Sally Beauty Restores Fourth-Quarter Comparable Sales Growth

The Tip Desk · November 11, 2026 · 3 min read

Fourth-quarter net sales were $953 million and comparable sales rose 0.9% after a flat third quarter.

Sally Beauty Holdings, Inc. (SBH), the professional hair color retailer, reported fourth-quarter net sales of $953 million, up 0.6% from a year earlier, with comparable sales growth of 0.9% after the third quarter’s comparable sales were flat.

GAAP diluted earnings were $0.60 a share, up 22%, and adjusted diluted earnings were $0.62 a share, up 13%. GAAP operating earnings were $92 million and GAAP operating margin was 9.7%, up 130 basis points. Adjusted operating earnings were $95 million and adjusted operating margin was 10.0%, up 60 basis points. GAAP gross margin was 51.9%, down 30 basis points.

President and Chief Executive Officer Denise Paulonis said the company finished fiscal 2026 with positive momentum, delivering fourth-quarter sales, operating earnings and double-digit adjusted EPS growth.

Global e-commerce sales increased 8% to $113 million, representing 12% of net sales.

Sally Beauty Supply, the retail segment, posted net sales of $550.3 million, up 1.6%, with comparable sales growth of 2.0%, an 80-basis-point increase from the prior-year quarter. Operating earnings were $88.4 million, up 2.6%, and operating margin was 16.1%, up 20 basis points. Gross margin in the segment was 60.6%.

Beauty Systems Group, the salon and professional distribution segment, recorded net sales of $402.2 million, down 0.8%, with comparable sales of (0.6)%, a 200-basis-point decline from the prior-year quarter. Operating earnings were $51.9 million, up 1.2%, and operating margin was 12.9%, up 30 basis points. Gross margin held at 40.0%.

Adjusted selling, general and administrative expenses were $400 million, down $5 million from the year-ago quarter. GAAP selling, general and administrative expenses were $402 million.

Cash flow from operations was $75 million and free cash flow was $47 million. The company repaid $20 million of term loan B debt and repurchased 2.6 million shares for $42 million. As of September 30, 2026, cash and cash equivalents were $158 million, with no outstanding borrowings under the asset-based revolving line of credit. Inventory was $1.00 billion, up 1% versus a year ago. The company ended the quarter with a net debt leverage ratio of 1.4x.

For the full year ended September 30, 2026, consolidated net sales were $3.73 billion, up 0.9%, with comparable sales growth of 0.5%. GAAP diluted earnings were $2.02 a share, up 7%, and adjusted diluted earnings were $2.08 a share, up 9%. GAAP operating earnings were $326 million and GAAP operating margin was 8.7%, down 20 basis points. Adjusted operating earnings were $334 million and adjusted operating margin was 9.0%, up 10 basis points. Global e-commerce sales increased 10% to $441 million, representing 12% of net sales. Cash flow from operations was $323 million and free cash flow was $210 million. The company completed $80 million of term loan repayments and $113 million of share repurchases.

The company said fiscal 2027 guidance is in line with its financial algorithm. It expects consolidated net sales of $3.77 billion to $3.81 billion, comparable sales growth of 1% to 2%, adjusted operating earnings of $334 million to $347 million, and adjusted diluted EPS of $2.20 to $2.30. Capital expenditures are expected at approximately $140 million and free cash flow at approximately $200 million, assuming 50% of free cash flow goes toward share repurchases. Guidance assumes approximately 30 basis points of unfavorable impact from expected foreign currency rates.

For the first quarter of fiscal 2027, the company expects consolidated net sales of $945 million to $955 million, comparable sales growth of 0.5% to 1.5%, adjusted operating earnings of $75 million to $80 million, and adjusted diluted EPS of $0.48 to $0.52.