Sally Beauty (SBH) Receives Upgrade to Buy: Reasons Explained
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 08 2025
0mins
Should l Buy SBH?
Source: NASDAQ.COM
Sally Beauty Upgrade: Sally Beauty (SBH) has been upgraded to a Zacks Rank #2 (Buy) due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price.
Earnings Estimates Impact: The Zacks rating system emphasizes the correlation between earnings estimate revisions and stock price movements, suggesting that rising estimates can lead to higher stock valuations.
Zacks Rank System: The Zacks Rank system classifies stocks based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating, highlighting Sally Beauty's strong position in this context.
Future Earnings Projections: Analysts have raised their earnings estimates for Sally Beauty, projecting earnings of $2.06 per share for the fiscal year ending September 2026, which remains unchanged from the previous year.
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Analyst Views on SBH
Wall Street analysts forecast SBH stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for SBH is 15.88 USD with a low forecast of 13.00 USD and a high forecast of 19.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
4 Analyst Rating
2 Buy
1 Hold
1 Sell
Hold
Current: 16.160
Low
13.00
Averages
15.88
High
19.00
Current: 16.160
Low
13.00
Averages
15.88
High
19.00
About SBH
Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies. The Company operates in two business segments: Sally Beauty Supply and Beauty Systems Group, which offers beauty products in key categories, including hair care, hair color, styling tools and nails. Sally Beauty Supply is an omni-channel retailer that offers professional beauty supplies and provides education to retail consumers and salon professionals throughout North America, South America and Europe. Sally Beauty Supply stores offer up to 7,000 products for hair color, hair care, nails, and skin care through proprietary brands, such as Ion, Bondbar, Strawberry Leopard, and Generic Value Products. Beauty Systems Group stores, branded as Cosmo Prof or Armstrong McCall stores, along with its outside sales consultants, sell up to 8,000 professionally branded products, including Paul Mitchell, Wella, Matrix, Schwarzkopf, Kenra, Goldwell, Joico, Amika and Moroccanoil.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Sally Beauty Q1 Earnings Preview
- Earnings Release Date: Sally Beauty is set to release its Q1 earnings before the market opens on February 9, with analysts forecasting earnings of 46 cents per share, an increase from 43 cents in the same period last year, indicating ongoing improvement in profitability.
- Revenue Expectations: The company anticipates quarterly revenue of $940.15 million, slightly above last year's $937.89 million, suggesting stable sales performance amid market competition, potentially reflecting sustained consumer demand for beauty products.
- Stock Price Movement: Despite optimistic earnings expectations, Sally Beauty's stock fell 2.8% to close at $16.16 last Friday, which may indicate market caution ahead of the earnings report, prompting investors to closely monitor subsequent performance.
- Analyst Ratings: Recent analyst ratings from Benzinga reveal a diverse outlook on Sally Beauty, and investors can access more information through the Analyst Ratings page to aid in decision-making and enhance investment confidence.
See More
Sally Beauty Reports Q1 2026 Earnings with Positive Guidance
- Earnings Highlights: Sally Beauty's Q1 2026 earnings report reveals a Non-GAAP EPS of $0.48, beating estimates by $0.02, with revenue of $943.17 million reflecting a 0.6% year-over-year increase, surpassing expectations by $3.02 million, indicating stable market performance.
- E-commerce Growth: Global e-commerce sales reached $111 million, accounting for 11.7% of net sales; while consolidated comparable sales remained flat, the growth in e-commerce supports future sales potential and reflects changing consumer shopping habits.
- Cash Flow Performance: The first quarter saw cash flow from operations of $93 million and free cash flow of $57 million, demonstrating strong cash flow performance that supports ongoing investments and shareholder returns, indicating a healthy financial position for the company.
- Fiscal Year 2026 Guidance: The company projects Q2 net sales between $895 million and $905 million, with adjusted EPS guidance of $0.39 to $0.42, reflecting confidence in future growth despite slight discrepancies with market consensus.
