Open the filing on EDGARSally Beauty Holdings Reports Fourth Quarter and Full Year Fiscal 2025 Results
- Q4 Consolidated Net Sales Increased 1.3%; Consolidated Comparable Sales Up 1.3%
- Q4 GAAP Diluted EPS Increased 7%; Adjusted Diluted EPS Increased 10%
- Full Year GAAP Diluted EPS Increased 32%; Adjusted Diluted EPS Increased 12%
- Full Year Cash Flow from Operations of $275 Million Deployed to Invest for Growth, Strengthen Balance Sheet and Return Value to Shareholders
- Company Provides Fiscal 2026 Guidance and Long-Term Financial Targets
DENTON, Texas, November 13, 2025 - Sally Beauty Holdings, Inc. (NYSE: SBH) (the “Company”), the leader in professional hair color, today announced financial results for its fourth quarter and full year ended September 30, 2025. The Company will hold a conference call today at 7:30 a.m. Central Time to discuss these results and its business.
“We concluded the year with fourth quarter results that exceeded our expectations, highlighted by solid topline growth and healthy gross margins that drove 10% adjusted EPS growth and robust free cash flow. Importantly, sharp execution against our strategic initiatives drove broad-based strength across both our Sally and BSG segments,” said Denise Paulonis, president and chief executive officer. “We also delivered strong full year results, including 40 basis points of adjusted operating margin expansion and 12% adjusted EPS growth while deploying our cash to invest for growth, strengthen our balance sheet and return value to shareholders.”
“As we enter fiscal 2026, we are emboldened by our resilient customers, defensible core categories and strategic initiatives built to drive growth and increase profitability. All of this gives us confidence in the fiscal 2026 guidance and long-term financial targets we are providing today.”
Fiscal 2025 Fourth Quarter Summary
- Consolidated net sales of $947 million, an increase of 1.3% compared to the prior year;
- Consolidated comparable sales growth of 1.3%;
- Global e-commerce sales of $105 million, representing 11.1% of net sales;
- GAAP gross margin expansion of 100 basis points to 52.2%;
- GAAP selling, general and administrative expenses of $414 million, an increase of $17 million compared to the prior year;
- Adjusted Selling, General and Administrative Expenses of $405 million, an increase of $14 million compared to the prior year;
- GAAP operating earnings of $80 million and GAAP operating margin of 8.4%;
- Adjusted Operating Earnings of $89 million and Adjusted Operating Margin of 9.4%;
- GAAP diluted net earnings per share of $0.49, an increase of 7% over the prior year;
- Adjusted Diluted Net Earnings Per Share of $0.55, an increase of 10% over the prior year;
- Cash flow from operations of $121 million and Free Cash Flow of $78 million; and
- Completed $21 million in term loan repayment and $20 million in share repurchases.
Fiscal 2025 Full Year Summary
- Consolidated net sales of $3.70 billion, a decrease of 0.4% compared to the prior year;
- Consolidated comparable sales increase of 0.3%;
- Global e-commerce sales of $397 million, representing 10.7% of net sales;
- GAAP gross margin expansion of 70 basis points to 51.6%;
- Adjusted Gross Margin expansion of 80 basis points to 51.7%;
- GAAP selling, general and administrative expenses of $1.58 billion, a decrease of $25 million compared to the prior year;
- Adjusted Selling, General and Administrative Expenses of $1.59 billion, an increase of $10 million compared to the prior year;
- GAAP operating earnings of $328 million and GAAP operating margin of 8.9%, an increase of 130 basis points over the prior year;
- Adjusted Operating Earnings of $328 million and Adjusted Operating Margin of 8.9%, an increase of 40 basis points over the prior year;
- GAAP diluted net earnings per share of $1.89, an increase of 32% over the prior year;
- Adjusted Diluted Net Earnings Per Share of $1.90, an increase of 12% over the prior year;
- Cash flow from operations of $275 million and Free Cash Flow of $216 million; and
- Completed $119 million in term loan repayments and $53 million in share repurchases.
Balance Sheet and Cash Flow
As of September 30, 2025, the Company had cash and cash equivalents of $149 million and no outstanding borrowings under its asset-based revolving line of credit. At fiscal year-end, inventory was $988 million, down 4.7% versus a year ago.
