Sally Beauty 2025 Q4 Earnings Beats Revenue Estimates with 1.3% Growth and 16% EPS Surge

Sally Beauty (SBH) reported fiscal 2025 Q4 earnings on Nov 14, 2025, surpassing revenue and EPS estimates. The company’s revenue grew 1.3% year-over-year to $947.08 million, while non-GAAP EPS surged 16% to $0.55. Guidance for 2026 includes $3.71–$3.77 billion in sales and $2–$2.10 in adjusted EPS, reflecting cautious optimism.

Revenue

Sally Beauty’s total revenue increased by 1.3% to $947.08 million in Q4 2025, outpacing the $935.03 million recorded in the prior-year period. The growth was driven by both segments: Sally Beauty Supply (SBS) and Beauty Systems Group (BSG). SBS, the retail-facing division, contributed $542 million in net sales, with comparable sales rising 1.2%. BSG, which serves professional markets, generated $406 million in revenue, supported by 1.4% comparable sales growth. Global e-commerce sales surged 34% year-over-year, accounting for 11% of total sales, underscoring the company’s digital momentum.

Earnings/Net Income

Sally Beauty’s non-GAAP EPS rose 16% to $0.55 in Q4 2025, significantly exceeding analyst estimates. Net income increased 3.9% to $49.93 million, reflecting improved profitability. The company’s gross margin expanded 100 basis points to 52.2%, and adjusted operating margin reached 9.4%. The EPS growth and sustained profitability for 19 consecutive years highlight the company’s operational resilience.

Post-Earnings Price Action Review

The strategy of buying SBH on revenue beats and holding for 30 days appears viable, supported by Sally Beauty’s strong Q4 performance. Recent financial results, including a 1.3% revenue increase and 16% EPS beat, suggest robust momentum. The company’s $120 million cost savings target under the Fuel for Growth program and $10 million CAPEX allocation further bolster confidence. However, macroeconomic risks, such as inflationary pressures and potential government policy impacts on low-income customers, warrant caution. Investors should balance the stock’s positive trajectory with vigilance against short-term volatility.

CEO Commentary

John C. Tyle, CEO, emphasized sustained growth in e-commerce and professional services despite supply chain challenges. Strategic investments in AI-driven inventory management and digital platforms aim to strengthen market positioning. Tyle reiterated commitments to sustainable beauty solutions and franchisee network resilience, maintaining a cautiously optimistic tone amid macroeconomic uncertainties.

Guidance

For 2026, Sally Beauty projects consolidated net sales of $3.71–$3.77 billion, with comparable sales flat to up 1%. Adjusted EPS is expected to range between $2.00 and $2.10, aligning with the current quarter’s $0.51. The company plans to maintain CAPEX at approximately $10 million annually, prioritizing technology upgrades and store modernization.

Additional News

1. Cost Savings Target: Sally Beauty aims to achieve $120 million in cumulative cost savings by 2026 through its Fuel for Growth program, enhancing profitability and cash flow.

2. Store Refresh Initiative: The Sally Ignited brand refresh, launched in 30 stores, focuses on improving customer engagement and dwell time, with plans to expand to 50 stores in 2026.

3. Capital Allocation: The company allocated 50% of its $78 million Q4 free cash flow to share repurchases, signaling confidence in long-term value creation.

Sally Beauty’s strategic focus on digital innovation, cost efficiency, and customer-centric initiatives positions it to navigate macroeconomic headwinds. While near-term risks persist, the company’s strong financial performance and clear growth levers offer a compelling case for cautious optimism.