olivLaw · US equity research
Sally Beauty Holdings, Inc. SBH
Retail-Retail Stores, NEC · SIC 5990 · Vertical: Retail-Retail Stores, NEC (SIC 5990)
Sally Beauty Holdings is the leading international specialty retailer and distributor of professional beauty supplies, with a focus on hair color that sells through stores, digital channels and salon distribution. Consolidated net sales were 3701.4 million USD in fiscal 2025, and in the third quarter of fiscal 2026 growth was nearly flat, with sales of 935.5 million USD, showing a company in the middle of a strategic reorientation.
At the close of 04 Nov 2026, Sally Beauty Holdings, Inc. (SBH) stock was 19.24 USD (+7.49% on the day), with market capitalisation 1.8 bn USD, P/E 10.0 on diluted EPS of 1.92 USD over the last 12 months, beta 0.85, 52-week range 11.82–19.24 USD. Latest reported quarter (Q3 2026): revenue of 935.5 m USD (+0.2% YoY), net income of 54.1 m USD (+18.3% YoY), diluted EPS 0.55 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 68.3
- strong (55–70)
- Bollinger (20, 2)
- 15.23 – 19.01
- above the upper band · %B 1.06 · band width 22.1%
- SMA 50 / 200
- 16.65 / 15.09
- uptrend (price > SMA50 > SMA200)
- MACD (12, 26, 9)
- 0.57 / 0.38
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +20.0% | −2.0% | +21.9 pp | — |
| 3 months | +21.8% | −2.2% | +24.0 pp | — |
| 6 months | +37.6% | +4.3% | +33.4 pp | — |
| Year to date | +34.9% | +10.6% | +24.4 pp | — |
| 1 year | +36.0% | +10.5% | +25.5 pp | −26.6% |
| 3 years | +107.6% | +73.7% | +33.9 pp | −49.3% |
| 5 years | +4.5% | +61.7% | −57.3 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q3 2026 · 30 Jun 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 935.0 m | 937.9 m | 883.1 m | 933.3 m | 947.1 m | 943.2 m | 903.4 m | 935.5 m |
| Cost of revenue | 455.8 m | 461.1 m | 424.3 m | 452.3 m | 453.0 m | 459.9 m | 427.6 m | 445.2 m |
| Gross profit | 479.2 m | 476.8 m | 458.8 m | 481.0 m | 494.1 m | 483.3 m | 475.8 m | 490.2 m |
| SG&A | 397.4 m | 376.5 m | 389.4 m | 402.8 m | 414.2 m | 407.3 m | 403.8 m | 403.9 m |
| Operating income | 82.3 m | 100.3 m | 69.4 m | 78.2 m | 79.9 m | 75.9 m | 71.9 m | 86.4 m |
| Depreciation & amortisation | 26.2 m | 25.6 m | 25.4 m | 24.7 m | 24.3 m | 23.6 m | 25.3 m | 26.2 m |
| Interest expense | 17.9 m | 17.4 m | 16.3 m | 15.7 m | 15.0 m | 14.6 m | 14.2 m | — |
| Pre-tax income | 64.4 m | 82.9 m | 53.1 m | 62.5 m | 65.0 m | 61.3 m | 57.8 m | 72.7 m |
| Income tax | 16.3 m | 21.9 m | 13.9 m | 16.7 m | 15.1 m | 15.8 m | 15.1 m | 18.6 m |
| Net income | 48.1 m | 61.0 m | 39.2 m | 45.7 m | 49.9 m | 45.6 m | 42.7 m | 54.1 m |
| Diluted EPS | 0.45 ≈ | 0.58 | 0.38 | 0.44 | 0.49 ≈ | 0.45 | 0.43 | 0.55 |
| Operating cash flow | 110.7 m | 33.5 m | 51.1 m ≈ | 69.4 m ≈ | 120.9 m | 93.2 m | 73.3 m ≈ | 80.9 m ≈ |
| Capex | 37.4 m | 20.1 m | 18.9 m ≈ | 20.3 m ≈ | 42.9 m | 35.8 m | 29.2 m ≈ | 19.3 m ≈ |
| Share repurchases | 9.9 m | 9.9 m | 10.2 m ≈ | 13.2 m ≈ | 20.7 m | 20.8 m | 25.6 m ≈ | 25.6 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 74 percentile of its own 39-quarter history (min 4.6, median 8.4, max 16.3; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 3.9 bn | 3.9 bn | 3.5 bn | 3.9 bn | 3.8 bn | 3.7 bn | 3.7 bn | 3.7 bn |
