Sally Beauty Holdings (SBH) Q2 2026 earnings summary

Executive summary

• Second quarter fiscal 2026 net sales reached $903.4 million, up 2.3% year-over-year, with comparable sales growth of 1.3% and a $12.8 million positive FX impact.

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

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

• Sally segment showed resilience, with U.S. and Canada comparable sales up 4.4% and strong performance in color and nail categories.

• BSG segment delivered improved profitability with operating margin up 90 basis points to 12.4% on flat sales.

Financial highlights

• Consolidated net sales grew 2.3% year-over-year to $903.4 million, including 150 basis points of favorable FX impact.

• Global e-commerce sales rose 13% to $108 million, representing 12% of total net sales.

• Adjusted gross margin expanded 80 basis points to 52.8%, driven by higher product margin and Fuel for Growth program benefits.

• Adjusted SG&A was $404 million, up $14 million year-over-year, mainly due to labor, rent, and FX.

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

Outlook and guidance

• Full-year consolidated net sales expected between $3.725 billion and $3.750 billion, with comparable sales flat to up 1%.

• Adjusted operating earnings forecasted at $328 million-$342 million; adjusted diluted EPS at $2.02-$2.10.

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

• FY26 free cash flow expected at ~$200 million; capital expenditures projected at $100 million.

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