Fourth quarter cash flow from operations was $121 million and Free Cash Flow totaled $78 million. During the fourth quarter, the Company utilized its cash flow to repay $21 million of term loan B debt and repurchase 1.7 million shares under its share repurchase program at an aggregate cost of $20 million. The Company ended fiscal 2025 with a net debt leverage ratio of 1.6x.
Fiscal 2025 Fourth Quarter Segment Results
| Sally Beauty | Beauty Systems Group |
|---|
| (In thousands, except percentages) | Q4 FY25 | Q4 FY24 | Growth/(Decline) | Q4 FY25 | Q4 FY24 | Growth/(Decline) |
| Net Sales | $541,559 | $534,074 | 1.4% | $405,516 | $400,954 | 1.1% |
| Comparable Sales Growth/(Decline) | 1.2% | 2.6% | (140) bps | 1.4% | 1.3% | 10 bps |
| Gross Margin | 61.3% | 60.4% | 90 bps | 40.0% | 39.0% | 100 bps |
| Operating Earnings | $86,183 | $92,932 | (7.3)% | $51,286 | $44,025 | 16.5% |
| Operating Margin | 15.9% | 17.4% | (150) bps | 12.6% | 11.0% | 160 bps |
Fiscal Year 2026 Guidance*
| Full Year | | |
| Consolidated Net Sales | $3.71 billion to $3.77 billion | |
| Comparable Sales | Flat to up 1 | % |
| Adjusted Operating Earnings | $328 million to $342 million | |
| Adjusted Diluted EPS | $2.00 to $2.10 | |
| Capital Expenditures | Approximately $100 million | |
| Free Cash Flow | Approximately $200 million | |
Assumes approximately 50 basis points of favorable impact from expected foreign currency rates
Assumes 50% of Free Cash Flow goes towards share repurchases (Free Cash Flow defined as GAAP cash flows from operating activities less payments for capital expenditures)
| First Quarter | |
| Consolidated Net Sales | $935 million to $945 million |
| Comparable Sales | Approximately Flat |
| Adjusted Operating Earnings | $75 million to $80 million |
| Adjusted Diluted EPS | $0.43 to $0.47 |
Assumes approximately 40 basis points of favorable impact from expected foreign currency rates
Long-Term Outlook*
The Company is introducing financial targets to reflect its three-year planning horizon ending with fiscal 2028, as follows:
- Consolidated net sales growth in the range of 1% to 3%, annually;
- Adjusted Operating Earnings growth in the range of 3% to 5%, annually;
- Adjusted Diluted EPS growth of 10%+, annually; including approximately 50% of Free Cash Flow deployed towards share repurchases;
- Capital expenditures in the range of $90 million to $120 million; and
- Free Cash Flow of approximately $200 million, annually.
* The Company does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of its reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of the Company’s control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Conference Call and Where You Can Find Additional Information
The Company will hold a conference call and live webcast at approximately 7:30 a.m. Central Time today, November 13, 2025, to discuss its financial results and its business. During the conference call, the Company may discuss and answer one or more questions concerning business and financial matters and trends affecting the Company. The Company’s responses to these questions, as well as other matters discussed during the conference call, may contain or constitute material information that has not been previously disclosed.
Participants can listen to the live webcast of the conference call by accessing the investor relations section of the Company’s website at sallybeautyholdings.com/investor-relations/events-and-presentations/events-calendar, or through our third-party host at SBH Q4 Earnings Webcast. To join the conference call, participants can pre-register to receive a dial-in number and unique PIN using the following link: Pre-register SBH Q4 Earnings Call. Pre-registration can be completed at any time up to and following the call start time.
A replay will be available on the Company’s investor relations website after 10:00 a.m. Central Time on November 13, 2025, through November 13, 2026.
About Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc. (NYSE: SBH), as the leader in professional hair color, sells and distributes professional beauty supplies globally through its Sally Beauty Supply and Beauty Systems Group segments. Sally Beauty Supply stores offer up to 7,000 products for hair color, hair care, nails, and skin care through proprietary brands such as Ion®, Bondbar®, Strawberry Leopard®, Generic Value Products®, Inspired by Nature® and Silk Elements® as well as professional lines such as Wella®, Clairol®, OPI®, L’Oreal®, Wahl® and Babyliss Pro®. Beauty Systems Group stores, branded as Cosmo Prof® or Armstrong McCall® stores, along with its outside sales consultants, sell up to 8,000 professionally branded products including Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico®, Amika® and Moroccanoil®, intended for use in salons and for resale by salons to retail consumers. For more information about Sally Beauty Holdings, Inc., please visit sallybeautyholdings.com/investor-relations.
