Sally Beauty(SBH) - 2026 Q1 - Quarterly Report

Financial Performance - Consolidated net sales for the three months ended December 31, 2025, increased by $5.3 million, or 0.6%, to $943.2 million compared to the same period in 2024[65] - Consolidated gross profit for the three months ended December 31, 2025, increased by $6.4 million, or 1.3%, to $483.3 million, with a gross margin increase of 40 bps to 51.2%[65] - Consolidated operating earnings decreased by $24.4 million, or 24.3%, to $75.9 million, with an operating margin decrease of 260 bps to 8.1%[65] - Consolidated net earnings decreased by $15.5 million, or 25.3%, to $45.6 million, with diluted earnings per share at $0.45 compared to $0.58 in the prior year[65] - Net sales for the three months ended December 31, 2025, were reported at $755,683, with a gross profit of $394,766[90] - Net earnings for the three months ended December 31, 2025, were $38,294, reflecting the company's profitability during this period[90] Cash Flow and Liquidity - Cash provided by operations was $93.2 million for the three months ended December 31, 2025, compared to $33.5 million for the same period in 2024[65] - At December 31, 2025, the company had $639.6 million of available liquidity, including $482.4 million available for borrowing under the ABL facility[79] - The company anticipates that existing cash balances and cash expected to be generated by operations will be sufficient to fund working capital and capital expenditure requirements over the next twelve months[81] - Cash and cash equivalents increased from $85,360 as of September 30, 2025, to $88,091 as of December 31, 2025[90] Expenses and Liabilities - Unallocated selling, general and administrative expenses increased by $25.8 million, or 86.1%, primarily due to a prior year gain on the sale of corporate headquarters[76] - Current liabilities decreased from $474,079 as of September 30, 2025, to $452,242 as of December 31, 2025[90] - Total liabilities decreased from $1,883,754 as of September 30, 2025, to $1,845,058 as of December 31, 2025[90] Shareholder Actions - The company repurchased 1.4 million shares of common stock for $20.7 million during the three months ended December 31, 2025, compared to 0.8 million shares for $10.0 million in the same period of 2024[91] Tax and Compliance - The effective tax rates were 25.7% for the three months ended December 31, 2025, compared to 26.4% for the same period in 2024[78] - The company remains in compliance with its debt agreements and financial covenants[88] Assets and Accounting - As of December 31, 2025, total assets for the Issuers and Guarantors amounted to $2,159,366, a decrease from $2,177,968 as of September 30, 2025[90] - There have been no material changes to critical accounting estimates or assumptions since September 30, 2025[94] - The company has no off-balance sheet financing arrangements other than outstanding letters of credit related to inventory purchases as of December 31, 2025[93]