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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-33145 SALLY BEAUTY HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identific ...

Key Takeaways SBH posted Q3 adjusted EPS of 51 cents, beating the estimate and rising from 45 cents last year.Consolidated net sales of $933.3M matched estimates but declined 1% year over year.Comparable sales slipped 0.4% as macro headwinds offset gains in hair color and digital platforms.Sally Beauty Holdings, Inc. ((SBH) reported third-quarter fiscal 2025 results, with the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. However, consolidated net sales matched the consen ...

Sally Beauty Holdings (SBH) Q3 2025 Earnings Call August 05, 2025 08:30 AM ET Speaker0Good morning, everyone, and welcome to Sally Beauty Holdings' Conference Call to discuss the Company's Third Quarter Fiscal twenty twenty five Results. All participants have been placed in a listen only mode. After management's prepared remarks, there will be a question and answer session. Additional instructions will be given at that time. Now, I'd like to turn the call over to Jeff Harkins, Vice President of Investor Rel ...

Exhibit 99.1 Contact: Jeff Harkins Investor Relations 940-297-3877 jharkins@sallybeauty.com Third quarter consolidated net sales were $933.3 million, a decrease of 1.0% compared to the prior year. The Company was operating 35 fewer stores at the end of the quarter compared to the prior year and foreign currency translation had no impact on consolidated net sales for the quarter. Global e-commerce sales were $99 million, or 10.6% of consolidated net sales, for the quarter. Consolidated comparable sales decre ...

Company Overview - Sally Beauty Holdings Inc has $3.7 billion in net sales[7] - The company's gross margin is 50.9%[7] - Adjusted EBITDA is $442 million[7] - Approximately 34% of sales are from owned brands[7] - Around 53% of sales are from brands under exclusive/limited distribution agreements[8] Financial Performance & Strategy - Fuel for Growth initiative delivered $28 million benefit in FY24 and is expected to deliver $40+ million benefit in FY25[39] - The company refinanced senior secured notes in February 2024, reducing principal from $680 million to $600 million and extending maturity to FY2032[52] - The company's long-term debt totals $994 million, with $394 million in term loans and $600 million in senior notes[49] - The company aims to increase Sally's owned brand penetration from 34% to over 50%[32]

Industry Overview - The beauty and cosmetics industry has evolved into a multi-billion-dollar global market, driven by changing consumer preferences, cultural influences, and technological advancements [2] - Skincare has become a significant focus, with increased demand for products featuring natural ingredients and dermatologist-approved solutions, influenced by K-beauty and J-beauty trends [3] - Sustainability is shaping the future of the industry, with consumers prioritizing eco-friendly practices and transparency in ingredient sourcing [4] Technological Innovations - Technology is revolutionizing consumer interactions with beauty products through AI diagnostics, augmented reality try-ons, and biotech formulations [5] - The rise of dermocosmetics combines pharmaceutical-grade research with skincare, offering clinically proven results [5] Company Highlights Coty Inc. - Coty is strategically transforming its operations to enhance innovation and consumer-centric growth, focusing on prestige fragrances and skincare [7] - The company is expanding its fragrance offerings and targeting demographics like Gen Z and multicultural consumers, with a strong pipeline for fiscal 2026 [8] - E-commerce now represents nearly 20% of Coty's total sales, supported by partnerships with Amazon and initiatives on platforms like TikTok Shop [9] Ulta Beauty - Ulta Beauty leads the U.S. market through brand curation, digital innovation, and experiential retail, focusing on enhancing core operations and customer experiences [10] - The company is experiencing strong performance across fragrance, skincare, and wellness categories, with notable product launches and a growing interest in K-beauty [11] - Ulta's loyalty program and digital capabilities drive customer engagement, with over 45 million active loyalty members [12] Sally Beauty - Sally Beauty is adapting to market challenges through innovation and digital expansion, focusing on product innovation and omnichannel retail [13] - The company is enhancing its e-commerce presence through partnerships with major delivery services and offering virtual consultations [14] - Product innovation remains central to Sally Beauty's strategy, with new launches and revamped store formats to meet modern beauty trends [15]

