Sally Beauty Holdings, Inc.

Previous wording

Consolidated net sales for the three months ended December 31, 2025, increased $5.3 million, or 0.6%, to $943.2 million, compared to the three months ended December 31, 2024. Consolidated net sales included a positive impact from changes in foreign currency exchange rates of $8.5 million;

Current wording

Consolidated net sales for the three months ended March 31, 2026, increased $20.2 million, or 2.3%, to $903.4 million, compared to the three months ended March 31, 2025. Consolidated net sales included a positive impact from changes in foreign currency exchange rates of $12.8 million;

Previous wording

Consolidated comparable sales were flat for the three months ended December 31, 2025;

Current wording

Consolidated comparable sales were 1.3% for the three months ended March 31, 2026;

Previous wording

Consolidated gross profit for the three months ended December 31, 2025, increased $6.4 million, or 1.3%, to $483.3 million, compared to the three months ended December 31, 2024. Consolidated gross margin increased 40 bps to 51.2% for the three months ended December 31, 2025, compared to the three months ended December 31, 2024;

Current wording

Consolidated gross profit for the three months ended March 31, 2026, increased $17.0 million, or 3.7%, to $475.8 million, compared to the three months ended March 31, 2025. Consolidated gross margin increased 70 bps to 52.7% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025;

Previous wording

Consolidated operating earnings for the three months ended December 31, 2025, decreased $24.4 million, or 24.3%, to $75.9 million, compared to the three months ended December 31, 2024. Operating margin decreased 260 bps to 8.1% for the three months ended December 31, 2025, compared to the three months ended December 31, 2024;

Current wording

Consolidated operating earnings for the three months ended March 31, 2026, increased $2.6 million, or 3.7%, to $71.9 million, compared to the three months ended March 31, 2025. Operating margin increased 10 bps to 8.0% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025;

Previous wording

For the three months ended December 31, 2025, our consolidated net earnings decreased $15.5 million, or 25.3%, to $45.6 million, compared to the three months ended December 31, 2024;

Current wording

For the three months ended March 31, 2026, our consolidated net earnings increased $3.5 million, or 8.9%, to $42.7 million, compared to the three months ended March 31, 2025;

Previous wording

For the three months ended December 31, 2025, our diluted earnings per share was $0.45 compared to $0.58 for the three months ended December 31, 2024; and

Current wording

For the three months ended March 31, 2026, our diluted earnings per share was $0.43 compared to $0.38 for the three months ended March 31, 2025; and

Previous wording

Cash provided by operations was $93.2 million for the three months ended December 31, 2025, compared to $33.5 million for the three months ended December 31, 2024.

Current wording

Cash provided by operations was $73.3 million for the three months ended March 31, 2026, compared to $51.1 million for the three months ended March 31, 2025.

Previous wording

Unallocated expenses consist of corporate and shared costs and are included in selling, general and administrative expenses in our condensed consolidated statements of earnings. Additionally, unallocated expenses include costs associated with our Fuel for Growth initiative as well as the $26.6 gain related to the sale of our corporate headquarters during the three months ended December 31, 2024. See Note 7, Property and Equipment, Net, for more information related to the sale of our corporate headquarters.

Current wording

Unallocated expenses consist of corporate and shared costs and are included in selling, general and administrative expenses in our condensed consolidated statements of earnings. Additionally, unallocated expenses include certain costs associated with our Fuel for Growth initiative as well as the $26.6 million gain related to the sale of our corporate headquarters during the six months ended March 31, 2025. See Note 7, Property and Equipment, Net, for more information related to the sale of our corporate headquarters.

Previous wording

Sally. Sally’s gross profit increased for the three months ended December 31, 2025, as a result of an increase in net sales and a higher gross margin on units sold. Sally’s gross margin improvement was driven primarily by higher product margins, resulting from benefits from our Fuel for Growth initiative.

Current wording

Sally. Sally’s gross profit increased for the three months ended March 31, 2026, as a result of an increase in net sales and a higher gross margin on units sold. Sally’s gross margin improvement was driven primarily by higher product margins, resulting from benefits from our Fuel for Growth initiative, partially offset by impacts of the write-off of certain inventory related to the strategic exit of the majority of all our low-margin full service operations in Europe in connection with our Fuel for Growth initiative.

Previous wording

Sally. Sally’s selling, general and administrative expenses increased $6.7 million, or 2.9%, for the three months ended December 31, 2025, and included an unfavorable impact from foreign exchange rates of $3.5 million. As a percentage of Sally net sales, selling, general and administrative expenses for the three months ended December 31, 2025, were 45.2%, compared to 44.4% for the three months ended December 31, 2024. The increase as a percentage of sales was primarily due to increased labor and other compensation-related expenses, higher delivery and commission costs from digital marketplaces, and higher rent and advertising expenses, partially offset by Fuel for Growth benefits.

