Sally Beauty Q4 Earnings Beat Estimates, Sales Increase Y/Y

Sally Beauty Holdings, Inc. (SBH) reported fourth-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.

SBH’s Q4 Performance: Key Metrics and Insights

Sally Beauty’s adjusted earnings were 55 cents per share, which came above the Zacks Consensus Estimate of 49 cents. The metric increased 10% from 50 cents per share in the year-ago period.

Sally Beauty Holdings, Inc. Price, Consensus and EPS Surprise

Sally Beauty Holdings, Inc. price-consensus-eps-surprise-chart | Sally Beauty Holdings, Inc. Quote

The company reported consolidated net sales of $947.1 million, which beat the Zacks Consensus Estimate of $933 million. The metric increased 1.3% from $935 million posted in the year-ago period. Consolidated comparable sales increased 1.3% year over year.

Global e-commerce sales totaled $105 million, representing 11.1% of consolidated net sales for the quarter.

Sally Beauty’s Margin & Cost Details

The company’s gross profit increased 3.1% year over year to $494.1 million, with the gross margin expanding 100 basis points to 52.2%. Adjusted selling, general and administrative expenses rose to $405.3 million, up $14 million from last year. As a percentage of sales, adjusted SG&A stood at 42.8% compared with 41.8% a year earlier.

Adjusted operating earnings were $88.6 million, up from $88 million in the year-ago quarter. The adjusted operating margin was flat at 9.4%.

Adjusted EBITDA was $117.4 million, representing a drop of 0.6% from the previous year. The adjusted EBITDA margin decreased 20 basis points year over year to 12.4%.

SBH’s Sales Insights by Segments

Sally Beauty Supply: Net sales in this segment rose 1.4% year over year to $541.6 million. Comparable sales grew 1.2%, though operating margin fell 150 basis points to 15.9%. The segment’s gross margin expanded 90 basis points to 61.3%.

Beauty Systems Group: Net sales climbed 1.1% to $405.5 million. Comparable sales improved 1.4%, while the operating margin expanded 160 basis points to 12.6%, supported by a 100-basis-point improvement in gross margin to 40%.

Sally Beauty’s Financial Health Snapshot

SBH ended the fiscal fourth quarter with cash and cash equivalents of $149.2 million, long-term debt, including capital leases, of $862 million and total stockholders’ equity of $794.2 million.

In the fiscal fourth quarter, the company provided cash flow from operations of $121 million. The operating free cash flow was $78 million.

In the quarter, the company paid $21 million of term loan and repurchased shares under its share repurchase program for a total cost of $20 million.

What to Expect From SBH in the Future?

Management introduced its fiscal 2026 guidance, projecting comparable sales to be flat to up 1% year over year. Consolidated net sales are expected to be between $3.71 billion and $3.77 billion, while adjusted operating earnings are forecasted between $328 million and $342 million. The company anticipates adjusted earnings per share in the range of $2.00 to $2.10 for the fiscal year.

This Zacks Rank #3 (Hold) stock has gained 10.5% in the past three months against the industry’s decline of 9.5%.

Stocks to Consider

Ulta Beauty, Inc. (ULTA) operates as a specialty beauty retailer in the United States, Mexico and Kuwait. At present, Ulta Beauty sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Ulta Beauty’s current fiscal-year sales implies growth of 6.8%, from the year-ago figures. ULTA delivered a trailing four-quarter earnings surprise of 16.3%, on average.

Five Below, Inc. (FIVE) operates as a specialty value retailer in the United States. It sports a Zacks Rank #2 (Buy) at present. Five Below delivered a trailing four-quarter earnings surprise of 50.5%, on average.

The Zacks Consensus Estimate for Five Below’s current fiscal-year sales and earnings implies an increase of 16.2% and 1.2%, respectively, from the prior-year levels.

Dollar General Corporation (DG), a discount retailer, provides various merchandise products in the southern, southwestern, midwestern and eastern United States. It carries a Zacks Rank #2 at present. Dollar General delivered a trailing four-quarter earnings surprise of 11.3%, on average.

The Zacks Consensus Estimate for Dollar General’s current fiscal-year sales and earnings implies an increase of 4.7% and 3.6%, respectively, from the prior-year levels.

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This article originally published on Zacks Investment Research (zacks.com).

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