Sally Beauty (SBH) Q2 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Mon, June 1, 2026 astatine 11:26 AM CDT 37 min read

Image source: The Motley Fool.

DATE

Monday, May 11, 2026 astatine 8:30 a.m. ET

CALL PARTICIPANTS

• President & Chief Executive Officer — Denise Paulonis

• Chief Financial Officer — Adrianne Lee

Full Conference Call Transcript

Denise Paulonis: Thank you, Jeff, and bully morning, everyone. I'd similar to commencement by welcoming Adrianne to Sally Beauty Holdings. She's been with america conscionable nether 2 weeks present and lunged into her relation with tremendous vigor and focus. Adrianne brings heavy operational, strategical and fiscal expertise to our enforcement enactment team, and we are thrilled to person her onboard arsenic we proceed to beforehand our strategical initiatives and absorption connected semipermanent worth creation. Looking astatine our 2nd 4th performance. The results show the compounding benefits of our strategical maturation drivers. Total income of $903 million, up 2.3% versus past twelvemonth and comparable income maturation of 1.3% were astatine the precocious extremity of our expectations.

Strong gross margins and effectual outgo power enabled america to present bottommost enactment results supra our guidance scope with adjusted operating income coming successful astatine $73 cardinal and adjusted diluted EPS of $0.44. This drove beardown currency travel from operations of $73 million, which we utilize to proceed to put for growth, further strengthening our equilibrium expanse with $20 cardinal of indebtedness paydown and instrumentality worth to shareholders done $25 cardinal of stock repurchases. In our Sally segment, our lawsuit remained resilient, and we saw affirmative effect to our initiatives, including selling and personalization, integer enablement and merchandise innovation.

This drove conception comparable income maturation of 2.5%, highlighted by a comparable income summation of 4.4% successful our Sally U.S. and Canada concern with comparable transactions and mean transaction worth some up 2%. Our halfway colour class delivered different 4th of awesome show astatine Sally, up 11% connected a full conception ground and up 12% astatine Sally U.S. and Canada. Beyond spot successful color, we besides delivered a 3% maturation successful the nail category, and momentum continued to physique successful the fragrance category. After launching fragrance successful our apical 1,000 Sally U.S. stores past November, we expanded to 2,000 locations during fiscal Q2 and continued to spot results up of our expectations.

While trends successful haircare remained soft, show improved sequentially, and we are preparing for a class reset successful the 4th quarter, which volition see refined assortments and enhanced merchandising initiatives. Overall, the Sally conception delivered beardown results with a concern that is resilient, differentiated and good positioned for the future. Now moving to our BSG segment. We delivered improved profitability connected level apical enactment results with operating borderline up 90 ground points to 12.4%. From a class perspective, Color performed well, increasing 3% successful the quarter. We're successful the advancement connected initiatives successful the Care category, wherever income person been trending mostly level successful caller quarters. New brands, innovation and organisation enlargement proceed to beryllium priorities.