Current wording

Sally. Sally’s selling, general and administrative expenses increased $12.1 million, or 5.3%, for the three months ended March 31, 2026, and included an unfavorable impact from foreign exchange rates of $5.5 million. As a percentage of Sally net sales, selling, general and administrative expenses for the three months ended March 31, 2026, were 46.3%, compared to 45.8% for the three months ended March 31, 2025. The increase as a percentage of sales was primarily due to increased labor and other compensation-related expenses, higher commission costs from digital marketplaces, and higher rent and advertising expenses, partially offset by leveraging as a result of higher net sales, impacts of an impairment charge related to a trade name (non-cash expense of $1.8 million) in the prior year, and Fuel for Growth benefits.

Previous wording

BSG. BSG’s selling, general and administrative expenses decreased $1.7 million, or 1.5%, for the three months ended December 31, 2025. As a percentage of BSG net sales, selling, general and administrative expenses for the three months ended December 31, 2025, were 27.1% compared to 27.4% for the three months ended December 31, 2024. The decrease as a percentage of sales was primarily due to lower labor and other compensation-related expenses.

Current wording

BSG. BSG’s selling, general and administrative expenses increased $0.6 million, or 0.5%, for the three months ended March 31, 2026. As a percentage of BSG net sales, selling, general and administrative expenses for the three months ended March 31, 2026, were 28.5% compared to 28.4% for the three months ended March 31, 2025. The increase as a percentage of sales was primarily due to higher labor and other compensation-related expenses and rent expense, partially offset by lower depreciation and amortization expenses.

Previous wording

Sally's net sales increase was primarily driven by positive impacts from foreign exchange rates and a slight increase in comparable sales, partially offset by net stores closed during the past twelve months. The slight increase in comparable sales was primarily driven by strong growth in hair color and digital marketplaces, partially offset by external factors that impacted consumer spending, including the U.S. government shutdown, exiting substantially all of our full service operations across Europe, and softness in our hair care category. Sally’s comparable sales reflect an increase in average unit retail, partially offset by a decrease in transactions.

Current wording

Sally's net sales increase was primarily driven by positive impacts from foreign exchange rates and an increase in comparable sales, partially offset by net stores closed during the past twelve months. The increase in comparable sales was primarily driven by strong growth in hair color and digital marketplaces, partially offset by external factors that impacted consumer spending, including the U.S. government shutdown during the beginning of our fiscal year, softness in our hair care category, and the strategic exit of the majority of our full service operations across Europe. Sally’s comparable sales reflect increases in our average unit retail and number of transactions, partially offset by fewer average number of units per transaction.

Previous wording

BSG's net sales decrease was primarily from a decrease in comparable sales. The decrease in comparable sales was driven by external factors that impacted stylist purchasing behavior, including the U.S. government shutdown, partially offset by strong performance in our color category. BSG's comparable sales decrease was primarily a result of fewer average number of units per transaction and a decrease in transactions, partially offset by an increase in average unit retail.

Current wording

BSG's net sales decrease was primarily from a decrease in comparable sales. The decrease in comparable sales was driven by external factors that impacted stylist purchasing behavior, including the U.S. government shutdown during the beginning of our fiscal year, partially offset by strong performance in our color category. BSG's comparable sales decrease was primarily a result of a decrease in the number of transactions and average number of units per transaction, partially offset by an increase in average unit retail.

Previous wording

Unallocated. Unallocated selling, general and administrative expenses, which represent certain corporate costs that have not been charged to our reporting segments, increased $25.8 million, or 86.1%, for the three months ended December 31, 2025, primarily due to a $26.6 million gain on the sale of our corporate headquarters in the prior year.

Current wording

Unallocated. Unallocated selling, general and administrative expenses, which represent certain corporate costs that have not been charged to our reporting segments, increased $27.6 million or 33.7%, for the six months ended March 31, 2026, primarily due to a $26.6 million gain on the sale of our corporate headquarters in the prior year, higher facility expenses related to our new corporate headquarters, higher labor and other compensation-related expenses, and an increase in information technology expenses, partially offset by lower costs in connection with our Fuel for Growth initiative.

Previous wording

The effective tax rates were 25.7% and 26.4% for the three months ended December 31, 2025 and 2024, respectively. The decrease in the effective tax rate was primarily due to the tax impact of share-based compensation which was beneficial in the current quarter, but detrimental in the prior year quarter, and a foreign loss in the prior year quarter for which a tax benefit was not recognized, offset by higher federal tax credits in the prior year quarter.

Current wording

The effective tax rates were 25.9% and 26.3% for the six months ended March 31, 2026 and 2025, respectively. The decrease in the effective tax rate was primarily attributable to foreign operations and a more favorable tax impact of share‑based compensation in the current year, offset by higher federal tax credits in the prior year.

Previous wording

Our principal sources of liquidity are cash from operations, cash and cash equivalents and borrowings under our ABL facility. A substantial portion of our liquidity needs arise from funding the costs of our operations, working capital, capital expenditures, debt interest and principal payments. Additionally, under our share repurchase program (see below for more details) we will from time to time repurchase shares of our common stock on the open market to return value to our shareholders. At December 31, 2025, we had $639.6 million of available liquidity, which includes $482.4 million available for borrowing under our ABL facility and cash and cash equivalents of $157.2 million.