| Revenue YoY | −0.1% | −1.4% | −9.3% | +10.3% | −1.5% | −2.3% | −0.3% | −0.4% |
| Net income | 258.0 m | 271.6 m | 184.6 m | 239.9 m | 183.6 m | 184.6 m | 153.4 m | 195.9 m |
| Net income YoY | +20.0% | +5.3% | −32.0% | +29.9% | −23.5% | +0.6% | −16.9% | +27.7% |
| Diluted EPS | 2.08 | 2.26 | 0.99 | 2.10 | 1.66 | 1.69 | 1.43 | 1.89 |
| Diluted EPS YoY | +33.3% | +8.7% | −56.2% | +112.1% | −21.0% | +1.8% | −15.4% | +32.2% |
| net % | 6.6% | 7.0% | 5.3% | 6.2% | 4.8% | 5.0% | 4.1% | 5.3% |
| Free cash flow | 286.2 m | 212.7 m | 316.0 m | 308.0 m | 57.3 m | 158.6 m | 145.4 m | 172.7 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 30 Sept 2025
- Cash
- 149.2 m USD
- Financial debt
- 879.0 m USD
- Net debt
- 729.8 m USD
- Equity
- 794.2 m USD
- Total assets
- 2.9 bn USD
- Debt / equity
- 1.11x
- Current ratio
- 2.26x
- ROE
- 27.5%
- ROA
- 6.9%
- FCF margin
- 4.7%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 3.5 bn | 3.9 bn | 3.8 bn | 3.7 bn | 3.7 bn | 3.7 bn | SEC (XBRL)· 13 Nov 2025verified |
| Cost of revenue | 1.8 bn | 1.9 bn | 1.9 bn | 1.8 bn | 1.8 bn | 1.8 bn | SEC (XBRL)· 13 Nov 2025verified |
| Gross profit | 1.7 bn | 2.0 bn | 1.9 bn | 1.9 bn | 1.9 bn | 1.9 bn | SEC (XBRL)· 13 Nov 2025verified |
| SG&A | 1.4 bn | 1.5 bn | 1.6 bn | 1.6 bn | 1.6 bn | 1.6 bn | SEC (XBRL)· 13 Nov 2025verified |
| Operating income | 258.8 m | 418.4 m | 337.6 m | 325.0 m | 282.7 m | 327.8 m | SEC (XBRL)· 13 Nov 2025verified |
| Depreciation & amortisation | 106.8 m | 102.2 m | 99.9 m | 102.4 m | 109.7 m | 99.9 m | SEC (XBRL)· 13 Nov 2025verified |
| EBITDA | 365.5 m ≈ | 520.6 m ≈ | 437.6 m ≈ | 427.4 m ≈ | 392.5 m ≈ | 427.7 m ≈ | SEC (XBRL)· 13 Nov 2025derived |
| Interest expense | 98.8 m | 93.5 m | 93.5 m | 73.0 m | 76.4 m | 64.4 m | SEC (XBRL)· 13 Nov 2025verified |
| Pre-tax income | 160.0 m | 324.9 m | 244.1 m | 252.1 m | 206.3 m | 263.4 m | SEC (XBRL)· 13 Nov 2025verified |
| Income tax | 46.7 m | 85.1 m | 60.5 m | 67.5 m | 52.9 m | 67.5 m | SEC (XBRL)· 13 Nov 2025verified |
| Net income | 184.6 m | 239.9 m | 183.6 m | 184.6 m | 153.4 m | 195.9 m | SEC (XBRL)· 13 Nov 2025verified |
| Diluted EPS | 0.99 | 2.10 | 1.66 | 1.69 | 1.43 | 1.89 | SEC (XBRL)· 13 Nov 2025verified |
| Weighted average diluted shares | 114.7 m | 114.2 m | 110.3 m | 109.3 m | 106.9 m | 103.8 m | SEC (XBRL)· 13 Nov 2025verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 514.2 m | 401.0 m | 70.6 m | 123.0 m | 108.0 m | 149.2 m | SEC (XBRL)· 13 Nov 2025verified |
| Receivables | 35.6 m | 32.6 m | 34.1 m | 33.4 m | 33.6 m | 31.8 m | SEC (XBRL)· 13 Nov 2025verified |
| Inventories | 814.5 m | 871.3 m | 936.4 m | 975.2 m | 1.0 bn | 987.6 m | SEC (XBRL)· 13 Nov 2025verified |
| Current assets | 1.4 bn | 1.4 bn | 1.1 bn | 1.2 bn | 1.3 bn | 1.3 bn | SEC (XBRL)· 13 Nov 2025verified |
| Property, plant & equipment, net | 315.0 m | 307.4 m | 297.9 m | 297.8 m | 269.9 m | 284.3 m | SEC (XBRL)· 13 Nov 2025verified |
| Goodwill | 540.0 m | 541.2 m | 526.1 m | 533.1 m | 538.3 m | 540.7 m | SEC (XBRL)· 13 Nov 2025verified |
| Intangibles (excl. goodwill) | 58.3 m | 55.5 m | 50.3 m | 55.2 m | 60.0 m | 53.0 m | SEC (XBRL)· 13 Nov 2025verified |
