Sally Beauty (SBH) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Mon, February 9, 2026 astatine 8:46 AM CST 31 min read

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Monday, Feb. 9, 2026 astatine 8:30 a.m. ET

• President and Chief Executive Officer — Denise Paulonis

• Chief Financial Officer — Marlo Cormier

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Denise Paulonis: Thank you, Jeff, and bully morning, everyone. Our archetypal 4th fiscal show marks a beardown commencement to fiscal twelvemonth 2026. We achieved top-line results and adjusted operating income astatine the precocious extremity of our expectations and adjusted diluted net per stock supra our guidance range. Through focused execution successful the work of our customers, we delivered full income of $943 million, with comparable income level to past year. Reflecting our quality to navigate and rebound from the macro volatility we saw during the quarter, astir notably from the authorities shutdown.

Strong gross margins of 51%, cautious outgo control, and benefits from our Fuel for Growth programme resulted successful outperformance connected the bottommost line, with adjusted diluted net per stock expanding 12% to $0.48. We besides generated beardown currency travel from operations of $93 million, which we deployed towards investing for growth, further strengthening our equilibrium expanse with $20 cardinal of indebtedness wage down, and returning worth to shareholders done $21 cardinal of stock repurchases. In our Sally segment, portion our customers remained choiceful, they demonstrated wide resilience successful a challenging macro environment.

We are pleased to spot show fortify successful December arsenic the authorities reopened, and successful turn, our Sally US and Canada concern delivered affirmative comparable income maturation of 1.3% for the quarter. Of note, successful the quarter, we did exit substantially each of our little borderline full-service operations successful Europe. This represents a affirmative strategical displacement for our concern arsenic it simplifies our operations and allows america to ore connected driving maturation wrong our halfway store and omnichannel businesses. While this exit volition effect successful a humble income headwind, astir $10 million, to afloat twelvemonth 2026, it is not expected to person a worldly interaction connected operating profit.

Underscoring the benefits of focusing our resources connected areas with greater semipermanent potential. Our halfway colour class was a standout performer astatine Sally, with year-over-year maturation of 8%. For Sally US and Canada, colour was besides up 8%, and we saw a meaningful summation successful colour lawsuit count, which accrued 3% fueled by our show selling and personalization initiatives, arsenic good arsenic ongoing momentum successful our licensed Colors connected Demand platform. Additionally, our introduction into the fast-growing fragrance class was met with a affirmative response. In November, we introduced fragrance successful our apical 1,000 Sally US stores, and beardown request drove out-of-stocks successful the second weeks of the quarter.