Sally Beauty Reports Slight Increase in Net Sales but Decline in Earnings for December 2025 Quarter

Sally Beauty Holdings, Inc. reported its financial results for the three months ended December 31, 2025, revealing a slight increase in consolidated net sales to $943.2 million, up 0.6% from $937.9 million in the same period last year. The company’s gross profit also saw a modest rise, increasing by $6.4 million to $483.3 million, resulting in a gross margin of 51.2%, a 40 basis point improvement compared to the prior year. However, operating earnings decreased significantly by 24.3% to $75.9 million, reflecting a decline in operating margin to 8.1%. Net earnings fell by 25.3% to $45.6 million, with diluted earnings per share at $0.45, down from $0.58 a year earlier.

The company experienced a flat performance in comparable sales, which did not change year-over-year. The increase in net sales was attributed to favorable foreign currency exchange rates, which positively impacted sales by $8.5 million. However, the company faced challenges, including a decrease in transactions and external factors affecting consumer spending, such as the U.S. government shutdown and the exit from full-service operations in Europe. The Sally segment reported a slight increase in sales, while the BSG segment experienced a minor decline.

Operationally, Sally Beauty's total number of stores decreased to 4,415 from 4,453 a year ago, with the Sally segment closing 33 stores and BSG closing five. The company’s cash flow from operations improved significantly, reaching $93.2 million compared to $33.5 million in the previous year, driven by better management of accounts payable and lower income taxes paid. The company also repurchased 1.4 million shares of its common stock for $20.7 million during the quarter, reflecting its ongoing commitment to return value to shareholders.

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 improving operational efficiencies, particularly through its Fuel for Growth initiative, which aims to drive profitability and market share. Despite the challenges faced in the current fiscal period, management is optimistic about the potential for future growth and stability in the beauty supply market.