Sally Beauty Holdings Reports Second Quarter Fiscal 2026 Results

• Q2 Consolidated Net Sales Increased 2.3%; Consolidated Comparable Sales Increased 1.3%
• Q2 GAAP Diluted EPS Increased 13%; Adjusted Diluted EPS Increased 5%
• Q2 Cash Flow from Operations of $73 Million Deployed to Invest for Growth, Strengthen Balance Sheet and Return Value to Shareholders
• Fiscal 2026 Guidance: Company Tightens Net Sales Range and Reiterates All Other Metrics

Sally Beauty Holdings, Inc. (NYSE:SBH) (the "Company"), the leader in professional hair color, today announced financial results for its second quarter ended March 31, 2026. The Company will hold a conference call today at 7:30 a.m. Central Time to discuss these results and its business.

"Our second quarter results reflect solid execution and the resilience of our operating model amid a dynamic macroeconomic environment," said Denise Paulonis, president and chief executive officer. "We delivered low-single digit sales growth, gross margin expansion, and strong cash flow from operations, driven by the compounding benefits of our growth initiatives. As we enter the second half of fiscal 2026, we remain confident in our full-year outlook and believe the Company is positioned to deliver consistent, profitable growth and shareholder value over the long-term."

Fiscal 2026 Second Quarter Summary

• Consolidated net sales of $903 million, an increase of 2.3% compared to the prior year;
• Consolidated comparable sales growth of 1.3%;
• Global e-commerce sales increased 13% to $108 million, representing 12% of net sales;
• GAAP gross margin expansion of 70 basis points to 52.7%;
• Adjusted Gross Margin expansion of 80 basis points to 52.8%;
• GAAP selling, general and administrative expenses of $404 million, an increase of $14 million compared to the prior year;
• Adjusted Selling, General and Administrative Expenses of $404 million, an increase of $20 million compared to the prior year;
• GAAP operating earnings of $72 million and GAAP operating margin of 8.0%;
• Adjusted Operating Earnings of $73 million and Adjusted Operating Margin of 8.1%;
• GAAP diluted net earnings per share of $0.43, an increase of 13% compared to the prior year;
• Adjusted Diluted Net Earnings Per Share of $0.44, an increase of 5% compared to the prior year;
• Cash flow from operations of $73 million and Free Cash Flow of $44 million; and
• Completed $20 million in term loan repayment and $25 million in share repurchases.

Balance Sheet and Cash Flow

As of March 31, 2026, the Company had cash and cash equivalents of $157 million and no outstanding borrowings under its asset-based revolving line of credit. At fiscal year-end, inventory was $987 million, down 2% versus a year ago.

Second quarter cash flow from operations was $73 million and Free Cash Flow totaled $44 million. During the quarter, the Company utilized its cash flow to repay $20 million of term loan B debt and repurchase 1.7 million shares under its share repurchase program at an aggregate cost of $25 million. The Company ended the second quarter with a net debt leverage ratio of 1.5x.

Fiscal 2026 Second Quarter Segment Results

Fiscal Year 2026 Guidance*

Conference Call and Where You Can Find Additional Information

The Company will hold a conference call and live webcast at approximately 7:30 a.m. Central Time today, May 11, 2026, to discuss its financial results and its business. During the conference call, the Company may discuss and answer one or more questions concerning business and financial matters and trends affecting the Company. The Company's responses to these questions, as well as other matters discussed during the conference call, may contain or constitute material information that has not been previously disclosed.

Participants can listen to the live webcast of the conference call by accessing the investor relations section of the Company's website at sallybeautyholdings.com/investor-relations/events-and-presentations/events-calendar, or through our third-party host at SBH Q2 Earnings Webcast. To join the conference call, participants can pre-register to receive a dial-in number and unique PIN using the following link: Pre-register SBH Q2 Earnings Call. Pre-registration can be completed at any time up to and following the call start time.

A replay will be available on the Company's investor relations website after 10:00 a.m. Central Time on May 11, 2026, through May 11, 2027.

About Sally Beauty Holdings, Inc.

