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Sally Beauty's Color Sales Rise 8%: Is the Growth Sustainable?
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Key Takeaways
SBH's color category sales climbed 8%, with customer count up 3% year over year.
Customers acquired through SBH's LCOD spends 2x more in the first year.
SBH targets $45M in FY26 benefits from its Fuel for Growth program.
Sally Beauty Holdings, Inc. (SBH - Free Report) delivered a strong performance in its core color category, along with continued momentum from its licensed Colors on Demand (LCOD) platform. The color category saw year-over-year growth of 8% in the first quarter of 2026. This momentum was mirrored across Sally U.S. and Canada, where color sales increased by 8% as well.
In addition to sales growth, the company achieved a meaningful 3% rise in color customer count. This increase was driven by focused performance marketing and personalization initiatives. These results highlight the effectiveness of Sally Beauty’s strategic investments in customer engagement and digital capabilities.
Ongoing performance marketing, CRM and personalization efforts are fueling growth in millennial and Gen Z customer counts. The company believes these cohorts, which strongly engage with color trends, hair health and DIY, represent a significant long-term brand growth opportunity. The sustainability of this growth is bolstered by high-value customer engagement. Customers acquired through LCOD spend twice as much during their first year compared to those acquired through other channels.
Additionally, existing customers who engage with LCOD have shown a lift of more than 25% in annualized spend. Reflecting this impact, the company saw continued growth in new and reactivated customers, supported by an average of approximately 5,000 weekly consultations. The professional Beauty Systems Group also saw a 4% increase in color sales. Sally Beauty is expanding its product assortment with new professional brand launches like Milkshake and Keratin Complex to maintain this momentum.
The company remains confident in its ability to drive growth, also supported by the Fuel for Growth program, which is on track to deliver $45 million in benefits for fiscal 2026. Overall, with the strong customer acquisition economics, rising engagement through LCOD, expanding professional offerings, and support from the Fuel for Growth program, Sally Beauty’s color sales momentum appears to be sustainable.
The Zacks Rundown for SBH
Shares of this Zacks Rank #3 (Hold) company have gained 9.1% year to date compared with the industry’s rise of 7.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, SBH trades at a forward price-to-earnings ratio of 7.20, lower than the industry’s average of 19.62.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SBH’s current and next fiscal year earnings implies a year-over-year rise of 9% and 10.1%, respectively.
The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 22.1% and 25%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 62.1%, on average.
American Eagle Outfitters, Inc. (AEO - Free Report) operates as a specialty beauty retailer in the United States, Mexico and Kuwait. At present, AEO flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for AEO’s current fiscal-year sales implies growth of 2.6%, and the same for earnings indicates a decline of 20.7% from the year-ago figures. American Eagle delivered a trailing four-quarter earnings surprise of 35.1%, on average.
Deckers Outdoors Corporation (DECK - Free Report) , together with its subsidiaries, designs, markets and distributes footwear, apparel and accessories for casual lifestyle use and high-performance activities in the United States and internationally. At present, Deckers sports a Zacks Rank of 1.
The Zacks Consensus Estimate for DECK’s current fiscal-year sales and earnings indicates growth of 8.9% and 8.5%, respectively, from the year-ago figures. DECK delivered a trailing four-quarter earnings surprise of 36.9%, on average.
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Sally Beauty's Color Sales Rise 8%: Is the Growth Sustainable?
Key Takeaways
Sally Beauty Holdings, Inc. (SBH - Free Report) delivered a strong performance in its core color category, along with continued momentum from its licensed Colors on Demand (LCOD) platform. The color category saw year-over-year growth of 8% in the first quarter of 2026. This momentum was mirrored across Sally U.S. and Canada, where color sales increased by 8% as well.
In addition to sales growth, the company achieved a meaningful 3% rise in color customer count. This increase was driven by focused performance marketing and personalization initiatives. These results highlight the effectiveness of Sally Beauty’s strategic investments in customer engagement and digital capabilities.
Ongoing performance marketing, CRM and personalization efforts are fueling growth in millennial and Gen Z customer counts. The company believes these cohorts, which strongly engage with color trends, hair health and DIY, represent a significant long-term brand growth opportunity. The sustainability of this growth is bolstered by high-value customer engagement. Customers acquired through LCOD spend twice as much during their first year compared to those acquired through other channels.
Additionally, existing customers who engage with LCOD have shown a lift of more than 25% in annualized spend. Reflecting this impact, the company saw continued growth in new and reactivated customers, supported by an average of approximately 5,000 weekly consultations. The professional Beauty Systems Group also saw a 4% increase in color sales. Sally Beauty is expanding its product assortment with new professional brand launches like Milkshake and Keratin Complex to maintain this momentum.
The company remains confident in its ability to drive growth, also supported by the Fuel for Growth program, which is on track to deliver $45 million in benefits for fiscal 2026. Overall, with the strong customer acquisition economics, rising engagement through LCOD, expanding professional offerings, and support from the Fuel for Growth program, Sally Beauty’s color sales momentum appears to be sustainable.
The Zacks Rundown for SBH
Shares of this Zacks Rank #3 (Hold) company have gained 9.1% year to date compared with the industry’s rise of 7.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, SBH trades at a forward price-to-earnings ratio of 7.20, lower than the industry’s average of 19.62.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SBH’s current and next fiscal year earnings implies a year-over-year rise of 9% and 10.1%, respectively.
Image Source: Zacks Investment Research
Stocks to Consider
Some top-ranked stocks have been discussed below:
Five Below, Inc. (FIVE - Free Report) operates as a specialty value retailer in the United States. Five Below currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 22.1% and 25%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 62.1%, on average.
American Eagle Outfitters, Inc. (AEO - Free Report) operates as a specialty beauty retailer in the United States, Mexico and Kuwait. At present, AEO flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for AEO’s current fiscal-year sales implies growth of 2.6%, and the same for earnings indicates a decline of 20.7% from the year-ago figures. American Eagle delivered a trailing four-quarter earnings surprise of 35.1%, on average.
Deckers Outdoors Corporation (DECK - Free Report) , together with its subsidiaries, designs, markets and distributes footwear, apparel and accessories for casual lifestyle use and high-performance activities in the United States and internationally. At present, Deckers sports a Zacks Rank of 1.
The Zacks Consensus Estimate for DECK’s current fiscal-year sales and earnings indicates growth of 8.9% and 8.5%, respectively, from the year-ago figures. DECK delivered a trailing four-quarter earnings surprise of 36.9%, on average.