Cautionary Notice Regarding Forward-Looking Statements
Statements in this news release and the schedules hereto that are not purely historical facts or that depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of words such as “believes,” “projects,” “expects,” “can,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “will,” “would,”
“anticipates,” “potential,” “confident,” “optimistic,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters.
Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including the “Risk Factors” described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, and other filings with the U.S. Securities and Exchange Commission. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements.
Use of Non-GAAP Financial Measures
This news release and the schedules hereto include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States, (“GAAP”), and are therefore referred to as non-GAAP financial measures: (1) Adjusted Gross Margin; (2) Adjusted Selling, General and Administrative Expenses; (3) Adjusted EBITDA and EBITDA Margin; (4) Adjusted Operating Earnings and Operating Margin; (5) Adjusted Net Earnings; (6) Adjusted Diluted Net Earnings Per Share; and (7) Free Cash Flow. We have provided definitions below for these non-GAAP financial measures and have provided tables in the schedules hereto to reconcile these non-GAAP financial measures to the comparable GAAP financial measures.
Adjusted Gross Margin - We define the measure Adjusted Gross Margin as GAAP gross margin excluding the inventory write-off from the Company’s European operations in connection with the fuel for growth initiative for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted Selling, General and Administrative Expenses - We define the measure Adjusted Selling, General and Administrative Expenses as GAAP selling, general and administrative expenses excluding the costs related to the Company’s fuel for growth initiative, expenses related to the sale of the Company’s corporate headquarters, asset impairment, and other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted EBITDA and EBITDA Margin - We define the measure Adjusted EBITDA as GAAP net earnings before depreciation and amortization, interest expense, income taxes, share-based compensation, costs related to the Company’s fuel for growth initiative, expenses related to the sale of the Company’s corporate headquarters, restructuring costs, asset impairment, and other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of net sales.
Adjusted Operating Earnings and Operating Margin - Adjusted operating earnings are GAAP operating earnings that exclude the costs related to the Company’s fuel for growth initiative, expenses related to the sale of the Company’s corporate headquarters, costs related to restructuring efforts, asset impairment, and other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Operating Margin is Adjusted Operating Earnings as a percentage of net sales.
Adjusted Net Earnings - Adjusted net earnings is GAAP net earnings that exclude the tax-effected costs related to the Company’s fuel for growth initiative, tax-effected expenses related to the sale of the Company’s corporate headquarters, tax-effected costs from the loss on debt extinguishment, tax-effected expenses related to asset impairment, tax-effected costs related to restructuring efforts, and tax-effected other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted Diluted Net Earnings Per Share - Adjusted diluted net earnings per share is GAAP diluted earnings per share that exclude the tax-effected costs related to the Company’s fuel for growth initiative, tax-effected expenses related to the sale of the Company’s corporate headquarters, tax-effected costs from the loss on debt extinguishment, tax-effected expenses related to asset impairment, tax-effected costs related to restructuring efforts, and tax-effected other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Free Cash Flow - We define the measure Free Cash Flow as GAAP net cash provided by operating activities less payments for capital expenditures (net). We believe Free Cash Flow is an important liquidity measure that provides useful information to investors about the amount of cash generated from operations after taking into account payments for capital expenditures (net).
We believe that these non-GAAP financial measures provide valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry.
We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and Board of Directors also use these non-GAAP measures as supplemental measures to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe that these non-GAAP measures also provide meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. These non-GAAP measures should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies.
