Sally Beauty Q1 Revenue Beats Estimates with $943M, EPS $0.48
Morgan Stanley maintained an underweight rating on Sally Beauty, raising its price target from $14 to $16. In Q1 2026, revenue rose 0.6% to $943.2M, adjusted EPS was $0.48, adjusted EBITDA reached $111M (11.8% margin), and free cash flow totaled $57M.
1. Morgan Stanley Rating
Morgan Stanley maintained an underweight rating on Sally Beauty and raised its price target from $14 to $16, signaling cautious outlook despite the quarter’s modest growth.
2. Q1 2026 Financial Results
In the first quarter, Sally Beauty reported $943.2 million in revenue, up 0.6% year-over-year, with adjusted EPS of $0.48 and adjusted EBITDA of $111 million, equating to an 11.8% margin. Operating margin fell to 8.1% from 10.7% and comparable sales remained flat.
3. Strong Cash Flow and Debt Reduction
Sally Beauty generated $93 million in operating cash flow and $57 million in free cash flow, using part of the proceeds to repay $20 million of its term loan debt and bolster its balance sheet.