Sally Beauty Holdings, Inc. SBH hair care reset could support an improvement in category sales, although the recovery remains at an early stage. Hair care continued to weigh on category performance in the third quarter of fiscal 2026, with care sales declining 6% in the Global Sally Beauty segment and 5% at Beauty Systems Group (BSG). Growth in color helped offset some of this weakness. At BSG, comparable sales fell 2.1%, as strength in color and nails was more than offset by softer hair care performance. Management also noted that stylists remained selective about additional spending, particularly on hair care and styling tools.
The company is updating its product assortment with new brands such as Yellow and NatureLab.Tokyo, while also expanding offerings from Design Essentials, The Doux and Camille Rose. In the men’s category, Sally Beauty is increasing its focus on key brands including Clubman and Level 3. Management also sees its expansion into categories such as men’s and fragrance as an opportunity to broaden its total addressable market and capture additional market share over the long term.
Sally Beauty noted that hair care trends had begun to improve ahead of the category reset, which was being rolled out during the month. Management believes that refining the hair care assortment, together with the expansion of the men’s category, can help improve hair care sales performance over the coming quarters. The company is therefore looking to build on the recent improvement in category trends through new products, expanded assortments and greater focus on emerging growth areas.
Overall, Sally Beauty’s category reset could help improve hair care performance over time by refreshing its assortment and expanding into adjacent categories. However, the initiative is still in its early stages, and management has yet to provide quantitative results from the reset.
The Zacks Rundown for SBH
Shares of this Zacks Rank #3 (Hold) company have gained 1.4% in the past six months against the industry’s 21% decline.
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From a valuation standpoint, SBH trades at a forward price-to-earnings ratio of 7.32, lower than the industry’s average of 14.96.
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The Zacks Consensus Estimate for SBH’s current and next fiscal year earnings implies a year-over-year rise of approximately 9% each.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
Five Below, Inc. FIVE operates as a specialty value retailer in the United States. Five Below currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 15.1% and 36.7%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 70%, on average.
Fossil Group, Inc. FOSL designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2.
The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.
American Eagle Outfitters, Inc. AEO operates as a multi-brand specialty retailer in the United States and internationally. At present, AEO carries a Zacks Rank of 2.
The Zacks Consensus Estimate for AEO’s current fiscal-year sales and earnings indicates growth of 5.7% and 17.3%, respectively, from the year-ago figures. American Eagle delivered a trailing four-quarter earnings surprise of 48.5%, on average.
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