Stock Reaction & 52-Week Context
Q1 FY26 Financial Performance
For the quarter ended Dec. 31, 2025, consolidated net sales rose 0.7% year over year to $937.9 million. Growth included a 60-basis-point foreign-exchange headwind. Comparable sales increased 1.6%, supported by strength in hair color and digital marketplaces. Global e-commerce revenue totaled $99 million, representing 10.6% of net sales. Gross profit increased 2.1% to $476.8 million, while gross margin expanded 60 basis points to 50.8%, driven by lower shrink and freight costs as supply-chain efficiencies improved. SG&A expenses declined to $376.5 million, down $21.6 million from a year earlier.
Earnings & Margins
GAAP net earnings rose to $61.0 million, or $0.58 per diluted share, versus $38.4 million, or $0.35, a year earlier. On an adjusted basis, net earnings were $44.8 million, or $0.43 per share, compared with $42.0 million, or $0.39, last year. Adjusted EBITDA increased 2.9% to $110.2 million, with margin improving 20 basis points to 11.7%. Operating margin expansion reflected merchandise margin gains and cost discipline initiatives.
Segment Performance
Sally Beauty Supply:
- Net sales: $525.4 million, up 0.4% YoY
- Comparable sales: +1.7%
- Gross margin: 59.6%, up 100 bps
- Operating income: $79.9 million, up 2.9%
Beauty Systems Group:
- Net sales: $412.4 million, up 1.1% YoY
- Comparable sales: +1.4%
- Gross margin: 39.7%, up 30 bps
- Operating income: $50.5 million, up 13.1%
Cash Flow & Balance Sheet
Operating cash flow totaled $33.5 million, while operating free cash flow reached $57.0 million, aided by proceeds from the sale of the corporate office. The company ended the quarter with $106 million in cash and no borrowings on its asset-based revolver. Inventory stood at $1.01 billion, largely flat year over year. During the quarter, Sally Beauty repaid $41 million of term loan debt and repurchased $10 million in shares.
Outlook & Analyst Actions
The company did not announce new guidance changes alongside the release. No analyst upgrades, downgrades, or price-target revisions were reported on the day of the earnings release.