Financial Data and Key Metrics Changes - For Q4, the company reported comparable sales growth of 1.3%, gross margin expansion of 100 basis points to 52.2%, adjusted operating margin of 9.4%, and a 10% increase in adjusted diluted earnings per share to $0.55 [4][22] - For the full year, the company achieved $3.7 billion in revenue, positive comparable sales, gross margin above 51%, and adjusted diluted earnings per share of $1.90, representing a 12% growth compared to the previous year [4][24] Business Line Data and Key Metrics Changes - In the Sally segment, net sales increased 1.4% to $542 million, with comparable sales up 1.2% and color sales increasing 8% [24][25] - The BSG segment saw net sales increase by 1.1% to $406 million, with comparable sales up 1.4% and color sales increasing by 5% [26][27] Market Data and Key Metrics Changes - Global e-commerce sales increased 15% to $105 million, representing 11% of total net sales [22] - E-commerce sales for Sally US and Canada grew by 34%, while BSG e-commerce sales increased 8% to $58 million [11][27] Company Strategy and Development Direction - The company is focusing on four key growth drivers: understanding and activating the customer, unlocking digital value, differentiating with product assortment and innovation, and accelerating new growth pathways [8][20] - The Sally Ignited initiative aims to transform the business into a modern beauty powerhouse, with plans for store refreshes and category expansions [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the Sally customer base and the effectiveness of strategic initiatives like licensed colorist on demand and digital marketplaces [36][66] - The company anticipates a challenging Q1 due to government shutdowns affecting lower-income consumers but expects recovery as the year progresses [66][68] Other Important Information - The company generated strong cash flow from operations of $275 million, with $119 million of debt paydown and over $50 million in share repurchases [5][28] - The Fuel for Growth program has generated cumulative run rate benefits of $74 million, with expectations for additional savings in fiscal 2026 [19][24] Q&A Session Summary Question: Key factors driving performance in Q4 - Management highlighted the strength of color sales in both segments, strong performance in digital marketplaces, and customer activation through the LCOD program [32][33] Question: Consumer environment and guidance - Management noted that the Sally customer remains resilient, with a focus on core color products, while lower-income consumers are showing some pressure due to government shutdowns [36][67] Question: Store remodel program update - The company has completed 30 store refreshes under the Sally Ignited initiative, with plans for an additional 50 locations in fiscal 2026 [45][46] Question: Long-term growth outlook - Management expressed confidence in achieving long-term growth targets, supported by customer activation, digital value, and category expansion [68][72]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported comparable sales growth of 1.3%, with a gross margin expansion of 100 basis points to 52.2% and adjusted operating margin of 9.4% [5][22] - Full year revenue reached $3.7 billion, with adjusted diluted earnings per share increasing by 12% to $1.90 [5][25] - The company generated strong cash flow from operations of $275 million, with over $50 million returned to shareholders through share repurchases [6][29] Business Line Data and Key Metrics Changes - In the Sally segment, net sales increased by 1.4% to $542 million, with comparable sales up 1.2% [25][26] - The BSG segment saw net sales increase by 1.1% to $406 million, with comparable sales up 1.4% [27][28] - E-commerce sales for Sally US and Canada grew by 34%, while global e-commerce sales increased by 15% to $105 million [12][23] Market Data and Key Metrics Changes - The company maintained a strong margin profile, with gross margin expanding 100 basis points to 52.2% in Q4, driven by the Fuel for Growth program [22][23] - The company expects to maintain a healthy margin profile in fiscal 2026, offsetting potential cost increases through vendor partnerships and sourcing optimization [23][24] Company Strategy and Development Direction - The company is focused on four key growth drivers: understanding and activating the customer, unlocking digital value, differentiating with product assortment, and accelerating new growth pathways [9][21] - The Sally Ignited initiative aims to enhance the customer experience through physical and digital refreshes, category expansion, and immersive experiences [17][18] - The company plans to refresh up to 1,500 stores, with 30 completed by the end of fiscal 2025 [18][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a complex environment, highlighting resilient customer behavior and strong performance in the color category [37][56] - The company anticipates continued growth in the core color category, with additional opportunities in care, nails, and new categories like skin and spa [50][61] - Management remains cautious about the impact of government shutdowns on lower-income consumers but expects a rebound as conditions improve [56][57] Other Important Information - The company generated cumulative run rate benefits of $74 million from the Fuel for Growth program, with expectations to reach $120 million by the end of fiscal 2026 [20][25] - The company is committed to returning approximately 50% of free cash flow to shareholders through share repurchases [21][30] Q&A Session Summary Question: Key factors driving performance in Q4 - Management noted strong color performance in both segments, with marketplaces outperforming and innovation driving positive sales growth in care [32][33] Question: Consumer environment and comp guidance - Management highlighted resilient customer behavior, particularly in the color category, while noting some pressure on lower-income consumers due to government shutdowns [36][37] Question: Update on store remodel program - The company has completed 30 store refreshes under the Sally Ignited initiative, with plans for 50 more in fiscal 2026 [40][42] Question: Long-term outlook for EBIT growth - Management expressed confidence in achieving long-term EBIT growth through top-line growth drivers and continued optimization from the Fuel for Growth program [47][48] Question: Expectations for category growth - Management anticipates continued growth in color, care, and nails, with new opportunities in skin and spa and other categories [50][61]