Investor caution ahead of Nvidia earnings "understandable," Barclays says
DENTON, Texas - On Thursday, Sally Beauty Holdings, Inc. (NYSE:SBH) reported fourth-quarter results that exceeded analyst expectations and provided an optimistic outlook for fiscal 2026.
The professional hair color leader’s shares surged 11.38% in pre-market trading after the results.
The company posted adjusted earnings of $0.55 per share for the quarter ended September 30, 2025, significantly beating the analyst consensus of $0.45. Revenue reached $947 million, surpassing the expected $932.46 million and representing a 1.3% increase YoY. Consolidated comparable sales also grew 1.3%.
"We concluded the year with fourth quarter results that exceeded our expectations, highlighted by solid topline growth and healthy gross margins that drove 10% adjusted EPS growth and robust free cash flow," said Denise Paulonis, president and chief executive officer.
Gross margin expanded 100 basis points to 52.2%, while adjusted operating earnings reached $89 million with a 9.4% operating margin. The company generated $121 million in cash flow from operations and $78 million in free cash flow during the quarter.
For fiscal 2026, Sally Beauty expects adjusted earnings per share of $2.00-$2.10, well above the analyst consensus of $1.82. The company projects revenue between $3.71-$3.77 billion, exceeding the consensus estimate of $3.69 billion.
"As we enter fiscal 2026, we are emboldened by our resilient customers, defensible core categories and strategic initiatives built to drive growth and increase profitability," Paulonis added.
The company also introduced long-term financial targets through fiscal 2028, including annual consolidated net sales growth of 1-3%, adjusted operating earnings growth of 3-5%, and adjusted EPS growth exceeding 10% annually.
During the fourth quarter, Sally Beauty repaid $21 million of term loan debt and repurchased 1.7 million shares for $20 million. The company ended fiscal 2025 with a net debt leverage ratio of 1.6x and cash and cash equivalents of $149 million.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.