diluted earnings per share of $0.43, up from $0.38 a year earlier.
In comparison to the previous fiscal period, Sally Beauty's financial performance showed mixed results. While net sales and gross profit increased, the company experienced a decline in comparable sales growth, which was reported at 1.3% for the quarter. The increase in selling, general, and administrative expenses was notable, rising by $14.4 million, or 3.7%, primarily due to higher labor costs and increased expenses related to digital marketplaces. The company also reported a decrease in operating earnings for the six months ended March 31, 2026, down to $147.9 million from $169.7 million in the prior year.
Strategically, Sally Beauty has focused on enhancing its product offerings and operational efficiency. The company has continued to implement its "Fuel for Growth" initiative, which aims to improve product margins and streamline operations. This initiative has contributed to the gross margin improvements reported in the latest quarter. Additionally, Sally Beauty has been active in share repurchases, buying back 3.0 million shares for $46 million during the six months ended March 31, 2026, compared to 1.8 million shares for $20 million in the same period last year.
Operationally, the company reported a total of 4,399 stores at the end of the quarter, a decrease of 47 stores from the previous year. The Sally segment, which includes retail stores and digital platforms, accounted for $521.2 million in net sales, while the BSG segment generated $382.1 million. The company noted that the decline in store count was partially due to strategic closures and the exit from low-margin operations in Europe. Despite these challenges, Sally Beauty's cash flow from operations improved significantly, reaching $166.5 million for the six months ended March 31, 2026, compared to $84.5 million in the prior year.
Looking ahead, Sally Beauty anticipates that its existing cash balances, along with cash generated from operations and available funds under its asset-based lending facility, will be sufficient to meet its working capital and capital expenditure needs over the next twelve months. The company remains focused on enhancing its product offerings and operational efficiencies while navigating market conditions that may impact consumer behavior.
About Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc. is a global retailer and distributor of professional beauty supplies, specializing in hair color, care, styling tools, nails, and cosmetics. Operating through retail stores, e-commerce, and wholesale channels, it serves both consumers and salon professionals. The company emphasizes product innovation, owned brands, customer education, and a strong digital presence to differentiate in a competitive, fragmented industry.
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