Sally Beauty (SBH) AI Stock Analysis

• Market Cap: $1.48B
• Dividend Yield: N/A
• Average Volume (3M): 2.32M
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.97
• Revenue Growth: -0.38%
• EPS Growth: 35.78%
• Country: US
• Employees: 12,000
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Specialty Retail
• EPS (TTM): 0.51
• Shares Outstanding: 98,944,790
• 10 Day Avg. Volume: 2,516,455
• 30 Day Avg. Volume: 2,320,863
• PEG Ratio: -0.66
• Price to Book (P/B): 2.24
• Price to Sales (P/S): 0.38
• P/FCF Ratio: 9.70
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: 0.64
• Enterprise Value/Gross Profit: 1.24
• Enterprise Value/Ebitda: 6.18
• 1Y Price Target: $15.50
• Price Target Upside: 3.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 73 Outperform
• Price Target: $16.50 ▲(10.00% Upside)

Sally Beauty's overall stock score reflects strong technical indicators and valuation, supported by strategic initiatives and financial performance improvements. However, concerns about declining revenue and high leverage, along with overbought technical signals, temper the outlook.

Positive Factors

E-commerce Growth

Strong e-commerce growth driven by partnerships with platforms like DoorDash and Amazon reflects a robust digital strategy, enhancing market reach.

Operating Margin Expansion

Consistent operating margin expansion indicates effective cost management and operational efficiency, supporting long-term profitability.

Debt Reduction

Debt reduction enhances financial stability and flexibility, reducing interest burden and improving the balance sheet's health.

Negative Factors

Declining Revenue

A decline in net sales suggests challenges in maintaining market share and demand, potentially impacting future revenue growth.

High Leverage

High leverage poses financial risks, limiting the company's ability to invest in growth opportunities and increasing vulnerability to economic downturns.

Comparable Sales Decline

Declining comparable sales reflect challenges in maintaining customer engagement and competitive positioning, affecting long-term growth prospects.

Sally Beauty Business Overview & Revenue Model

Company Description

Sally Beauty Holdings, Inc. (SBH) is a leading retailer and distributor of professional beauty supplies, catering to both salon professionals and retail consumers. The company operates through two primary segments: Sally Beauty Supply, which offers a wide range of hair care, skin care, and nail care products, and Beauty Systems Group, which serves salon professionals with professional-grade products and tools. With a vast network of stores and e-commerce platforms, Sally Beauty provides access to a diverse assortment of beauty brands and products, making it a go-to destination for beauty enthusiasts and professionals alike.

How the Company Makes Money

Sally Beauty generates revenue through multiple key streams, primarily from the sale of beauty supplies across its retail and wholesale operations. The Sally Beauty Supply segment generates income from direct sales to consumers in its physical stores and online, offering a range of branded and private label products. The Beauty Systems Group focuses on serving salon professionals, providing them with professional products and tools, often through a membership model that offers exclusive discounts and services. Additionally, the company benefits from strategic partnerships with various beauty brands, allowing it to expand its product offerings and enhance customer loyalty. E-commerce sales have also become a significant revenue source, driven by increasing online shopping trends in the beauty industry.

Sally Beauty Financial Statement Overview

Summary

Sally Beauty's financial performance is mixed. Strong profitability and cash flow generation are offset by declining revenue and high leverage. The company needs to focus on revenue growth and debt management for future stability.

Income Statement

Sally Beauty's income statement shows a mixed performance. The TTM data indicates a gross profit margin of 51.39%, which is strong for the industry. However, the net profit margin is relatively low at 5.26%, and the revenue growth rate is negative, indicating a decline in sales. The EBIT and EBITDA margins are moderate, suggesting some operational efficiency, but the declining revenue is a concern.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.98, indicating significant leverage, which poses a risk. The return on equity is strong at 28.24%, showing effective use of equity to generate profits. However, the equity ratio is low, reflecting a reliance on debt financing, which could be a potential risk if not managed properly.