| Total assets | 2.9 bn | 2.8 bn | 2.6 bn | 2.7 bn | 2.8 bn | 2.9 bn | SEC (XBRL)· 13 Nov 2025verified |
| Accounts payable | 236.3 m | 291.6 m | 275.7 m | 258.9 m | 269.4 m | 224.5 m | SEC (XBRL)· 13 Nov 2025verified |
| Short-term debt | 180.0 k | 194.0 k | 68.7 m | 4.2 m | 4.1 m | 4.0 m | SEC (XBRL)· 13 Nov 2025verified |
| Long-term debt | 1.8 bn | 1.4 bn | 1.1 bn | 1.1 bn | 994.0 m | 875.0 m | SEC (XBRL)· 13 Nov 2025verified |
| Current liabilities | 563.4 m | 664.9 m | 667.9 m | 579.3 m | 592.7 m | 576.0 m | SEC (XBRL)· 13 Nov 2025verified |
| Total liabilities | 2.9 bn | 2.6 bn | 2.3 bn | 2.2 bn | 2.2 bn | 2.1 bn | SEC (XBRL)· 13 Nov 2025verified |
| Equity | 15.4 m † | 280.7 m † | 293.6 m † | 508.7 m † | 628.5 m † | 794.2 m † | SEC (XBRL)· 13 Nov 2025verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 426.9 m | 381.9 m | 156.5 m | 249.3 m | 246.5 m | 274.8 m | SEC (XBRL)· 13 Nov 2025verified |
| Capex | 110.9 m | 73.9 m | 99.3 m | 90.7 m | 101.2 m | 102.1 m | SEC (XBRL)· 13 Nov 2025verified |
| Free cash flow | 316.0 m ≈ | 308.0 m ≈ | 57.3 m ≈ | 158.6 m ≈ | 145.4 m ≈ | 172.7 m ≈ | SEC (XBRL)· 13 Nov 2025derived |
| Investing cash flow | -123.8 m | -76.0 m | -102.4 m | -99.8 m | -108.9 m | -58.3 m | SEC (XBRL)· 13 Nov 2025verified |
| Financing cash flow | 139.8 m | -420.0 m | -373.7 m | -100.8 m | -153.7 m | -178.4 m | SEC (XBRL)· 13 Nov 2025verified |
| Share repurchases | 61.4 m | — | 130.3 m | 15.2 m | 60.4 m | 54.0 m | SEC (XBRL)· 13 Nov 2025verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 66 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 1.8 bn USD
Key indicators
Coverage and freshness
Score by group
- Valuation78
- Balance sheet59
- Quality91
- Growth15
- Returns73
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 10.01 – 101.99 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)36.24 – 67.54 (Mid 47.48)WACC 7.8% · starting FCFF 285.7 m USD · terminal value share of EV 77%The WACC × g sensitivity gives the method's bounds; these are not probabilities.Reverse DCF: starting growth implied by the price (fading linearly to terminal growth, everything else fixed): -28.6%
- Peers: EV/EBITDA43.62 – 101.99 (Mid 77.08)4 companies used · median multiple 19.0x · quartiles 11.4x – 24.6xSGU, TITN, TKLF, ULTA
- Peers: P/E10.01 – 54.40 (Mid 28.04)6 companies used · median multiple 14.6x · quartiles 5.2x – 28.4xBBWI, JD, RENT, SGU, ULTA, WOOF
- Dividend discount (DDM)unavailable · the company pays no dividend: a dividend model needs an explicit initiation assumption
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 66/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 15.3% | 90 (vs peers) | 11% |
| Net margin · Quality | 5.2% | 83 (vs peers) | 7% |
| FCF conversion · Quality | 125.5% | 100 (on a fixed band) | 7% |
| Revenue CAGR 3Y · Growth | -1.0% | 0 (on a fixed band) | 9% |
| EPS CAGR 3Y · Growth | 4.4% | 29 (on a fixed band) | 9% |
| Net debt / EBITDA · Balance sheet | 1.6x | 43 (vs peers) | 11% |
| Interest coverage · Balance sheet | 5.3x | 58 (on a fixed band) | 7% |
| Current ratio · Balance sheet | 2.4x | 100 (on a fixed band) | 4% |
| P/E (TTM) · Valuation | 10.0x | 57 (vs peers) | 11% |
| EV/EBITDA · Valuation | 5.9x | 83 (on a fixed band) | 11% |
