Sally Beauty beats Q1 profit beats estimates, raises FY forecast

Overview

• Professional hair color leader's Q1 revenue slightly beat analyst expectations

• Adjusted EPS for Q1 beat analyst expectations

• Company used cash flow to invest in growth, reduce debt, and repurchase shares

Outlook

• Sally Beauty expects Q2 net sales between $895 mln and $905 mln and adjusted EPS of $0.39 to $0.42

• Company forecasts Q2 comparable sales growth of 0.5% to 1.5%

• Company reaffirms FY 2026 net sales guidance of $3.71-$3.77 bln, with comparable sales flat to up 1%

• Company adjusts FY 2026 adjusted EPS guidance to $2.02-$2.10 from $2.00-$2.10

Result Drivers

• STRATEGIC INITIATIVES - Co credited strategic initiatives for driving growth and profitability, per CEO Denise Paulonis

• CASH FLOW UTILIZATION - Strong cash flow from operations allowed investment in growth, debt reduction, and share repurchases

• GROSS MARGIN EXPANSION - Co reported gross margin expansion of 40 basis points to 51.2%

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the miscellaneous specialty retailers peer group is "buy."

• Wall Street's median 12-month price target for Sally Beauty Holdings Inc is $18.00, about 11.4% above its February 6 closing price of $16.16

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release: ID:nBw8TSC0Na

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