Sally Beauty Holdings, Inc. (NYSE:SBH) delivered stronger-than-expected fourth-quarter earnings on Thursday, sending its shares up 11.38% in early trading as the company outlined a confident view for the year ahead.
For the three months ending September 30, 2025, the beauty retailer reported adjusted earnings of $0.55 per share, well above the $0.45 analysts had expected. Quarterly revenue came in at $947 million, topping forecasts of $932.46 million and rising 1.3% from a year earlier. Consolidated comparable sales also increased 1.3%.
“We concluded the year with fourth quarter results that exceeded our expectations, highlighted by solid topline growth and healthy gross margins that drove 10% adjusted EPS growth and robust free cash flow,” said Denise Paulonis, president and chief executive officer.
The company’s gross margin widened by 100 basis points to 52.2%, while adjusted operating income reached $89 million, translating to a 9.4% operating margin. Sally Beauty generated $121 million in operating cash flow and produced $78 million in free cash flow for the quarter.
Looking ahead to fiscal 2026, Sally Beauty expects adjusted earnings of $2.00 to $2.10 per share—comfortably ahead of the analyst consensus of $1.82. The company forecasts revenue between $3.71 billion and $3.77 billion, again above expectations.
“As we enter fiscal 2026, we are emboldened by our resilient customers, defensible core categories and strategic initiatives built to drive growth and increase profitability,” Paulonis added.
Sally Beauty also rolled out long-term financial goals through fiscal 2028, including annual consolidated net sales growth of 1% to 3%, adjusted operating income growth of 3% to 5%, and more than 10% annual adjusted EPS expansion.
During the fourth quarter, the company paid down $21 million in term-loan debt and bought back 1.7 million shares for $20 million. It closed fiscal 2025 with a net debt leverage ratio of 1.6x and cash holdings of $149 million.