Supplemental Schedules
| Segment Information | 1 |
| Non-GAAP Financial Measures Reconciliations | 2-3 |
| Non-GAAP Financial Measures Reconciliations; Adjusted EBITDA and Free Cash Flow | 4 |
| Store Count and Comparable Sales | 5 |
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
| Three Months Ended September 30, | Twelve Months Ended September 30, |
|---|
| 2025 | 2024 | Percentage Change | 2025 | 2024 | Percentage Change |
|---|
| Net sales | $947,075 | $935,028 | 1.3% | $3,701,424 | $3,717,031 | (0.4)% |
| Cost of products sold | 452,969 | 455,827 | (0.6)% | 1,790,676 | 1,826,699 | (2.0)% |
| Gross profit | 494,106 | 479,201 | 3.1% | 1,910,748 | 1,890,332 | 1.1% |
| Selling, general and administrative expenses | 414,162 | 397,371 | 4.2% | 1,582,938 | 1,607,674 | (1.5)% |
| Restructuring | - | (436) | 100.0% | - | (75) | 100.0% |
| Operating earnings | 79,944 | 82,266 | (2.8)% | 327,810 | 282,733 | 15.9% |
| Interest expense | 14,953 | 17,864 | (16.3)% | 64,393 | 76,408 | (15.7)% |
| Earnings before provision for income taxes | 64,991 | 64,402 | 0.9% | 263,417 | 206,325 | 27.7% |
| Provision for income taxes | 15,060 | 16,346 | (7.9)% | 67,539 | 52,911 | 27.6% |
| Net earnings | $49,931 | $48,056 | 3.9% | $195,878 | $153,414 | 27.7% |
| Earnings per share: | | | | | | |
| Basic | $0.51 | $0.47 | 8.5% | $1.95 | $1.48 | 31.8% |
| Diluted | $0.49 | $0.46 | 6.5% | $1.89 | $1.43 | 32.2% |
| Weighted average shares: | | | | | | |
| Basic | 98,577 | 102,336 | | 100,662 | 103,939 | |
| Diluted | 101,760 | 105,346 | | 103,821 | 106,933 | |
| | | Basis Point Change | | | Basis Point Change |
| Comparison as a percentage of net sales | | | | | | |
| Consolidated gross margin | 52.2% | 51.2% | 100 | 51.6% | 50.9% | 70 |
| Selling, general and administrative expenses | 43.7% | 42.5% | 120 | 42.8% | 43.3% | (50) |
| Consolidated operating margin | 8.4% | 8.8% | (40) | 8.9% | 7.6% | 130 |
| Effective tax rate | 23.2% | 25.4% | (220) | 25.6% | 25.6% | 0 |
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| September 30 |
|---|
| 2025 | 2024 |
|---|
| Cash and cash equivalents | $149,162 | $107,961 |
| Trade and other accounts receivable | 116,562 | 92,188 |
| Inventory | 987,575 | 1,036,624 |
| Other current assets | 48,154 | 68,541 |
| Total current assets | 1,301,453 | 1,305,314 |
| Property and equipment, net | 284,284 | 269,872 |
| Operating lease assets | 646,698 | 582,573 |
| Goodwill and other intangible assets | 593,692 | 598,226 |
| Other assets | 44,969 | 36,914 |
| Total assets | $2,871,096 | $2,792,899 |
| Current maturities of long-term debt | $4,000 | $4,127 |
| Accounts payable | 224,507 | 269,424 |
| Accrued liabilities | 184,641 | 162,950 |
| Current operating lease liabilities | 158,566 | 136,068 |
| Income taxes payable | 4,260 | 20,100 |
| Total current liabilities | 575,974 | 592,669 |
| Long-term debt, including capital leases | 861,974 | 978,255 |
| Long-term operating lease liabilities | 538,426 | 479,616 |
| Other liabilities | 21,026 | 22,066 |
| Deferred income tax liabilities, net | 79,489 | 91,758 |
| Total liabilities | 2,076,889 | 2,164,364 |
| Total stockholders’ equity | 794,207 | 628,535 |
| Total liabilities and stockholders’ equity | $2,871,096 | $2,792,899 |
Supplemental Schedule 1
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Segment Information
| Three Months Ended September 30, | Twelve Months Ended September 30, |
|---|
| 2025 | 2024 | Percentage Change | 2025 | 2024 | Percentage Change |
|---|
| Net sales: | | | | | | |
| Sally Beauty Supply (“Sally”) | $541,559 | $534,074 | 1.4% | $2,094,363 | $2,107,089 | (0.6)% |
