Sally Beauty Holdings (SBH) Q2 2026 earnings summary

Executive summary

• Q2 fiscal 2026 net sales rose 2.3% year-over-year to $903–$903.4 million, with comparable sales up 1.3% and a $12.8 million FX benefit.

• Adjusted operating income was $73 million and adjusted diluted EPS was $0.44, both above guidance; GAAP diluted EPS was $0.43, up 13%.

• Cash flow from operations reached $73–$73.3 million, enabling $20 million in debt paydown and $25 million in share repurchases.

• E-commerce sales grew 13% year-over-year, now 12% of total net sales, with digital and product innovation driving segment growth.

• Net earnings for the quarter were $42.7 million, up 8.9% year-over-year.

Financial highlights

• Consolidated gross margin expanded 70–80 bps to 52.7–52.8%; adjusted SG&A was $404 million, up year-over-year.

• Free cash flow was $44 million; cash and equivalents at quarter end were $157–$157.4 million.

• Six-month net sales reached $1.85 billion, up 1.4% year-over-year.

• Operating margin for the quarter was 8.0%, up 10 bps year-over-year.

• Inventory at quarter-end was $987 million, down 2% year-over-year.

Outlook and guidance

• FY26 net sales expected between $3.725 billion and $3.75 billion, with 50 bps FX benefit.

• Comparable sales expected to be flat to up 1%; adjusted operating earnings forecasted at $328–$342 million; adjusted diluted EPS at $2.02–$2.10.

• Q3 net sales guidance: $932–$942 million; adjusted EPS: $0.52–$0.56.

• FY26 free cash flow expected at ~$200 million; capex expected at $100 million.

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