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How Investors May Respond To Sally Beauty Holdings (SBH) Margin Gains and Digital Growth Momentum

Simply Wall St·11/15/2025 06:20:45
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  • Sally Beauty Holdings recently reported fiscal fourth quarter and full-year 2025 results, showing net sales of US$3.70 billion and a year-over-year increase in net income and earnings per share, alongside new guidance for steady performance in 2026.
  • A key insight from the announcement is the company's continued investment in digital growth, exclusive brands, and store refresh initiatives, supported by a sizable ongoing share buyback program that has now reduced shares outstanding by over 32% since 2017.
  • We'll examine how Sally Beauty Holdings' improved margin performance and robust digital sales growth influence its investment narrative going forward.

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Sally Beauty Holdings Investment Narrative Recap

To be a shareholder in Sally Beauty Holdings, you need to believe in the company’s ability to drive consistent earnings and margin improvement through store refreshes and digital expansion, even as revenue growth remains modest. The recent fiscal 2025 results support the most immediate catalyst, digital sales gains and improved margins, but do not materially resolve the biggest short-term risk around sluggish overall sales growth and persistent consumer price sensitivity in core categories.

One of the most relevant announcements is the company’s new fiscal 2026 guidance, which projects flat to slightly higher comparable sales and ongoing margin strength. This ties directly to the digital and omnichannel initiatives that continue to support higher-margin sales but also reflect management’s cautious outlook on overall consumer spending trends.

Yet, with lingering questions about how quickly Sally Beauty can boost category revenues as shoppers trade down, investors should be aware that...

Read the full narrative on Sally Beauty Holdings (it's free!)

Sally Beauty Holdings' forecast anticipates $3.8 billion in revenue and $211.5 million in earnings by 2028. This scenario assumes a 1.3% annual revenue growth rate and a $17.5 million increase in earnings from the current $194.0 million.

Uncover how Sally Beauty Holdings' forecasts yield a $15.12 fair value, a 7% upside to its current price.

Exploring Other Perspectives

SBH Earnings & Revenue Growth as at Nov 2025
SBH Earnings & Revenue Growth as at Nov 2025

Three Simply Wall St Community members estimate fair values for Sally Beauty Holdings between US$15.13 and US$24.38. While opinions on valuation are wide ranging, the company's increased e-commerce growth could influence future results in ways that current estimates may not fully reflect.

Explore 3 other fair value estimates on Sally Beauty Holdings - why the stock might be worth just $15.12!

Build Your Own Sally Beauty Holdings Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.