Sally Beauty Holdings Inc

Sally Beauty Holdings said its Fuel for Growth program delivered $9 million in pre-tax benefits in the third quarter of 2026, lifting adjusted gross margin 40 basis points year over year to 52.4%. The gains spanned both operating segments, with the Sally segment's gross margin up 60 basis points to 61.5% and its operating margin up 80 basis points to 16.6%, while the BSG segment's gross margin rose 70 basis points to 40.1%. Fuel for Growth also provided $2 million in SG&A cost offsets in the quarter, helping absorb higher labor and rent expenses. For fiscal 2026, Sally Beauty remains on track to deliver approximately $45 million in savings, which would bring the program to roughly $120 million in cumulative run-rate savings over the three-year period.

Sally Beauty shares have declined 1.2% since the company reported third-quarter fiscal 2026 earnings, though the stock initially jumped 7.8% after the results. Adjusted earnings of 55 cents per share beat the consensus estimate of 53 cents and rose 7.8% year over year, while net sales of $935.5 million increased 0.2% but slightly missed expectations. The company narrowed its full-year net sales guidance to $3.725-$3.733 billion and raised the low end of its adjusted EPS outlook to $2.04-$2.08. Management highlighted strength in color products and digital growth, with e-commerce sales up 11% to $110 million, while the Beauty Systems Group segment saw a 2.4% sales decline due to softness in the Care category. The company also repurchased 1.9 million shares for $25 million during the quarter.

Best Buy will announce its Q2 earnings on Thursday before market open, with analysts expecting revenue to grow 1.5% year on year, in line with the 1.6% increase recorded in the same quarter last year. The company beat revenue expectations last quarter with $8.94 billion, up 1.9% year on year, but its full-year EPS guidance slightly missed estimates. Analysts have generally reconfirmed their estimates over the last 30 days, and Best Buy has missed revenue estimates multiple times over the past two years. Peers Warby Parker and Sally Beauty have already reported Q2 results, with Warby Parker missing revenue expectations by 1% and Sally Beauty meeting them, leading to respective share price moves of -9.6% and +10.6%. Best Buy shares are down 3.1% over the last month, trading at $85.70, with an average analyst price target of $83.40.

Sally Beauty Holdings posted fiscal third-quarter 2026 adjusted earnings of 55 cents per share, beating the Zacks Consensus Estimate of 53 cents. Net sales edged up 0.2% to $935.5 million while comparable sales were flat. The company narrowed its fiscal 2026 net sales guidance to $3.725-$3.733 billion from $3.725-$3.750 billion, and adjusted earnings guidance to $2.04-$2.08 per share from $2.02-$2.10. Sally Beauty Supply net sales rose 2.2% to $538.6 million, but Beauty Systems Group net sales fell 2.4% to $396.9 million. Fuel for Growth delivered $9 million of pretax benefits in the quarter, and management still expects approximately $45 million of fiscal 2026 benefits.

Shares of Sally Beauty Holdings rose after the specialty retailer reported progress toward sustainable earnings growth. Net sales inched up 0.2% year over year to $935 million in its fiscal third quarter, while comparable sales for stores open at least 14 months climbed 1.6% and e-commerce sales rose 11% to $110 million. Adjusted net earnings increased 4% to $54 million, and adjusted earnings per share climbed 8% to $0.55, boosted by stock buybacks. The company generated $62 million in free cash flow and raised its full-year earnings per share guidance to $2.04 to $2.08 on sales of roughly $3.7 billion. CEO Denise Paulonis said new categories such as fragrances and men's products should help Sally Beauty win more market share.