| Beauty Systems Group (“BSG”) | 405,516 | 400,954 | 1.1% | 1,607,061 | 1,609,942 | (0.2)% |
| Total net sales | $947,075 | $935,028 | 1.3% | $3,701,424 | $3,717,031 | (0.4)% |
| Operating earnings: | | | | | | |
| Sally | $86,183 | $92,932 | (7.3)% | $326,667 | $334,319 | (2.3)% |
| BSG | 51,286 | 44,025 | 16.5% | 196,361 | 178,420 | 10.1% |
| Segment operating earnings | 137,469 | 136,957 | 0.4% | 523,028 | 512,739 | 2.0% |
| Unallocated expenses | 57,525 | 55,127 | 4.3% | 195,218 | 230,081 | (15.2)% |
| Restructuring | - | (436) | 100.0% | - | (75) | 100.0% |
| Interest expense | 14,953 | 17,864 | (16.3)% | 64,393 | 76,408 | (15.7)% |
| Earnings before provision for income taxes | $64,991 | $64,402 | 0.9% | $263,417 | $206,325 | 27.7% |
| 2025 | 2024 | Basis Point Change | 2025 | 2024 | Basis Point Change |
| Segment gross margin: | | | | | | |
| Sally | 61.3% | 60.4% | 90 | 60.8% | 59.7% | 110 |
| BSG | 40.0% | 39.0% | 100 | 39.7% | 39.3% | 40 |
| Segment operating margin: | | | | | | |
| Sally | 15.9% | 17.4% | (150) | 15.6% | 15.9% | (30) |
| BSG | 12.6% | 11.0% | 160 | 12.2% | 11.1% | 110 |
| Consolidated operating margin | 8.4% | 8.8% | (40) | 8.9% | 7.6% | 130 |
- Unallocated expenses, including share-based compensation expense, consist of corporate and shared costs and are included in selling, general and administrative expenses. Additionally, unallocated expenses include costs associated with our Fuel for Growth initiative and a gain from the sale of our corporate headquarters.
Supplemental Schedule 2
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations
| Three Months Ended September 30, 2025 |
|---|
| As Reported (GAAP) | Fuel for Growth and Other | Corporate HQ Relocation | As Adjusted (Non-GAAP) |
|---|
| Cost of products sold | $452,969 | $180 | $ - | $453,149 |
| Consolidated gross margin | 52.2% | | | 52.2% |
| Selling, general and administrative expenses | 414,162 | (7,391) | (1,465) | 405,306 |
| SG&A expenses, as a percentage of sales | 43.7% | | | 42.8% |
| Operating earnings | 79,944 | 7,211 | 1,465 | 88,620 |
| Operating margin | 8.4% | | | 9.4% |
| Interest expense | 14,953 | - | - | 14,953 |
| Earnings before provision for income taxes | 64,991 | 7,211 | 1,465 | 73,667 |
| Provision for income taxes | 15,060 | 1,846 | 379 | 17,285 |
| Net earnings | $49,931 | $5,365 | $1,086 | $56,382 |
| Earnings per share: | | | | |
| Basic | $0.51 | $0.05 | $0.01 | $0.57 |
| Diluted | $0.49 | $0.05 | $0.01 | $0.55 |
| Three Months Ended September 30, 2024 |
| As Reported (GAAP) | Fuel for Growth and Other | Restructuring | As Adjusted (Non-GAAP) |
| Cost of products sold | $455,827 | $ - | $ - | $455,827 |
| Consolidated gross margin | 51.2% | | | 51.2% |
| Selling, general and administrative expenses | 397,371 | (6,191) | - | 391,180 |
| SG&A expenses, as a percentage of sales | 42.5% | | | 41.8% |
| Restructuring | (436) | - | 436 | - |
| Operating earnings | 82,266 | 6,191 | (436) | 88,021 |
| Operating margin | 8.8% | | | 9.4% |
| Interest expense | 17,864 | - | - | 17,864 |
| Earnings before provision for income taxes | 64,402 | 6,191 | (436) | 70,157 |
| Provision for income taxes | 16,346 | 1,592 | (113) | 17,825 |
| Net earnings | $48,056 | $4,599 | $(323) | $52,332 |
| Earnings per share: | | | | |
| Basic | $0.47 | $0.04 | $(0.00) | $0.51 |
| Diluted | $0.46 | $0.04 | $(0.00) | $0.50 |
- Fuel for Growth and other represents expenses primarily related expenses associated with our Fuel for Growth program and other non-recurring items, including the write-off of a certain tradename used in the United Kingdom during the three months ended September 30, 2025.
