Sally Beauty (SBH) AI Stock Analysis

• Market Cap: $1.36B
• Dividend Yield: N/A
• Average Volume (3M): 1.64M
• Price to Earnings (P/E): 7.7
• Beta (1Y): 1.10
• Revenue Growth: -0.42%
• EPS Growth: 31.64%
• Country: US
• Employees: 12,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.48
• Shares Outstanding: 97,008,810
• 10 Day Avg. Volume: 1,481,053
• 30 Day Avg. Volume: 1,636,795
• PEG Ratio: 0.26
• Price to Book (P/B): 2.06
• Price to Sales (P/S): 0.44
• P/FCF Ratio: 9.49
• Enterprise Value/Market Cap: 2.03
• Enterprise Value/Revenue: 0.74
• Enterprise Value/Gross Profit: 1.44
• Enterprise Value/Ebitda: 6.83
• 1Y Price Target: $18.20
• Price Target Upside: 29.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.07
• Revenue Forecast (FY): $3.75B

• Rating: 64 Neutral
• Price Target: $14.50 ▲(3.50% Upside)
• Action: Reiterated Date: 02/09/26
• Date: Action: Reiterated 02/09/26

SBH scores as a mid-range opportunity: improving operating performance and cash generation are tempered by balance-sheet leverage, while technicals are constructive and valuation is attractive (low P/E). The latest earnings call adds support via a raised EPS floor and continued margin/cash-flow execution, but flat comps and category/promotional pressures remain key risks.

Positive Factors

Cash Generation

Sizable trailing‑twelve‑month operating cash flow (~$335M) and free cash flow (~$253M) create enduring internal funding for capex, store refreshes, share repurchases and debt paydown, reducing reliance on external capital and supporting multi‑period strategic flexibility.

Margin Resilience

Healthy gross margin (~51.6%) and solid EBIT margin (~8.2%) indicate a durable product/mix advantage (professional color strength) that cushions profitability against promotional cycles and supports sustainable operating earnings even with modest top‑line volatility.

Structural Cost Savings Program

The Fuel for Growth program is a multi‑year structural initiative targeting ~$45M of benefits in FY26 and a ~$120M cumulative run‑rate, permanently lowering operating cost base, improving margin durability, and funding reinvestment or continued deleveraging without relying solely on sales growth.

Negative Factors

Elevated Leverage

Leverage remains a structural constraint: debt‑to‑equity around ~2.0x historically limits balance‑sheet flexibility, raises interest and refinancing risk, and can constrain strategic investments or acquisitions, making the company more sensitive to macro shocks despite recent deleveraging progress.

Stagnant Comparable Sales

Flat consolidated comparable sales signal limited organic top‑line momentum, forcing reliance on cost cuts, product launches and share shifts to drive growth; sustained stagnation could pressure long‑term revenue scalability and returns on new store/refresh investments.

Promotional & SG&A Pressure

Incremental promotional activity and a $6M rise in adjusted SG&A (labor, rent, advertising) create recurring margin pressure; if persistent, these cost and promotional dynamics can erode the benefit of gross‑margin strength and require continual structural savings to preserve profitability.

Sally Beauty Business Overview & Revenue Model

Company Description

Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under third-party brands, such as Wella, Clairol, OPI, Conair, and L'Oreal, as well as exclusive-label brand merchandise. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under third-party brands, such as Paul Mitchell, Wella, Matrix, Schwarzkopf, Kenra, Goldwell, Joico, and Olaplex. As of September 30, 2021, the company operated 4,777 stores, including 134 franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. It also distributes its products through full-service/exclusive distributors, open-line distributors, direct sales, and mega-salon stores. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.

How the Company Makes Money

SBH makes money primarily by selling beauty products at retail and through professional distribution. Its core revenue stream is merchandise sales across categories such as hair color (including professional-grade color), shampoos and conditioners, styling products, nail products, and beauty tools/electricals. These sales are generated through two main routes: (1) direct-to-consumer retail via Sally Beauty Supply stores and online, where the company earns gross profit on product sales; and (2) sales to licensed beauty professionals and salons through Beauty Systems Group, which operates as a distributor carrying professional brands and supplies. Revenue is driven by transaction volume and average basket size across stores and digital channels, supported by private-label/exclusive items (which can contribute to earnings through higher product margin and differentiated assortment). Additional factors contributing to earnings include omnichannel fulfillment (e.g., ship-to-home and in-store pickup where offered), inventory and merchandising management to maintain product availability, and loyalty/promotional programs that encourage repeat purchases. Specific material partnerships, licensing arrangements, or brand-level revenue splits are null.

Sally Beauty Financial Statement Overview

Summary

Operations are improving with a meaningful TTM revenue rebound and steady margins alongside solid operating cash flow and free cash flow, but the balance sheet is the key drag due to elevated leverage (debt-to-equity ~2.0x), which limits flexibility and raises risk.

Income Statement

TTM (Trailing-Twelve-Months) revenue rebounded (+14.2%) after several years of modest declines, while profitability is steady-to-improving: gross margin is healthy (~51.6%) and EBIT margin is solid (~8.2%). Net margin remains modest (~5.3%), and recent annual results show some variability in operating profit versus prior peaks, suggesting earnings power is improving but not consistently compounding.

