Sally Beauty Holdings, Inc., headquartered in Denton, Texas, is a leading retailer and distributor of professional beauty supplies. The company operates through two segments: Sally Beauty Supply, which offers beauty products for consumers, and Beauty Systems Group, providing professional products primarily for salons.

For the second quarter of fiscal 2025, ending March 31, the company recorded consolidated net sales of $883 million, reflecting a 2.8% decrease from the previous year. Consolidated comparable sales decreased by 1.3%. Notably, the Sally segment saw net sales drop to $501 million, a decline of 2.5%, while the Beauty Systems Group net sales fell to $383 million, down 3.2%.

Despite these declines in sales, Sally Beauty demonstrated operational strength with an adjusted operating margin of 8.5%, an increase of 90 basis points year-over-year, supported by gross margins expanding to 52%. The second quarter gross profit amounted to $458.8 million, a slight decrease of 0.9% from the previous year, but gross margin improved by 100 basis points due to lower distribution costs and improved product margins.

The adjusted EBITDA margin also increased by 90 basis points, reaching 11.9%. Adjusted earnings per share rose by 20% to $0.42. Cash flow from operations was reported at $51 million, and operating free cash flow totaled $32 million for the quarter.

Sally Beauty has updated its guidance for the fiscal year 2025. Comparable sales are now expected to be flat to down 1%, a revision from earlier expectations ranging from flat to up 2%. Consolidated net sales are anticipated to be impacted adversely through 75 basis points due to unfavorable foreign exchange rates. The adjusted operating margin guidance has also been lowered, now expected to fall between 8.0% to 8.5%.

The fiscal third quarter guidance suggests comparable sales could range from flat to down 2%, with net sales expected to be about 50 basis points lower than comparable sales due to currency impacts. The current inventory stands at approximately $1 billion, down 3% from last year, while the company continues to prioritize shareholder value, having repurchased $10 million worth of stock during the quarter and reduced debt by $36 million.

Overall, while facing external challenges impacting sales, Sally Beauty saw an improvement in margins and profitability metrics, demonstrating operational resilience amid a difficult market environment.