Cash Flow

Cash flow analysis shows positive trends, with a free cash flow growth rate of 12.24% in the TTM period. The operating cash flow to net income ratio is 0.51, indicating decent cash generation from operations. The free cash flow to net income ratio of 0.71 suggests a healthy conversion of profits into cash, supporting the company's liquidity position.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.69B	3.72B	3.73B	3.82B	3.87B	3.51B
Gross Profit	1.90B	1.89B	1.89B	1.92B	1.95B	1.72B
EBITDA	381.01M	392.47M	441.06M	365.22M	423.05M	272.79M
Net Income	194.00M	153.41M	184.60M	183.55M	239.86M	113.25M
Balance Sheet
Total Assets	2.74B	2.79B	2.73B	2.58B	2.85B	2.90B
Cash, Cash Equivalents and Short-Term Investments	112.80M	107.96M	123.00M	70.56M	400.96M	514.15M
Total Debt	1.51B	1.60B	1.68B	1.73B	1.94B	2.34B
Total Liabilities	1.98B	2.16B	2.22B	2.28B	2.57B	2.88B
Stockholders Equity	762.91M	628.53M	508.75M	293.64M	280.74M	15.44M
Cash Flow
Free Cash Flow	186.89M	145.36M	158.57M	57.25M	307.96M	316.03M
Operating Cash Flow	264.63M	246.53M	249.31M	156.50M	381.86M	426.89M
Investing Cash Flow	-57.82M	-108.91M	-99.78M	-102.42M	-76.02M	-123.78M
Financing Cash Flow	-193.76M	-153.73M	-100.82M	-373.68M	-419.97M	139.76M

Sally Beauty Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBH, the sentiment is Positive. The current price of 15 is above the 20-day moving average (MA) of 13.98, above the 50-day MA of 11.94, and above the 200-day MA of 10.34, indicating a bullish trend. The MACD of 0.86 indicates Positive momentum. The RSI at 70.37 is Negative, neither overbought nor oversold. The STOCH value of 90.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SBH.

Sally Beauty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ULTA	80 Outperform	$23.07B	19.72	48.52%	―	2.94%	4.57%
SBH	73 Outperform	$1.48B	8.08	28.94%	―	-0.38%	35.78%
CHWY	68 Neutral	$14.38B	97.80	34.48%	―	9.04%	-56.79%
BBWI	63 Neutral	$5.61B	8.09	-52.83%	2.94%	-0.18%	-18.95%
Sector *	61 Neutral	$18.16B	12.70	-2.51%	3.03%	1.44%	-15.67%
OLPX	55 Neutral	$960.60M	77.05	-0.15%	―	-3.43%	-102.60%
YSG	51 Neutral	$955.38M	―	-15.44%	―	11.67%	31.55%

Sally Beauty Corporate Events

Sally Beauty Reports Q3 2025 Results with Margin Growth

On August 5, 2025, Sally Beauty Holdings reported its third-quarter fiscal 2025 results, highlighting a 1.0% decrease in consolidated net sales to $933 million and a 0.4% drop in comparable sales. Despite these declines, the company achieved a fourth consecutive quarter of operating margin expansion and double-digit earnings per share growth, driven by its ‘Fuel for Growth’ program. The company also strengthened its balance sheet by repaying $21 million in term loan debt and repurchasing shares worth $13 million. Additionally, Sally Beauty raised its full-year adjusted operating margin guidance, reflecting confidence in its strategic initiatives amid a challenging macroeconomic environment.

Sally Beauty Updates By-Laws for Enhanced Governance

On July 2, 2025, Sally Beauty Holdings, Inc. adopted new Amended and Restated By-Laws to enhance procedural mechanics and disclosure requirements for stockholder nominations and proposals. These changes aim to improve transparency and governance by defining terms, requiring disclosures, and clarifying the powers of the Board and meeting chairs, impacting the company’s operational governance and stakeholder engagement.

Sally Beauty Appoints Max Rangel to Board

On June 12, 2025, Sally Beauty Holdings appointed Max Rangel, a seasoned executive with extensive experience in the consumer products industry, to its Board of Directors. Mr. Rangel’s appointment is expected to bring valuable insights and expertise to the company as it continues to focus on strategic initiatives and profitable growth, enhancing its position in the beauty industry.