Sally Beauty Holdings, Inc. (NYSE:SBH), as the leader in professional hair color, sells and distributes professional beauty supplies globally through its Sally Beauty and Beauty Systems Group segments. Sally Beauty stores offer up to 7,000 products for hair color, hair care, nails, and skin care through proprietary brands such as Ion®, Bondbar®, Strawberry Leopard®, Generic Value Products®, Inspired by Nature® and Silk Elements® as well as professional lines such as Wella®, Clairol®, OPI®, L'Oreal®, Wahl® and Babyliss Pro®. Beauty Systems Group stores, branded as Cosmo Prof® or Armstrong McCall® stores, along with its outside sales consultants, sell up to 8,000 professionally branded products including Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico®, Amika® and Moroccanoil®, intended for use in salons and for resale by salons to retail consumers. For more information about Sally Beauty Holdings, Inc., please visit sallybeautyholdings.com/investor-relations.

Cautionary Notice Regarding Forward-Looking Statements

Statements in this news release and the schedules hereto that are not purely historical facts or that depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of words such as "believes," "projects," "expects," "can," "may," "estimates," "should," "plans," "targets," "intends," "could," "will," "would," "anticipates," "potential," "confident," "optimistic," or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters.

Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including the "Risk Factors" described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, and other filings with the U.S. Securities and Exchange Commission. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements.

Use of Non-GAAP Financial Measures

This news release and the schedules hereto include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States, ("GAAP"), and are therefore referred to as non-GAAP financial measures: (1) Adjusted Gross Margin; (2) Adjusted Selling, General and Administrative Expenses; (3) Adjusted EBITDA and EBITDA Margin; (4) Adjusted Operating Earnings and Operating Margin; (5) Adjusted Net Earnings; (6) Adjusted Diluted Net Earnings Per Share; and (7) Free Cash Flow. We have provided definitions below for these non-GAAP financial measures and have provided tables in the schedules hereto to reconcile these non-GAAP financial measures to the comparable GAAP financial measures.

Adjusted Gross Margin – We define the measure Adjusted Gross Margin as GAAP gross margin excluding the costs related to the Company's fuel for growth initiative for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Adjusted Selling, General and Administrative Expenses – We define the measure Adjusted Selling, General and Administrative Expenses as GAAP selling, general and administrative expenses excluding the costs related to the Company's fuel for growth initiative, expenses related to the Company's corporate headquarters relocation, and asset impairment charges for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Adjusted EBITDA and EBITDA Margin – We define the measure Adjusted EBITDA as GAAP net earnings before depreciation and amortization, interest expense, income taxes, share-based compensation, costs related to the Company's fuel for growth initiative, expenses related to the Company's corporate headquarters relocation, and asset impairment charges for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of net sales.

Adjusted Operating Earnings and Operating Margin – Adjusted operating earnings are GAAP operating earnings that exclude the costs related to the Company's fuel for growth initiative, expenses related to the Company's corporate headquarters relocation, and asset impairment charges for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Operating Margin is Adjusted Operating Earnings as a percentage of net sales.

Adjusted Net Earnings – Adjusted net earnings is GAAP net earnings that exclude the tax-effected costs related to the Company's fuel for growth initiative, tax-effected expenses related to the Company's corporate headquarters relocation, and tax-effected asset impairment charges for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Adjusted Diluted Net Earnings Per Share – Adjusted diluted net earnings per share is GAAP diluted earnings per share that exclude the tax-effected costs related to the Company's fuel for growth initiative, tax-effected expenses related to the Company's corporate headquarters relocation, and tax-effected asset impairment charges for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

Free Cash Flow – We define the measure Free Cash Flow as GAAP net cash provided by operating activities less payments for capital expenditures (net). We believe Free Cash Flow is an important liquidity measure that provides useful information to investors about the amount of cash generated from operations after taking into account payments for capital expenditures (net).

We believe that these non-GAAP financial measures provide valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry.

We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and Board of Directors also use these non-GAAP measures as supplemental measures to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe that these non-GAAP measures also provide meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. These non-GAAP measures should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies.

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Jeff Harkins

Investor Relations

940-297-4131

jharkins@sallybeauty.com