Sally Beauty 2025 Q2 Earnings Strong Performance as Net Income Rises by 34%
Generated by AI AgentAinvest Earnings Report Digest
Tuesday, May 13, 2025 5:52 am ET2min read
SBH--
Sally Beauty Holdings, Inc. (SBH) reported its fiscal 2025 Q2 earnings on May 12th, 2025. Sally BeautySBH-- exceeded expectations with a significant rise in net income, bolstered by a 39.3% increase in EPS despite a decline in revenue. The company adjusted its fiscal 2025 guidance in line with current business trends, reflecting a cautious outlook amid macroeconomic uncertainties. Sally Beauty plans to repurchase approximately $20 million of stock and repay a similar amount of debt during the third quarter, showcasing its commitment to strategic financial management.
Revenue
Sally Beauty's total revenue decreased by 2.8% to $883.15 million in 2025 Q2, compared to $908.36 million in 2024 Q2. Sally Beauty Supply contributed $500.57 million, while Beauty Systems Group added $382.57 million. There were no unallocated expenses, keeping the total revenue at $883.15 million.
Earnings/Net Income
Sally Beauty's EPS rose 39.3% to $0.39 in 2025 Q2 from $0.28 in 2024 Q2, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $39.21 million in 2025 Q2, marking 34.1% growth from $29.24 million in 2024 Q2. The Company has sustained profitability for 19 years over the corresponding fiscal quarter, reflecting stable business performance. The increase in EPS indicates a strong financial position.
Price Action
The stock price of Sally Beauty jumped 11.63% during the latest trading day, surged 24.44% during the most recent full trading week, and increased by 17.83% month-to-date.
Post-Earnings Price Action Review
Over the past five years, buying Sally Beauty shares after their revenue raise on the financial report release date and holding for 30 days resulted in poor performance. This strategy yielded a total return of -24.10%, significantly underperforming the benchmark return of 95.08%. The strategy's Sharpe ratio was -0.10, indicating a lack of risk-adjusted returns, while the maximum drawdown was -74.34%, highlighting its high risk. With a CAGR of -5.40% and a volatility of 51.59%, the strategy faced significant challenges, making it unfeasible for investors seeking long-term growth. Despite the stock's recent positive movement, historical data suggests caution for investors using this specific post-earnings strategy.
CEO Commentary
Denise Paulonis, President and CEO, expressed satisfaction with delivering a 10% increase in adjusted operating earnings and 20% growth in adjusted earnings per share despite a challenging environment. She noted that while Sally's comparable sales dipped slightly, the company continued to see strong growth in core categories like color and benefited from its digital marketplace strategy. Paulonis emphasized that strategic initiatives, including enhancing customer centricity and product innovation, remain crucial. She acknowledged the uncertain macroeconomic backdrop but maintained an optimistic outlook, stating, "We are operating from a position of strength."
Guidance
Sally Beauty updated its fiscal 2025 guidance, anticipating comparable sales to be flat to down 1%, with consolidated net sales expected to be approximately 75 basis points lower than comparable sales due to foreign exchange impacts. The adjusted operating margin is projected to range between 8% to 8.5%. For Q3, comparable sales are expected to be flat to down 2%, with consolidated net sales similarly affected by foreign exchange. The company plans to repurchase approximately $20 million of stock and repay about $20 million of debt during the third quarter.
Additional News
Sally Beauty Holdings has announced an extension to its share repurchase program, with the Board of Directors approving an additional four-year period ending on September 30, 2029. This extension authorizes the company to repurchase its common stock up to the remaining amount of $501.1 million under the initial 2017 authorization. This move emphasizes Sally Beauty's commitment to returning value to shareholders and optimizing its capital allocation strategy amidst challenging market conditions. Additionally, the company has focused on strengthening its balance sheet by repaying $36 million of term loan debt, further showcasing its prudent financial management approach.
Revenue
Sally Beauty's total revenue decreased by 2.8% to $883.15 million in 2025 Q2, compared to $908.36 million in 2024 Q2. Sally Beauty Supply contributed $500.57 million, while Beauty Systems Group added $382.57 million. There were no unallocated expenses, keeping the total revenue at $883.15 million.
Earnings/Net Income
Sally Beauty's EPS rose 39.3% to $0.39 in 2025 Q2 from $0.28 in 2024 Q2, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $39.21 million in 2025 Q2, marking 34.1% growth from $29.24 million in 2024 Q2. The Company has sustained profitability for 19 years over the corresponding fiscal quarter, reflecting stable business performance. The increase in EPS indicates a strong financial position.
Price Action
The stock price of Sally Beauty jumped 11.63% during the latest trading day, surged 24.44% during the most recent full trading week, and increased by 17.83% month-to-date.
Post-Earnings Price Action Review
Over the past five years, buying Sally Beauty shares after their revenue raise on the financial report release date and holding for 30 days resulted in poor performance. This strategy yielded a total return of -24.10%, significantly underperforming the benchmark return of 95.08%. The strategy's Sharpe ratio was -0.10, indicating a lack of risk-adjusted returns, while the maximum drawdown was -74.34%, highlighting its high risk. With a CAGR of -5.40% and a volatility of 51.59%, the strategy faced significant challenges, making it unfeasible for investors seeking long-term growth. Despite the stock's recent positive movement, historical data suggests caution for investors using this specific post-earnings strategy.
CEO Commentary
Denise Paulonis, President and CEO, expressed satisfaction with delivering a 10% increase in adjusted operating earnings and 20% growth in adjusted earnings per share despite a challenging environment. She noted that while Sally's comparable sales dipped slightly, the company continued to see strong growth in core categories like color and benefited from its digital marketplace strategy. Paulonis emphasized that strategic initiatives, including enhancing customer centricity and product innovation, remain crucial. She acknowledged the uncertain macroeconomic backdrop but maintained an optimistic outlook, stating, "We are operating from a position of strength."
Guidance
Sally Beauty updated its fiscal 2025 guidance, anticipating comparable sales to be flat to down 1%, with consolidated net sales expected to be approximately 75 basis points lower than comparable sales due to foreign exchange impacts. The adjusted operating margin is projected to range between 8% to 8.5%. For Q3, comparable sales are expected to be flat to down 2%, with consolidated net sales similarly affected by foreign exchange. The company plans to repurchase approximately $20 million of stock and repay about $20 million of debt during the third quarter.
Additional News
Sally Beauty Holdings has announced an extension to its share repurchase program, with the Board of Directors approving an additional four-year period ending on September 30, 2029. This extension authorizes the company to repurchase its common stock up to the remaining amount of $501.1 million under the initial 2017 authorization. This move emphasizes Sally Beauty's commitment to returning value to shareholders and optimizing its capital allocation strategy amidst challenging market conditions. Additionally, the company has focused on strengthening its balance sheet by repaying $36 million of term loan debt, further showcasing its prudent financial management approach.
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