| FCF yield · Valuation | 13.4% | 100 (on a fixed band) | 9% |
| Shareholder yield (distributions) · Returns | 5.1% | 73 (on a fixed band) | 7% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet59/100 · 3/3 factors with a value
- Growth15/100 · 2/2 factors with a value
- Quality91/100 · 3/3 factors with a value
- Returns· partial73/100 · 1/2 factors with a value
- Valuation78/100 · 3/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
SALLY BEAUTY HOLDINGS, INC. (SBH). Latest full fiscal year: 2025; data up to 2026-06-30.
Figures computed from the financial statements: revenue 3.7 bn USD in 2025; YoY growth -0.4%; net margin 5.2%; ROE 23.5%; net debt/EBITDA 1.6x.
The estimated value range is 36.24–67.54 USD per share (median of 3 methods, agreement: low); assumptions are illustrative. Against the central value of 47.48 USD, the price of 19.24 USD leaves a potential of 146.8% (value / price − 1) and a margin of safety of 59.5% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 66/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- ROIC: 15.3%
- Net margin: 5.2%
- FCF conversion: 125.5%
- Current ratio: 2.4x
- EV/EBITDA: 5.9x
- FCF yield: 13.4%
- Shareholder yield (distributions): 5.1%
- The price is below the estimated value range
What contradicts it
- Revenue CAGR 3Y: -1.0%
- EPS CAGR 3Y: 4.4%
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): Payout ratio (FCF).
Versus the vertical median
Retail-Retail Stores, NEC (SIC 5990) · same industry (4-digit SIC) · compared with 18 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| ULTAUlta Beauty, Inc. | 27.1 bn | 23.1 | 46.1% | 9.3% | +9.7% | +18% / +49% |
| BBWIBath & Body Works, Inc. | 4.7 bn | 6.1 | — | 10.8% | −0.2% | +35% / −28% |
| SBHSally Beauty Holdings, Inc. | 1.8 bn | 10.0 | 23.5% | 5.2% | −0.4% | +36% / +108% |
| YJYunji Inc. | 1.3 bn | — | -13.5% | -42.0% | −20.8% | −27% / −62% |
| TITNTitan Machinery Inc. | 530.0 m | — | -9.7% | -2.5% | −10.2% | +22% / −1% |
| SGUStar Group, L.P. | 429.8 m | 4.9 | — | 4.6% | +1.0% | +9% / +2% |
| NAASNaaS Technology Inc. | 223.8 m | — | — | -454.5% | −38.9% | −44% / −100% |
| NEGGNewegg Commerce, Inc. | 207.4 m | — | -3.7% | -0.3% | +16.9% | −87% / −61% |
| RENTRent the Runway, Inc. | 83.1 m | 0.2 | — | 11.8% | +7.7% | −49% / −77% |
| BARKBark, Inc. | 75.2 m | — | -36.7% | -8.4% | −18.5% | −42% / −49% |
| TKLFTokyo Lifestyle Co., Ltd. | 58.0 m | 68.5 | 1.7% | 0.2% | +77.6% | −48% / −82% |
| BQBoqii Holding Limited | 10.5 m | — | -2.8% | -1.2% | −5.7% | −79% / −98% |
| INHDInno Holdings Inc. | 8.7 m | — | -7.2% | -72.7% | +221.4% | −97% / unavailable |
| RCTRedCloud Holdings plc | 2.3 m | — | — | -95.3% | +4.3% | −98% / unavailable |
| LESLLeslie’s, Inc. | 955.3 k | — | — | -21.2% | −6.6% | unavailable / unavailable |
| JDJD.com, Inc. | — | 30.1 | 10.2% | 1.8% | +17.9% | −7% / +1% |
| HITIHigh Tide Inc. | — | — | -44.0% | -8.5% | +13.7% | +8% / +85% |
| FLWS1 800 Flowers Com Inc | — | — | -65.4% | -9.0% | −10.8% | −17% / −68% |
| WOOFPetco Health & Wellness Company, Inc. | — | 31.1 | 2.6% | 0.5% | −2.5% | −2% / +4% |
1- and 3-year price returns: for SBH from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 11.51 Total return -40% · Per year -40% | 20.41 Total return 6% · Per year 6% | 30.83 Total return 60% · Per year 60% |