Current wording

Our principal sources of liquidity are cash from operations, cash and cash equivalents and borrowings under our ABL Facility. A substantial portion of our liquidity needs arise from funding the costs of our operations, working capital, capital expenditures, debt interest and principal payments. Additionally, under our share repurchase program (see below for more details) we will from time to time repurchase shares of our common stock on the open market to return value to our shareholders. At March 31, 2026, we had $639.7 million of available liquidity, which includes $482.3 million available for borrowing under our ABL Facility and cash and cash equivalents of $157.4 million.

Previous wording

Our working capital (current assets less current liabilities) increased $18.0 million, to $743.5 million at December 31, 2025, compared to $725.5 million at September 30, 2025. The increase was primarily driven by the timing of accrued compensation expenses within accrued expenses, timing of accounts payable, an increase in cash and cash equivalents, partially offset by the timing of income taxes payable, lower inventory, and the collection of landlord receivables related to our new corporate headquarters within accounts receivable, other.

Current wording

Our working capital (current assets less current liabilities) increased $13.8 million, to $739.3 million at March 31, 2026, compared to $725.5 million at September 30, 2025. The increase was primarily driven by the timing of accrued compensation and benefit expenses within accrued expenses and an increase in cash and cash equivalents, partially offset by the timing of landlord receivables related to our new corporate headquarters within accounts receivable, other.

Previous wording

The increase in cash provided by operating activities was primarily driven by the timing of accounts payable, lower income taxes paid, and the receipt of landlord receivables related to our new corporate headquarters.

Current wording

The increase in cash provided by operating activities was primarily driven by the timing of accounts payable, an increase in cash receipts from customers, lower income taxes paid, and the receipt of landlord receivables related to our new corporate headquarters, partially offset by strategic reduction in slower moving inventory in the prior year while maintaining consistent inventory levels this year.

Previous wording

The change in our investing activities was a result of lapping the cash received of $44.0 million from the sale of our corporate headquarters in the prior year and higher capital expenditures in the current year, which includes the build out of our new corporate headquarters.

Current wording

The change in our investing activities was a result of lapping the cash received of $44 million from the sale of our corporate headquarters in the prior year and higher capital expenditures in the current year, which includes the build out of our new corporate headquarters.

Previous wording

At December 31, 2025, we had $855.0 million in outstanding debt principal, excluding unamortized debt issuance costs and debt discounts, in the aggregate, of $8.5 million. Our debt consists of $600.0 million in 2032 Senior Notes outstanding, and $255.0 million remaining on our Term Loan B. There were no outstanding borrowings under our ABL facility.

Current wording

At March 31, 2026, we had $835.0 million in outstanding debt principal, excluding unamortized debt issuance costs and debt discounts, in the aggregate, of $7.9 million. Our debt consists of $600.0 million in 2032 Senior Notes outstanding, and $235.0 million remaining on our Term Loan B.

Previous wording

We utilize our ABL facility for the issuance of letters of credit, certain working capital and liquidity needs, and to manage normal fluctuations in our operational cash flow. In that regard, we may from time to time draw funds under the ABL facility for general corporate purposes including funding of capital expenditures, acquisitions, paying down other debt and share repurchases. Amounts drawn on our ABL facility are generally paid down with cash provided by our operating activities. During the three months ended December 31, 2025, there were no borrowings under the ABL facility.

Current wording

We utilize our ABL Facility for the issuance of letters of credit, certain working capital and liquidity needs, and to manage normal fluctuations in our operational cash flow. In that regard, we may from time to time draw funds under the ABL Facility for general corporate purposes including funding of capital expenditures, acquisitions, paying down other debt and share repurchases. Amounts drawn on our ABL Facility are generally paid down with cash provided by our operating activities. During the six months ended March 31, 2026, there were no borrowings under the ABL Facility.

Previous wording

The following table presents the summarized statement of earnings information for the Issuers and the Guarantors for the three months ended December 31, 2025 (in thousands):

Current wording

The following table presents the summarized statement of earnings information for the Issuers and the Guarantors for the six months ended March 31, 2026 (in thousands):

Previous wording

Under our current share repurchase program, we may from time to time repurchase our common stock on the open market. During the three months ended December 31, 2025 and 2024, we repurchased 1.4 million shares and 0.8 million shares of our common stock for $20.7 million and $10.0 million, respectively, under our share repurchase program, excluding the impact of excise taxes. See Note 5, Stockholders’ Equity, for more information about our share repurchase program.

Current wording

Under our current share repurchase program, we may from time to time repurchase our common stock on the open market. During the six months ended March 31, 2026 and 2025, we repurchased 3.0 million shares and 1.8 million shares of our common stock for $46.0 million and $20.0 million, respectively, under our share repurchase program, excluding the impact of excise taxes. See Note 5, Stockholders’ Equity, for more information about our share repurchase program.