See More
Sally Beauty Reports Strong Q1 Results with 12% EPS Growth
- Strong Financial Performance: Sally Beauty achieved a 12% growth in adjusted EPS for Q1 of fiscal 2026, indicating the company's ability to meet market expectations while maintaining healthy gross margins, which enhances investor confidence.
- Robust Cash Flow: As of December 31, 2025, the company reported $93 million in cash flow from operations and $57 million in free cash flow, enabling it to repay $20 million in term loan debt and repurchase 1.4 million shares, thereby increasing shareholder value.
- Optimized Inventory Management: The company's inventory stood at $979 million, down 2.7% year-over-year, demonstrating effective inventory management that helps improve operational efficiency and reduce capital lock-up.
- Ongoing Strategic Investments: The company continues to advance its strategic initiatives aimed at accelerating growth and enhancing profitability, which not only lays the groundwork for future market expansion but also creates long-term value for shareholders.
See More
Sally Beauty Set to Announce FQ1 Earnings on February 9th
- Earnings Announcement: Sally Beauty (SBH) is set to announce its FQ1 earnings on February 9th before market open, with consensus EPS estimate at $0.46 and revenue at $940.15 million, which could positively impact stock performance if achieved.
- Performance Expectations: Over the past two years, SBH has exceeded EPS estimates 75% of the time and revenue estimates 50% of the time, indicating a strong track record of profitability and market confidence.
- Revision Trends: In the last three months, EPS estimates have seen no upward revisions but four downward adjustments, while revenue estimates also faced three downward revisions, suggesting a cautious market outlook on the company's future performance.
- Cost Savings Target: Sally Beauty aims for $120 million in cumulative cost savings by 2026 while launching the Sally Ignited store refresh initiative, designed to enhance customer experience and drive sales growth.
See More
"BJ's, Kroger, and 8 Additional Stocks Poised to Gain from Retail Sector Decline"
- Retail Stocks on Sale: Retail stocks are currently undervalued, presenting a potential opportunity for investors looking for bargains.
- Investment Opportunity: The decline in retail stock prices may attract bargain hunters seeking to capitalize on lower valuations.
See More
Sally Beauty Launches Innovative Hair Care Line
- Product Innovation: Sally Beauty introduces the ion® 24K collection to address the concerns of 40% of U.S. consumers regarding hair damage, utilizing TRICHOPOWER™ SCIENCE technology to reverse damage in just three minutes, significantly enhancing consumer experience.
- Effective Hair Care: The Rapid Recovery Peptide Leave-In Hair Treatment can reverse hair damage in three minutes while maintaining up to 87% of hair's natural foundation, helping consumers save over 60% compared to leading competitors, showcasing a clear price advantage.
- Multi-Functional Products: The Metal & Mineral Neutralizing Spray ensures even color absorption when used as a pre-treatment, while the pH Perfector Purifying Shampoo balances hair pH during cleansing, enhancing hair health and resilience, thus meeting consumer demand for high-performance hair care products.
- Market Expansion: Sally Beauty plans to unveil a new collection of ion® tools in spring 2026, further enriching its product line and promising smoother, shinier hair, reflecting the company's ongoing commitment to meeting modern consumer needs.
See More
Sally Beauty Q1 Earnings Preview
- Earnings Release Date: Sally Beauty is set to release its Q1 earnings before the market opens on February 9, with analysts forecasting earnings of 46 cents per share, an increase from 43 cents in the same period last year, indicating ongoing improvement in profitability.
- Revenue Expectations: The company anticipates quarterly revenue of $940.15 million, slightly above last year's $937.89 million, suggesting stable sales performance amid market competition, potentially reflecting sustained consumer demand for beauty products.
- Stock Price Movement: Despite optimistic earnings expectations, Sally Beauty's stock fell 2.8% to close at $16.16 last Friday, which may indicate market caution ahead of the earnings report, prompting investors to closely monitor subsequent performance.
- Analyst Ratings: Recent analyst ratings from Benzinga reveal a diverse outlook on Sally Beauty, and investors can access more information through the Analyst Ratings page to aid in decision-making and enhance investment confidence.