| 3 years | 9.97 Total return -48% · Per year -20% | 20.00 Total return 4% · Per year 1% | 33.34 Total return 73% · Per year 20% |
| 5 years | 8.64 Total return -55% · Per year -15% | 19.60 Total return 2% · Per year 0% | 36.05 Total return 87% · Per year 13% |
- Exit P/E± 5.00
- Net margin± 3.50
- Annual revenue growth± 3.03
- Annual dilution± 0.29
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
Sally Beauty Holdings is the leading international specialty retailer and distributor of professional beauty supplies, with a focus on hair color that sells through stores, digital channels and salon distribution. Consolidated net sales were 3701.4 million USD in fiscal 2025 1, and in the third quarter of fiscal 2026 growth was nearly flat, with sales of 935.5 million USD 2, showing a company in the middle of a strategic reorientation.
SWOT
Strengths
- Leadership in professional hair color, with a broad portfolio of third-party and owned brands.
- Omni-channel model combining stores, digital platforms and salon distribution.
- Solid operating cash flow and capacity to reduce debt.
Weaknesses
- Consolidated sales are nearly flat, and comparable sales have at times been negative.
- Dependence on a limited number of manufacturers and contracts that can end on short notice.
- Labor and compensation costs that raise operating expenses.
Opportunities
- Expanding the Sally Ignited concept and refreshed stores could improve the customer experience.
- Growth of owned brands and new categories such as fragrance could attract new customers.
- Modernizing the BSG app could raise conversion and loyalty among professionals.
Threats
- Competitive pressure from online retailers and marketplaces may limit pricing.
- Tariffs and trade volatility can raise the cost of goods.
- Suppliers may bypass distributors through their own channels, which could reduce access to products.
Risks
- Intense competition and consolidationhigh
Competitors may have greater resources, and industry consolidation can give suppliers and rivals more negotiating power 1.
- Dependence on suppliershigh
The company does not manufacture the products it sells, and contracts with manufacturers can be terminated on short notice, which could disrupt supply 1.
- Success of owned brandsmedium
Launching and promoting owned brands can require large investment without assurance that customers will accept them 1.
- Costs and import tariffsmedium
Products made overseas are exposed to tariffs, import restrictions and logistics disruptions 1.
- Failure of transformation strategiesmedium
If store and e-commerce transformation initiatives do not succeed, comparable sales and growth prospects could suffer 1.
Investment thesis
What would need to be true (bull case)
- Sally comparable sales growth in the third quarter and higher gross margins in both segments suggest the strategy may be working 23.
- A solid balance sheet with low debt and share repurchase capacity gives flexibility for investment 3.
- Leadership in professional hair color and the consultant network for salons could support long-term customer loyalty 1.
