Sally Beauty’s results for Q2 were well received by the market, reflecting steady execution in a challenging environment. Management cited strong growth in the Sally segment, particularly in the U.S. and Canada, driven by increased customer transactions and ticket size. CEO Denise Paulonis pointed to color products as a standout, noting, “color was up 8%” in the Sally segment, along with positive e-commerce trends and higher engagement from the company’s Licensed Colorist On Demand service. The company’s ongoing cost discipline and improvements in gross margin contributed to stronger non-GAAP earnings.
Is now the time to buy SBH? Find out in our full research report (it’s free for active Edge members).
Sally Beauty (SBH) Q2 CY2026 Highlights:
- Revenue: $935.5 million vs analyst estimates of $938.3 million (flat year on year, in line)
- Adjusted EPS: $0.55 vs analyst estimates of $0.53 (3% beat)
- Adjusted EBITDA: $117.4 million vs analyst estimates of $115.3 million (12.5% margin, 1.8% beat)
- The company reconfirmed its revenue guidance for the full year of $3.73 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $2.06 at the midpoint
- Operating Margin: 9.2%, in line with the same quarter last year
- Locations: 4,386 at quarter end, down from 4,425 in the same quarter last year
- Same-Store Sales were flat year on year, in line with the same quarter last year
- Market Capitalization: $1.58 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sally Beauty’s Q2 Earnings Call
-
Julia Shelanski (TD Cowen) asked about early signals from the hair care planogram reset and fragrance sales. CEO Denise Paulonis said it is too early for metrics on the reset but noted store associate enthusiasm and described fragrance as a basket add for existing customers.
-
Susan Anderson (Canaccord Genuity) questioned the disparity between Sally U.S./Canada and international performance as well as the promotional environment. Paulonis explained strategic repositioning in Europe and softer demand in Mexico, and observed more patient, value-seeking customer behavior in response to promotions.
-
Olivia Tong Cheang (Raymond James) inquired about BSG challenges, especially in hair care and exclusivity. Paulonis cited the impact of last year’s K18 launch, highlighted strength in color and nails, and emphasized innovation and value messaging as key to reviving hair care sales.
-
Skylar Tennant (Morgan Stanley) probed whether income cohort pressures had broadened and asked about the durability of Fuel for Growth benefits. Paulonis said consumer resilience remains strong, with only modest trade-down behavior among lower-income shoppers. CFO Adrianne Lee expects gross margin gains to be more durable but is focused on ongoing SG&A efficiencies.
-
Sydney Wagner (Jefferies) asked about promotional intensity and unlocking hair care growth. Paulonis noted promotional activity is steady but more targeted, with care most pressured, and said the biggest unlock for care will be new assortments and focused value communication.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will track (1) the sales impact of Sally’s hair care assortment reset and new product launches, (2) the continued ramp of e-commerce and app-driven omnichannel engagement, and (3) the performance of Ignited store remodels relative to the broader fleet. We will also monitor whether cost savings from the Fuel for Growth program translate into sustained margin gains amid evolving consumer and promotional dynamics.
Sally Beauty currently trades at $16.83, up from $14.97 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
The Best Stocks for High-Quality Investors
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
