2Q: Margin Durability Intact While Modernization Proof Points Build At Sally

研报英文原文证据摘录

2Q: Margin Durability Intact While Modernization Proof Points Build At Sally

despite muted topline

growth.

Key Potential Catalysts Ahead: (1) Hair care Planogram (POG) reset in August, including SKU

rationalization, ~110 new SKUs, and expansion of the men’s set from 4 to 8 feet, representing

a key inflection opportunity to stabilize and reaccelerate a currently pressured category;

(2) Continued rollout of Sally Ignited store refreshes, with ~80 locations expected by fiscal

year-end, driving higher UPT, ATV, dwell time, and cross-category shopping versus the core

fleet, and setting the stage for a more scaled rollout in FY27; (3) Digital acceleration at Sally,

including ongoing app adoption benefits (higher conversion, AOV, lower cart abandonment,

greater BOPIS mix) and continued build-out of marketplaces and TikTok Shop; (4) Fuel for

Growth savings skewing to 2H, supporting gross margin and SG&A discipline and reinforcing

earnings resilience at modest comps; (5) BSG recovery initiatives, including expansion of skin

and spa from ~250 to ~500 stores in 4Q, newer brand launches and distribution expansion,

and early benefits from the updated BSG app as management focuses on stabilizing and then

reaccelerating pro demand.

2Q26 EPS +6% vs. Street on Margin Outperformance Despite Softer Comps

SBH delivered 2Q26 EPS of $0.44, beating Street estimates of ~$0.41 by ~6%, driven by better-

than-expected gross and operating margins, despite comps coming in slightly below consensus

(+1.3% vs. +1.4%). Segment performance was mixed, with Sally Beauty comps of +2.5% vs. Street

+1.1%, offset by Beauty Systems Group comps of -0.3% vs. +1.3%. Adjusted gross margin of 52.8%

exceeded Street by ~20bps, while adjusted operating margin of 8.1% came in ~40bps above

expectations.