- Primarily represents expenses in connection with the relocation of our headquarters.
- Restructuring represents expenses and adjustments incurred primarily in connection with our Distribution Center Consolidation and Store Optimization Plan.
- The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized.
- The sum of the earnings per share may not equal the full amount due to rounding of the calculated amounts.
Supplemental Schedule 3
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations, Continued
| Twelve Months Ended September 30, 2025 |
|---|
| As Reported (GAAP) | Fuel for Growth and Other | Corporate HQ Relocation | Asset Impairment | As Adjusted (Non-GAAP) |
|---|
| Cost of products sold | $1,790,676 | $(3,888) | $ - | $ - | $1,786,788 |
| Consolidated gross margin | 51.6% | | | | 51.7% |
| Selling, general and administrative expenses | 1,582,938 | (19,803) | 24,831 | (1,779) | 1,586,187 |
| SG&A expenses, as a percentage of sales | 42.8% | | | | 42.9% |
| Operating earnings | 327,810 | 23,691 | (24,831) | 1,779 | 328,449 |
| Operating margin | 8.9% | | | | 8.9% |
| Interest expense | 64,393 | - | - | - | 64,393 |
| Earnings before provision for income taxes | 263,417 | 23,691 | (24,831) | 1,779 | 264,056 |
| Provision for income taxes | 67,539 | 5,331 | (6,409) | 444 | 66,905 |
| Net earnings | $195,878 | $18,360 | $(18,422) | $1,335 | $197,151 |
| Earnings per share: | | | | | |
| Basic | $1.95 | $0.18 | $(0.18) | $0.01 | $1.96 |
| Diluted | $1.89 | $0.18 | $(0.18) | $0.01 | $1.90 |
| Twelve Months Ended September 30, 2024 |
| As Reported (GAAP) | Fuel for Growth and Other | Restructuring | Loss on Debt Extinguishment | As Adjusted (Non-GAAP) |
| Cost of products sold | $1,826,699 | $ - | $ - | $ - | $1,826,699 |
| Consolidated gross margin | 50.9% | | | | 50.9% |
| Selling, general and administrative expenses | 1,607,674 | (31,951) | - | - | 1,575,723 |
| SG&A expenses, as a percentage of sales | 43.3% | | | | 42.4% |
| Restructuring | (75) | - | 75 | - | - |
| Operating earnings | 282,733 | 31,951 | (75) | - | 314,609 |
| Operating margin | 7.6% | | | | 8.5% |
| Interest expense | 76,408 | - | - | (4,261) | 72,147 |
| Earnings before provision for income taxes | 206,325 | 31,951 | (75) | 4,261 | 242,462 |
| Provision for income taxes | 52,911 | 8,210 | (20) | 1,095 | 62,196 |
| Net earnings | $153,414 | $23,741 | $(55) | $3,166 | $180,266 |
| Earnings per share: | | | | | |
| Basic | $1.48 | $0.23 | $(0.00) | $0.03 | $1.73 |
| Diluted | $1.43 | $0.22 | $(0.00) | $0.03 | $1.69 |
- Fuel for Growth and other represents expenses primarily related expenses associated with our Fuel for Growth program and other non-recurring items, including our divestiture of operations in Spain and the write-off of a certain tradename used in the United Kingdom during the twelve months ended September 30, 2025.
- Primarily represents a $26.6 million gain from the sale of our headquarters in Denton, TX and expenses in connection with the relocation of our headquarters.
- Impairment related to the write-off of a certain tradename used in Europe.
- Restructuring represents expenses and adjustments incurred primarily in connection with our Distribution Center Consolidation and Store Optimization Plan.
- Loss on debt extinguishment relates to the repayment of our 5.625% Senior Notes due 2025, which included the write-off of unamortized deferred financing costs of $2.0 million, and overlapping interest, net of interest earned on short-term cash equivalents, in the amount of $0.5 million on such senior notes after February 27, 2024 and until their redemption. These pro-forma adjustments assume the redeemed senior notes were repaid on February 27, 2024 at the time of closing on our 6.75% Senior Notes due 2032. In connection with the repricing of our Term Loan B, we recognized a write-off of unamortized deferred financing costs of $1.7 million.
- The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized.