Core Insights - Sally Beauty is enhancing its focus on nail innovation, accessibility, and self-expression to attract the next generation of beauty shoppers [2][3] - The company is expanding its nail product assortment to over 1,400 items, including various types of nail products, in response to growing consumer demand [1][3] Product Expansion - The expanded product lineup includes launches from popular brands such as Nailboo, KISS, Dashing Diva, and ASP, with a particular emphasis on gel and press-on nails [4][7] - Sally Beauty is implementing promotional offers during National Nail Week, including a "Buy 2 Get 1 Free" deal on select gel nails [6] Consumer Engagement - The retailer is leveraging expert-driven content to engage consumers, featuring tips and trends from its nail expert across digital channels [6] - Sally Beauty is enhancing the shopping experience with options like Buy Online, Pick Up In-Store, and two-hour delivery to meet consumer needs [5] Market Position - The nail category has become a significant entry point for new customers, indicating its growing importance in Sally Beauty's long-term strategy [3][4] - Sally Beauty Holdings, Inc. is recognized as a leader in professional beauty supplies, offering a wide range of products through its various brands [8]

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PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, highlighting decreases in assets and liabilities, alongside increased net earnings and diluted EPS for the quarter [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $2.71 billion, total liabilities to $2.01 billion, while stockholders' equity increased to $699.8 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | September 30, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,239,113 | $1,305,314 | | Inventory | $1,006,604 | $1,036,624 | | **Total assets** | **$2,705,873** | **$2,792,899** | | **Total current liabilities** | $533,291 | $592,669 | | Long-term debt | $902,794 | $978,255 | | **Total liabilities** | **$2,006,057** | **$2,164,364** | | **Total stockholders' equity** | **$699,816** | **$628,535** | [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Net sales decreased by 2.8% for the quarter, yet operating earnings rose 16.4% and net earnings increased 34.1% Key Earnings Data (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | $883,146 | $908,361 | (2.8)% | | Gross profit | $458,817 | $463,072 | (0.9)% | | Operating earnings | $69,373 | $59,574 | 16.4% | | Net earnings | $39,210 | $29,244 | 34.1% | | Diluted EPS | $0.38 | $0.27 | 40.7% | | **Metric** | **Six Months Ended Mar 31, 2025** | **Six Months Ended Mar 31, 2024** | **Change (%)** | | Net sales | $1,821,041 | $1,839,663 | (1.0)% | | Net earnings | $100,223 | $67,634 | 48.2% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow slightly decreased, investing activities turned positive due to asset sale, and financing cash use increased Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $84,521 | $87,960 | | Net cash provided (used) by investing activities | $4,232 | $(44,877) | | Net cash used by financing activities | $(103,659) | $(68,932) | | **Net decrease in cash and cash equivalents** | **$(15,787)** | **$(25,827)** | - Investing activities were positively impacted by **$43.6 million** in proceeds from the sale of property and equipment, which included the company's corporate headquarters[22](index=22&type=chunk)[39](index=39&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail accounting policies, debt, and segment performance, highlighting a **$26.6 million** gain from asset sale, debt repayments, and ABL facility extension - In the six months ended March 31, 2025, the company sold its corporate headquarters for **$45.5 million**, recognizing a gain of approximately **$26.6 million**[39](index=39&type=chunk) - During the six months ended March 31, 2025, the company voluntarily repaid **$75.0 million** of its outstanding Term Loan B principal (**$40.0 million** in Q1 and **$35.0 million** in Q2)[45](index=45&type=chunk) - For the six months ended March 31, 2025, the company repurchased **1.8 million shares** of its common stock for a total cost of **$20.0 million**[36](index=36&type=chunk) Segment Net Sales (in thousands) | Segment | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | SBS | $500,575 | $513,241 | $1,026,021 | $1,036,479 | | BSG | $382,571 | $395,120 | $795,020 | $803,184 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 2.8% sales decrease, 100 basis point gross margin improvement, 16.4% operating earnings increase, and strong liquidity - Consolidated comparable sales decreased by **1.3%** for the three months ended March 31, 2025[59](index=59&type=chunk) - Consolidated gross margin increased by **100 basis points** to **52.0%** for the quarter, driven by lower distribution/freight costs and enhanced promotional strategies[59](index=59&type=chunk)[65](index=65&type=chunk) - Unallocated selling, general and administrative expenses for the six-month period decreased by **$31.5 million**, primarily due to a **$26.6 million** gain on the sale of the corporate headquarters[80](index=80&type=chunk) - At March 31, 2025, the company had **$574.9 million** of available liquidity, comprising **$92.2 million** in cash and **$482.7 million** available under its ABL facility[83](index=83&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Both SBS and BSG segments experienced sales declines but improved gross margins, while unallocated corporate expenses decreased, boosting operating earnings Q2 2025 vs Q2 2024 Segment Performance | Segment | Net Sales Change | Comparable Sales Change | Gross Margin Change | | :--- | :--- | :--- | :--- | | SBS | (2.5)% | (0.3)% | +130 bps | | BSG | (3.2)% | (2.7)% | +40 bps | - The decrease in SBS net sales was driven by negative foreign currency exchange impact of **$7.8 million** and net store closures, with comparable sales slightly down by **0.3%**[62](index=62&type=chunk)[63](index=63&type=chunk) - The decrease in BSG net sales was primarily due to a **2.7%** decline in comparable sales, reflecting external factors impacting stylist purchasing behavior[63](index=63&type=chunk)[64](index=64&type=chunk) - Unallocated corporate expenses decreased by **$8.3 million** (**13.8%**) in Q2 2025, driven by lower professional fees and savings from the 'Fuel for Growth' initiative[68](index=68&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains **$574.9 million** in liquidity, with working capital slightly down, and has repaid debt and repurchased shares - Total outstanding debt principal was **$917.0 million** at March 31, 2025, consisting of **$600.0 million** in Senior Notes and **$317.0 million** on the Term Loan B[90](index=90&type=chunk) - In December 2024, the ABL facility was amended, extending the maturity date to **December 11, 2029**[44](index=44&type=chunk) - During the six months ended March 31, 2025, the company repurchased **1.1 million shares** for **$10.0 million** under its share repurchase program[95](index=95&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is subject to market risks, with no material changes reported since the prior fiscal year's 10-K filing - There have been no material changes to the company's market risks since the fiscal year ended September 30, 2024[100](index=100&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal controls - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures are effective at a reasonable assurance level[105](index=105&type=chunk) - There were no changes in internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[106](index=106&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings, not expected to materially impact its financial position or operations - The company does not expect ongoing legal proceedings to have a material adverse impact on its consolidated financial position, cash flows, or results of operations[108](index=108&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the company's risk factors since the prior fiscal year's 10-K filing - No material changes have occurred to the risk factors disclosed in the company's most recent Annual Report on Form 10-K[110](index=110&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased **1.1 million shares** for **$10.0 million**, with **$500.8 million** remaining under the program extended to September 2025 Issuer Purchases of Equity Securities (Quarter Ended March 31, 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value of Shares Remaining for Purchase | | :--- | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | — | $ — | $510,792,456 | | Feb 1 - Feb 28, 2025 | 426,613 | $9.32 | $506,816,515 | | Mar 1 - Mar 31, 2025 | 661,549 | $9.11 | $500,792,460 | | **Total this quarter** | **1,088,162** | **$9.19** | **$500,792,460** | - The share repurchase program, authorizing up to **$1.0 billion** in repurchases, was extended to **September 30, 2025**[36](index=36&type=chunk)[113](index=113&type=chunk) [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter[112](index=112&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report, including corporate documents, certifications, and financial statements