See More
Sally Beauty Reports Q1 2026 Earnings with Positive Guidance
- Earnings Highlights: Sally Beauty's Q1 2026 earnings report reveals a Non-GAAP EPS of $0.48, beating estimates by $0.02, with revenue of $943.17 million reflecting a 0.6% year-over-year increase, surpassing expectations by $3.02 million, indicating stable market performance.
- E-commerce Growth: Global e-commerce sales reached $111 million, accounting for 11.7% of net sales; while consolidated comparable sales remained flat, the growth in e-commerce supports future sales potential and reflects changing consumer shopping habits.
- Cash Flow Performance: The first quarter saw cash flow from operations of $93 million and free cash flow of $57 million, demonstrating strong cash flow performance that supports ongoing investments and shareholder returns, indicating a healthy financial position for the company.
- Fiscal Year 2026 Guidance: The company projects Q2 net sales between $895 million and $905 million, with adjusted EPS guidance of $0.39 to $0.42, reflecting confidence in future growth despite slight discrepancies with market consensus.
See More
Sally Beauty Reports Strong Q1 Results with 12% EPS Growth
- Strong Financial Performance: Sally Beauty achieved a 12% growth in adjusted EPS for Q1 of fiscal 2026, indicating the company's ability to meet market expectations while maintaining healthy gross margins, which enhances investor confidence.
- Robust Cash Flow: As of December 31, 2025, the company reported $93 million in cash flow from operations and $57 million in free cash flow, enabling it to repay $20 million in term loan debt and repurchase 1.4 million shares, thereby increasing shareholder value.
- Optimized Inventory Management: The company's inventory stood at $979 million, down 2.7% year-over-year, demonstrating effective inventory management that helps improve operational efficiency and reduce capital lock-up.
- Ongoing Strategic Investments: The company continues to advance its strategic initiatives aimed at accelerating growth and enhancing profitability, which not only lays the groundwork for future market expansion but also creates long-term value for shareholders.
See More
Sally Beauty Set to Announce FQ1 Earnings on February 9th
- Earnings Announcement: Sally Beauty (SBH) is set to announce its FQ1 earnings on February 9th before market open, with consensus EPS estimate at $0.46 and revenue at $940.15 million, which could positively impact stock performance if achieved.
- Performance Expectations: Over the past two years, SBH has exceeded EPS estimates 75% of the time and revenue estimates 50% of the time, indicating a strong track record of profitability and market confidence.
- Revision Trends: In the last three months, EPS estimates have seen no upward revisions but four downward adjustments, while revenue estimates also faced three downward revisions, suggesting a cautious market outlook on the company's future performance.
- Cost Savings Target: Sally Beauty aims for $120 million in cumulative cost savings by 2026 while launching the Sally Ignited store refresh initiative, designed to enhance customer experience and drive sales growth.
See More
"BJ's, Kroger, and 8 Additional Stocks Poised to Gain from Retail Sector Decline"
- Retail Stocks on Sale: Retail stocks are currently undervalued, presenting a potential opportunity for investors looking for bargains.
- Investment Opportunity: The decline in retail stock prices may attract bargain hunters seeking to capitalize on lower valuations.
See More
Sally Beauty Launches Innovative Hair Care Line
- Product Innovation: Sally Beauty introduces the ion® 24K collection to address the concerns of 40% of U.S. consumers regarding hair damage, utilizing TRICHOPOWER™ SCIENCE technology to reverse damage in just three minutes, significantly enhancing consumer experience.
- Effective Hair Care: The Rapid Recovery Peptide Leave-In Hair Treatment can reverse hair damage in three minutes while maintaining up to 87% of hair's natural foundation, helping consumers save over 60% compared to leading competitors, showcasing a clear price advantage.
- Multi-Functional Products: The Metal & Mineral Neutralizing Spray ensures even color absorption when used as a pre-treatment, while the pH Perfector Purifying Shampoo balances hair pH during cleansing, enhancing hair health and resilience, thus meeting consumer demand for high-performance hair care products.
- Market Expansion: Sally Beauty plans to unveil a new collection of ion® tools in spring 2026, further enriching its product line and promising smoother, shinier hair, reflecting the company's ongoing commitment to meeting modern consumer needs.
See More
