Sally Beauty (NYSE:SBH) Stock Price Down 7.8% - Here's What Happened

Key Points

• Sally Beauty shares fell 7.8% after a volatile session, closing near $12.94 as investors reacted to mixed signals from the company’s latest earnings report.
• The company beat Q2 expectations, posting EPS of $0.44 versus $0.41 expected and revenue of $903.4 million, while also reporting improved operating cash flow and profitability year over year.
• Despite the earnings beat, Q3 guidance came in below Wall Street forecasts, with projected EPS and revenue both trailing consensus estimates, which likely pressured the stock.

Sally Beauty Holdings, Inc. (NYSE:SBH - Get Free Report) shares fell 7.8% during mid-day trading on Monday . The company traded as low as $12.97 and last traded at $12.94. 272,280 shares changed hands during trading, a decline of 83% from the average session volume of 1,576,219 shares. The stock had previously closed at $14.03.

Key Headlines Impacting Sally Beauty

Here are the key news stories impacting Sally Beauty this week:

• Positive Sentiment: Sally Beauty reported Q2 EPS of $0.44 versus the $0.41 consensus and revenue of $903.4 million, slightly above estimates, showing the business is still growing modestly year over year.
• Positive Sentiment: Operating cash flow improved sharply and gross profit, operating profit, and net income all rose from a year ago, suggesting solid underlying execution and better profitability.
• Positive Sentiment: Management said results reflected “solid execution” and resilience, and the company tightened its outlook for fiscal 2026, which can signal greater confidence in the rest of the year.
• Neutral Sentiment: Several articles highlighted that the stock initially gained on the earnings beat and solid guidance before turning lower during the session, indicating a volatile investor reaction to the report.
• Negative Sentiment: Third-quarter guidance appears below Wall Street expectations, with EPS guidance of $0.52-$0.56 versus the $0.58 consensus and revenue guidance of $932 million-$942 million versus $947 million expected.
• Negative Sentiment: Some investors may also be focused on insider selling and recent institutional outflows, which could add pressure to sentiment even after the earnings beat.

Analyst Ratings Changes

Several research firms recently commented on SBH. Morgan Stanley raised their price objective on Sally Beauty from $14.00 to $16.00 and gave the company an "underweight" rating in a research note on Tuesday, February 10th. Raymond James Financial raised Sally Beauty from a "market perform" rating to an "outperform" rating and set a $19.00 price objective for the company in a research note on Wednesday, January 21st. Wall Street Zen raised Sally Beauty from a "hold" rating to a "buy" rating in a research note on Tuesday, March 10th. Jefferies Financial Group reissued a "hold" rating and issued a $16.00 price objective on shares of Sally Beauty in a research note on Wednesday, January 14th. Finally, Canaccord Genuity Group raised their price objective on Sally Beauty from $19.00 to $20.00 and gave the company a "buy" rating in a research note on Tuesday, February 10th. Three equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, Sally Beauty has an average rating of "Hold" and an average price target of $17.80.

Sally Beauty Stock Performance

The stock has a market capitalization of $1.26 billion, a P/E ratio of 7.37 and a beta of 1.07. The company has a debt-to-equity ratio of 1.02, a current ratio of 2.37 and a quick ratio of 0.57. The company has a 50 day simple moving average of $14.36 and a 200-day simple moving average of $14.97.

Sally Beauty (NYSE:SBH - Get Free Report) last posted its earnings results on Monday, May 11th. The specialty retailer reported $0.44 EPS for the quarter, topping the consensus estimate of $0.41 by $0.03. Sally Beauty had a return on equity of 26.07% and a net margin of 4.87%.The business had revenue of $903.38 million during the quarter, compared to analysts' expectations of $900.78 million. During the same period in the previous year, the business earned $0.42 earnings per share. The firm's revenue was up 2.3% on a year-over-year basis. Sally Beauty has set its Q3 2026 guidance at 0.520-0.560 EPS. On average, equities analysts forecast that Sally Beauty Holdings, Inc. will post 2.07 EPS for the current year.

Institutional Investors Weigh In On Sally Beauty

Several institutional investors have recently bought and sold shares of SBH. Bryce Point Capital LLC bought a new position in Sally Beauty during the 3rd quarter valued at approximately $570,000. SG Americas Securities LLC raised its position in Sally Beauty by 864.1% during the 4th quarter. SG Americas Securities LLC now owns 83,189 shares of the specialty retailer's stock valued at $1,186,000 after purchasing an additional 74,560 shares during the last quarter. Universal Beteiligungs und Servicegesellschaft mbH raised its position in Sally Beauty by 45.4% during the 4th quarter. Universal Beteiligungs und Servicegesellschaft mbH now owns 404,212 shares of the specialty retailer's stock valued at $5,771,000 after purchasing an additional 126,286 shares during the last quarter. American Century Companies Inc. raised its position in Sally Beauty by 174.4% during the 3rd quarter. American Century Companies Inc. now owns 1,660,831 shares of the specialty retailer's stock valued at $27,038,000 after purchasing an additional 1,055,669 shares during the last quarter. Finally, Teacher Retirement System of Texas raised its position in Sally Beauty by 58.7% during the 3rd quarter. Teacher Retirement System of Texas now owns 578,570 shares of the specialty retailer's stock valued at $9,419,000 after purchasing an additional 214,066 shares during the last quarter.

Sally Beauty Company Profile

Sally Beauty Holdings, Inc is a leading global specialty retailer and distributor of professional beauty supplies, serving both retail customers and salon professionals. The company operates two primary channels: Sally Beauty Supply, which offers a broad assortment of hair color, hair care, styling, and skincare products; and Beauty Systems Group (BSG), which provides salon-quality products and supplies to professional stylists and salon owners. With a focus on catering to diverse customer needs, Sally Beauty offers well-known brands alongside private label lines, positioning itself as a one-stop source for beauty professionals and enthusiasts alike.

Founded in 1964 and headquartered in Denton, Texas, Sally Beauty has grown through a combination of organic expansion and strategic acquisitions.

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