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.
Buoyed by the steady demand in its professional Beauty Systems Group (BSG) and resilient hair color sales at Sally stores, the company narrowed its full-year adjusted diluted EPS guidance to $2.02–$2.10, up from the previous floor of $2.