Sally Beauty Holdings ( (SBH) ) has released its Q2 earnings. Here is a breakdown of the information Sally Beauty Holdings presented to its investors.
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Sally Beauty Holdings, Inc. is a global leader in the professional beauty supply industry, specializing in hair color and hair care products through its Sally Beauty Supply and Beauty Systems Group segments. The company operates retail stores and distributes professional beauty products worldwide.
In its second quarter of fiscal 2025, Sally Beauty Holdings reported a mixed financial performance. The company achieved its third consecutive quarter of operating margin expansion, with a GAAP operating margin of 7.9% and an adjusted operating margin of 8.5%. Despite these gains, consolidated net sales decreased by 2.8% compared to the previous year, impacted by unfavorable foreign currency exchange rates and a reduction in store count.
Key financial highlights include a cash flow from operations of $51 million and an operating free cash flow of $32 million. The company strengthened its balance sheet by repaying $36 million in term loans and repurchasing $10 million in shares. Additionally, the board approved a four-year extension to the share repurchase program, allowing for further buybacks up to $501.1 million.
Segment-wise, Sally Beauty Supply saw a slight decline in net sales by 2.5% and Beauty Systems Group by 3.2%. However, both segments experienced an increase in gross margins due to lower distribution and freight costs. The company continues to focus on strategic initiatives and cost control to enhance profitability.
Looking ahead, Sally Beauty Holdings remains cautious about the macroeconomic environment but expects its adjusted operating margin to remain in the range of 8.0% to 8.5% for the full fiscal year 2025. The company is committed to maintaining a balanced capital allocation strategy to support growth and shareholder returns.