Balance Sheet

Leverage remains the key constraint. Debt-to-equity is elevated (about ~2.0x in the latest periods, and materially higher in earlier years), which reduces balance-sheet flexibility for a retailer. Equity has improved versus prior years, and return on equity is strong (mid-to-high 20s% in the latest periods), but that strength is partly amplified by leverage, keeping the risk profile above average.

Cash Flow

Cash generation is supportive: TTM (Trailing-Twelve-Months) operating cash flow is solid (~$335M) and free cash flow is strong (~$253M) with a sharp reported improvement in free cash flow growth. However, conversion vs. earnings looks mixed, with free cash flow running below net income in the latest data, which suggests working-capital or cash timing effects that can create year-to-year volatility.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	3.71B	3.70B	3.72B	3.73B	3.82B	3.87B
Gross Profit	1.92B	1.91B	1.89B	1.89B	1.94B	1.95B
EBITDA	403.89M	427.73M	393.50M	441.06M	493.06M	529.70M
Net Income	180.42M	195.88M	153.41M	184.60M	183.55M	239.86M
Balance Sheet
Total Assets	2.85B	2.87B	2.79B	2.73B	2.58B	2.85B
Cash, Cash Equivalents and Short-Term Investments	157.19M	149.16M	107.96M	123.00M	70.56M	400.96M
Total Debt	1.54B	1.56B	1.60B	1.68B	1.73B	1.94B
Total Liabilities	2.03B	2.08B	2.16B	2.22B	2.28B	2.57B
Stockholders Equity	823.57M	794.21M	628.53M	508.75M	293.64M	280.74M
Cash Flow
Free Cash Flow	216.76M	172.69M	145.36M	158.57M	57.25M	307.96M
Operating Cash Flow	334.61M	274.83M	246.53M	249.31M	156.50M	381.86M
Investing Cash Flow	-117.19M	-58.28M	-108.91M	-99.78M	-102.42M	-76.02M
Financing Cash Flow	-168.64M	-178.42M	-153.73M	-100.82M	-373.68M	-419.97M

Sally Beauty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBH, the sentiment is Negative. The current price of 14.01 is below the 20-day moving average (MA) of 15.15, below the 50-day MA of 15.52, and above the 200-day MA of 13.79, indicating a neutral trend. The MACD of -0.48 indicates Positive momentum. The RSI at 38.69 is Neutral, neither overbought nor oversold. The STOCH value of 13.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SBH.

Sally Beauty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SBH	64 Neutral	$1.36B	7.65	23.43%	―	-0.42%	31.64%
ULTA	63 Neutral	$23.51B	25.17	44.07%	―	5.45%	4.28%
CHWY	63 Neutral	$9.70B	57.58	55.17%	―	9.80%	-46.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BBWI	56 Neutral	$3.90B	7.11	-44.22%	4.16%	-1.04%	-20.88%
YSG	48 Neutral	$357.61M	-32.20	-13.99%	―	22.58%	33.18%
OLPX	46 Neutral	$890.31M	-96.53	-1.05%	―	-3.47%	-111.68%

Sally Beauty Corporate Events

Sally Beauty Announces Immediate Resignation of Board Director

On March 12, 2026, Sally Beauty Holdings, Inc. announced that director Erin Nealy Cox resigned from its Board of Directors, effective immediately, as she transitions to a new role at Walmart, Inc. The company stated there was no disagreement underlying her departure, noted that her term had been scheduled to run until the 2027 annual shareholders’ meeting, and publicly thanked her for her service and leadership.

The most recent analyst rating on (SBH) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Sally Beauty stock, see the SBH Stock Forecast page.

Sally Beauty Lifts EPS Outlook After Solid Q1 Results

On February 9, 2026, Sally Beauty Holdings reported first-quarter fiscal 2026 results for the period ended December 31, 2025, posting consolidated net sales of $943 million, up 0.6% year on year, with flat comparable sales and e-commerce contributing 11.7% of revenue. Despite a 22% drop in GAAP diluted EPS to $0.45, adjusted diluted EPS rose 12% to $0.48, supported by gross margin expansion and $93 million in operating cash flow, which funded debt reduction, $21 million of share repurchases, and left leverage at 1.5 times, prompting the company to raise the low end of its full-year EPS outlook while keeping sales and operating earnings guidance intact.

Segment results showed modest growth at the Sally Beauty unit and slightly lower sales but improved margins at Beauty Systems Group, underscoring stable but subdued demand across its channels. Management’s reaffirmed full-year revenue and operating earnings targets, alongside disciplined capital allocation and inventory reduction, signal a focus on margin resilience and shareholder returns in a competitive beauty retail environment.

The most recent analyst rating on (SBH) stock is a Buy with a $18.50 price target. To see the full list of analyst forecasts on Sally Beauty stock, see the SBH Stock Forecast page.

Sally Beauty Shareholders Approve Directors, Pay and Auditor

At its annual meeting of stockholders held on January 22, 2026, Sally Beauty Holdings’ shareholders elected ten directors to serve until the 2027 annual meeting, with all nominees receiving sufficient support to remain or join the board. Investors also backed the company’s executive compensation program in a non-binding advisory vote and ratified the appointment of KPMG LLP as independent auditor for the 2026 fiscal year, signaling continued shareholder support for the company’s governance practices and financial oversight framework.

The most recent analyst rating on (SBH) stock is a Buy with a $19.00 price target. To see the full list of analyst forecasts on Sally Beauty stock, see the SBH Stock Forecast page.