How a Strong Q3 Earnings Beat at Sally Beauty Holdings (SBH) Has Changed Its Investment Story

• Sally Beauty Holdings recently reported strong third-quarter 2025 earnings, surpassing analyst expectations on both earnings per share and revenue.
• The company's robust performance reflects the early success of its modernization initiatives and focus on digital adoption and exclusive brands.
• We’ll look at how this earnings beat and modernization focus could reshape Sally Beauty Holdings’ investment outlook.

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Sally Beauty Holdings Investment Narrative Recap

To be a shareholder in Sally Beauty Holdings, you need to believe the company’s modernization and digital focus can help it stay ahead despite strong competition and changing consumer habits. The recent third-quarter earnings beat is encouraging, but pressures from value-driven shopping and digital-first competitors remain immediate catalysts and risks. Given these conditions, the impact of the earnings surprise on near-term category weakness appears limited, so vigilance around underlying revenue trends is still warranted.

Among recent company announcements, the exclusive retail partnership with XMONDO Color stands out as particularly relevant. This move bolsters Sally Beauty’s higher-margin, proprietary assortment, an important catalyst for supporting gross margin expansion and brand relevance, especially as the broader sector shifts toward exclusive offerings and innovation in high-growth categories.

However, against this positive momentum, investors should also be aware that persistent softness in care and ancillary categories could […]

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

Sally Beauty Holdings is projected to deliver $3.8 billion in revenue and $211.5 million in earnings by 2028. This outlook is based on an anticipated annual revenue growth rate of 1.3% and an increase in earnings of $17.5 million from the current $194.0 million.

Uncover how Sally Beauty Holdings' forecasts yield a $14.45 fair value, a 12% downside to its current price.

Exploring Other Perspectives

Private investors in the Simply Wall St Community set fair value estimates for Sally Beauty Holdings from US$14.45 up to US$25.29 across three analyses. Many see the company’s growth potential in its exclusive brands, but the risk of category softness remains an open question for future performance.

Explore 3 other fair value estimates on Sally Beauty Holdings - why the stock might be worth 12% less than the current price!

Build Your Own Sally Beauty Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Sally Beauty Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Sally Beauty Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sally Beauty Holdings' overall financial health at a glance.

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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.

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