- The sum of the earnings per share may not equal the full amount due to rounding of the calculated amounts.
Supplemental Schedule 4
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures Reconciliations, Continued
| Three Months Ended September 30, | Twelve Months Ended September 30, |
|---|
| Adjusted EBITDA: | 2025 | 2024 | Percentage Change | 2025 | 2024 | Percentage Change |
| Net earnings | $49,931 | $48,056 | 3.9% | $195,878 | $153,414 | 27.7% |
| Add: | | | | | | |
| Depreciation and amortization | 24,328 | 26,205 | (7.2)% | 99,921 | 109,738 | (8.9)% |
| Interest expense | 14,953 | 17,864 | (16.3)% | 64,393 | 76,408 | (15.7)% |
| Provision for income taxes | 15,060 | 16,346 | (7.9)% | 67,539 | 52,911 | 27.6% |
| EBITDA (non-GAAP) | 104,272 | 108,471 | (3.9)% | 427,731 | 392,471 | 9.0% |
| Share-based compensation | 4,449 | 3,912 | 13.7% | 19,249 | 17,172 | 12.1% |
| Fuel for Growth and Other | 7,211 | 6,191 | 16.5% | 23,691 | 31,951 | (25.9)% |
| Corporate HQ Relocation | 1,465 | - | 100.0% | (24,831) | - | 100.0% |
| Asset Impairment | - | - | - | 1,779 | - | 100.0% |
| Restructuring | - | (436) | 100.0% | - | (75) | 100.0% |
| Adjusted EBITDA (non-GAAP) | $117,397 | $118,138 | (0.6)% | $447,619 | $441,519 | 1.4% |
| | | Basis Point Change | | | Basis Point Change |
| Adjusted EBITDA as a percentage of net sales | | | | | | |
| Adjusted EBITDA margin | 12.4% | 12.6% | (20) | 12.1% | 11.9% | 20 |
| Free Cash Flow: | 2025 | 2024 | Percentage Change | 2025 | 2024 | Percentage Change |
| Cash flows from operating activities | $120,878 | $110,673 | 9.2% | $274,831 | $246,528 | 11.5% |
| Less: Payments for capital expenditures | 42,874 | 37,357 | 14.8% | 102,145 | 101,165 | 1.0% |
| Plus: Proceeds from sales of property and equipment | - | - | - | 43,574 | - | 100.0% |
| Free cash flow (non-GAAP) | $78,004 | $73,316 | 6.4% | $216,260 | $145,363 | 48.8% |
- For the twelve months ended September 30, 2025, represents the proceeds from the sale of our corporate headquarters.
Supplemental Schedule 5
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Store Count and Comparable Sales
| As of September 30, |
|---|
| 2025 | 2024 | Change |
|---|
| Number of stores: | | | |
| Sally stores | 3,096 | 3,129 | (33) |
| BSG: | | | |
| Company-operated stores | 1,194 | 1,200 | (6) |
| Franchise stores | 132 | 131 | 1 |
| Total BSG | 1,326 | 1,331 | (5) |
| Total consolidated | 4,422 | 4,460 | (38) |
| Number of BSG salon business consultants | 591 | 652 | (61) |
- BSG salon business consultants (SBC) include 182 and 190 sales consultants employed by our franchisees at September 30, 2025 and 2024, respectively.
| Three Months Ended September 30, | Twelve Months Ended September 30, |
|---|
| 2025 | 2024 | Basis Point Change | 2025 | 2024 | Basis Point Change |
|---|
| Comparable sales growth (decline): | | | | | | |
| Sally | 1.2% | 2.6% | (140) | 0.4% | (0.7)% | 110 |
| BSG | 1.4% | 1.3% | 10 | 0.2% | 1.6% | (140) |
| Consolidated | 1.3% | 2.0% | (70) | 0.3% | 0.3% | - |
Our comparable sales include sales from stores that have been operating for 14 months or longer as of the last day of a month and e-commerce revenue. Additionally, our comparable sales include sales to franchisees and full-service sales. Our comparable sales amounts exclude the effect of changes in foreign exchange rates and sales from stores relocated until 14 months after the relocation. Revenue from acquired stores is excluded from our comparable sales calculation until 14 months after the acquisition.
Contacts
Jeff Harkins
Investor Relations
940-297-4131 jharkins@sallybeauty.com