Sally Beauty Holdings (SBH) Q1 2026 earnings summary

Executive summary

• Q1 net sales rose 0.6% year-over-year to $943.2 million, with a positive $8.5 million impact from foreign currency exchange rates and e-commerce representing 11.7% of net sales.

• Adjusted diluted EPS increased 12% to $0.48, while GAAP diluted EPS fell 22% to $0.45; adjusted operating income and EPS were at the high end of guidance.

• Cash flow from operations reached $93 million, supporting $20 million in debt repayment and $21 million in share repurchases.

• Exited most lower-margin full-service operations in Europe, focusing on core store and omnichannel businesses.

• Operating earnings declined 24.3% to $75.9 million, and net earnings decreased 25.3% to $45.6 million.

Financial highlights

• Consolidated comparable sales were flat year-over-year; Sally U.S. and Canada comps up 1.3%, BSG down 0.2%.

• Global e-commerce sales rose 11% to $111 million, representing 12% of total net sales.

• Adjusted gross margin expanded 50 bps to 51.3%; GAAP gross margin up 40 bps to 51.2%.

• Adjusted operating income was $80 million (8.5% margin); GAAP operating earnings $76 million (8.1% margin).

• Free cash flow was $57 million; inventory at quarter-end was $979 million, down 2.7% year-over-year.

Outlook and guidance

• Raised low end of full-year adjusted EPS guidance to $2.02–$2.10; net sales expected at $3.71–$3.77 billion.

• Q2 net sales expected at $895–$905 million; comparable sales up 0.5–1.5%; adjusted EPS $0.39–$0.42.

• Capital expenditures projected at $100–$200 million; free cash flow at ~$200 million.

• Store count to remain flat with 40 openings, 40 closures, and 50 relocations.

• Management expects existing cash, cash flow from operations, and available credit to be sufficient for working capital and capital expenditures over the next twelve months.