Sally Beauty Holdings (NYSE:SBH) kicked off its fiscal year with a double-digit rise in adjusted earnings, prompting the professional beauty leader to raise the lower end of its full-year profit guidance despite a cautious consumer environment.
The Plano, Texas-based specialty retailer reported first-quarter consolidated net sales of $943 million, a modest 0.6% increase from the prior year.
While comparable store sales remained flat, the company successfully expanded its adjusted gross margin to 51.3%, driven by supply chain efficiencies and a high-margin product mix led by its core hair color category.
Adjusted diluted EPS rose 12% to $0.48, surpassing the $0.43 reported in the year-ago period.
"Our first quarter performance marks a strong start to fiscal 2026," said CEO Denise Paulonis.
"We achieved top-line results that met our expectations and delivered adjusted EPS growth consistent with our long-term financial algorithm."
The company’s digital pivot continues to gain traction, with global e-commerce sales reaching $111 million, now accounting for nearly 12% of total revenue.
During the quarter, Sally Beauty generated $93 million in operating cash flow, which it utilized to reduce debt and return approximately $20 million to shareholders through stock buybacks.