What would break the thesis
What to watch
- Final fiscal 2026 results against updated guidance for sales, comparable sales and adjusted EPSFiscal 2026 annual report
- Development of BSG comparable sales and the effect of the app modernization2027
- Results of the Happy Beauty Co. concept after the holiday seasonNext 10-K
- Continuation of the Fuel for Growth program and gross margin trendQ1 2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
Sally Beauty Holdings, Inc. operates two segments: Sally Beauty, an omni-channel retailer of professional beauty products, and Beauty Systems Group (BSG), an exclusive distributor to salons and licensed professionals in the U.S. and Canada 1. The company presents itself as a leader in hair color and care, categories that make up about 70% of consolidated sales 1. The current Sally Ignited strategy turns stores from a beauty supply house into a modernized specialty retailer, and Happy Beauty Co. is being tested as a new concept 1.
The business model relies on purchasing scale and a network of stores and digital channels reaching diverse customers. The loyalty program and related credit cards allow collection of customer data for marketing personalization 1. The Fuel for Growth efficiency program reduced transportation and supply chain costs, and third quarter comparables show these measures supporting gross margin 23.
At the end of the third quarter of fiscal 2026 the company had a net debt leverage ratio of 1.4x and no borrowings under its ABL revolver, giving it flexibility for investment and share repurchases 3.
Segments
Sally Beauty
The Sally segment sells professional products to DIY customers through stores across North America, South America and Europe, plus digital platforms. Sales fell slightly in fiscal 2025 to 2094.4 million USD, while comparable sales rose 0.4% 1.
Beauty Systems Group
BSG distributes professional products exclusively to salons and licensed professionals in the U.S. and Canada, through company-operated stores, franchises and salon business consultants. The segment had sales of 1607.1 million USD in fiscal 2025, and in the third quarter of fiscal 2026 comparable sales fell 2.1% 12.
Market context
The professional beauty products market is described as fragmented but consolidating, and inflationary pressure and price sensitivity among customers shape buying behavior 1. Digital sales keep growing and represented 12% of net sales in the third quarter 3.
Demand is affected by macroeconomic uncertainty and shifting trade policy, and the cost of products and services remains under pressure 1.
Trends
- Growth in hair color and digital marketplacestailwind
Hair color and digital marketplaces supported Sally comparable sales in the third quarter 23. If this continues, it could support sales.
- Inflation and price sensitivityheadwind
Consumers and stylists feel inflation fatigue, which can reduce transaction counts and basket sizes 12.
- Fuel for Growth programtailwind
Lower distribution and freight costs lifted gross margin in both segments 12. The effect depends on these savings continuing.
- Supplier relationships and trade policymixed
Suppliers may bypass distributors, and tariffs and import restrictions can raise purchasing costs 1. The impact is uncertain.
Competitive position
The company competes with beauty stores, salons, mass merchandisers, online retailers, drug stores and supermarkets, where price, quality and availability are the key factors 1. Larger competitors have greater financial resources and can spend more aggressively on advertising 1.
In e-commerce, competition comes from larger retailers with established platforms and from Amazon, while digital marketplaces are also sales channels for Sally 1.
- Other specialty beauty stores
Direct competition in hair and cosmetics sales, cited generically in company sources.
- Professional salons
Compete for professional customers, since they can buy through other channels.
- Mass merchandisers and supermarkets
Sell beauty products at accessible prices and attract occasional buyers.
- AmazonAMZN
Competitor in online retail and also a partner through which Sally sells on the marketplace.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
No news in our archive over the last 180 days.
SEC filings
- Quarterly report03 Aug 2026
- Current report03 Aug 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report11 May 2026
- Current report11 May 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Current report02 Apr 2026Departure or appointment of officers · Financial statements and exhibits
- Current report17 Mar 2026Departure or appointment of officers
- Quarterly report09 Feb 2026
- Current report09 Feb 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Current report26 Jan 2026Shareholder vote
- Proxy statement10 Dec 2025
Sources
- [1] Form 10-K, fiscal year ended 2025-09-30 · SEC / Sally Beauty Holdings, Inc. · 13 Nov 2025
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Sally Beauty Holdings, Inc. · 03 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Sally Beauty Holdings, Inc. · 03 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.