Sally Beauty Holdings reported fourth‑quarter 2025 results that exceeded analyst expectations, with net sales rising 1.3% year‑over‑year to $947.1 million and adjusted earnings per share climbing to $0.55, a $0.06 (12.2%) beat over the consensus estimate of $0.49. The revenue lift was driven by robust demand in both the Sally Beauty Supply and Beauty Systems Group segments, as well as a favorable product‑mix shift toward higher‑margin hair‑color and professional‑grade items that offset modest pressure in legacy categories.
Segment‑level data show Sally Beauty Supply generated $541.56 million in net sales while Beauty Systems Group contributed $405.5 million. Both segments posted margin expansion, with the company’s adjusted gross margin reaching 52.2%—up from 51.0% a year earlier—thanks to the Fuel for Growth program’s cost‑saving initiatives and improved pricing power in key product lines.
Operating performance improved markedly: adjusted operating margin grew to 9.4% from 8.5% a year ago, reflecting disciplined cost management and operational leverage as revenue expanded. Cash generation remained strong, with operating cash flow of $121 million and free cash flow of $78 million, underscoring the company’s ability to convert sales into liquidity.
The balance sheet strengthened further, with cash and cash equivalents at $149 million, a $21 million repayment of term‑loan B debt, and a share‑repurchase of 1.7 million shares for $20 million. Net debt leverage settled at 1.6×, indicating a solid debt‑to‑cash position and a focus on returning value to shareholders.
Looking ahead, Sally Beauty guided fiscal 2026 net sales growth of 1%–3%, adjusted operating earnings growth of 3%–5%, and adjusted EPS growth of 10%+. The company also projected free cash flow of approximately $200 million for the year, signaling confidence in continued demand, cost discipline, and the execution of its growth initiatives.
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