Sally Beauty has long been a staple in the beauty supply industry, serving both consumers and professionals through its network of over 4,000 stores. With a history of catering to the beauty needs of individuals and salon professionals alike, the company has successfully navigated various economic conditions while maintaining its market position.
A closer look at Sally Beauty’s financial health, supplier payment trends, and recent strategic moves highlights a company that’s on solid footing, with a few areas that could benefit from greater consistency.
A strong track record in supplier payments
A company’s ability to pay its suppliers on time is a strong indicator of two things –healthy cash flow and good financial discipline. When we looked at the company’s payment trends with suppliers, we could see that Sally Beauty has been a reliable payer in the past year.
The metric we use to determine this is Days Beyond Terms (DBT), which indicates how many days late a company pays its bills. In particular, the beauty brand’s DBT has consistently stayed in the low single digits— ranging from 2 to 6 – meaning at the most, it paid suppliers within one week of the agreed payment terms.
To put this into context, the industry average DBT was more than two times higher than Sally Beauty in the last 12 months.
The company has also shown high payment efficiency in 2024. For example, the company had very few of its outstanding bills fall into the past due category – with roughly 79% to 92% of its bills paid on time from March to December 2024.
This highlights a well-managed cash flow strategy, which is likely to have strengthened Sally Beauty’s supplier relationships while also keeping its supply chain running smoothly.
But while Sally Beauty’s overall payment practices are strong, there have been some fluctuations that are worth noting. In more recent months, there have been more late payments to suppliers, suggesting temporary strains on their cash flow and financial stability.
In January 2025, for example, 38.34% of its outstanding bills fell into the 1-30 days overdue category, while another 15.88% of its outstanding bills were 31-60 days past due. This is a significant shift from the company’s usual payment behaviors throughout 2024, when few payments to suppliers were overdue.
While some delays may be due to seasonal fluctuations or timing issues, it’s important for Sally Beauty to be consistent in how it pays suppliers, as that will have an impact on the company’s creditworthiness – something that could be a critical factor if the company requires financing, investment or extensions on its business loans.
Financial performance: stability with continued growth
Sally Beauty’s Q1 Fiscal 2025 earnings report highlights a company balancing growth with operational adjustments:
- Consolidated net sales reached $938 million, marking a 0.7% year-over-year increase.
- Comparable sales grew by 1.6%, reflecting the third consecutive quarter of positive growth.
- Operating margin expanded significantly by 330 basis points to 10.7%, driven by improved supply chain efficiencies and strategic cost management.
- E-commerce sales hit $99 million, now representing 10.6% of total revenue, signaling ongoing digital transformation efforts.
- Debt reduction remains a priority, with the company repaying $41 million in Term Loan B debt and completing $10 million in share repurchases.
Sally Beauty’s steady sales growth and improving profitability are positive signs of its resilience in a competitive retail environment. But macroeconomic factors, such as foreign currency headwinds, store closures and a declining number of distributor sales consultants, present ongoing challenges.
While these issues aren’t necessarily unique to Sally Beauty, they reiterate the importance of being adaptable in an evolving market.
Relocation and strategic expansion
Sally Beauty recently announced the relocation of its headquarters from Denton to Plano, Texas – a move that was made to strengthen its workforce and corporate operations. The new headquarters, located in Legacy West, will span 140,000 square feet and house approximately 600 employees initially, with room for growth.
According to an article from the Dallas Morning News, CEO Denise Paulonis said the move aims to bolster recruitment and retention efforts, fostering a “hub of culture and community that will drive enhanced collaboration and innovation.”
This relocation marks a strategic shift, reflecting the company’s focus on attracting top talent, modernizing its operations, and positioning itself for long-term success. The move may also enhance Sally Beauty’s ability to respond to evolving retail dynamics and consumer preferences.
The road ahead
Sally Beauty has demonstrated strong financial management, consistent growth, and a forward-thinking approach to digital transformation and corporate expansion. Its ability to maintain a low DBT, improve operating margins, and invest in infrastructure signals that the company is taking the right steps for long-term success.
That said, consistency in how it pays its suppliers is one area to keep an eye on. While the company shows strong payment discipline in certain months, it faces delays in others. Addressing these fluctuations will be important to make sure that late payments to suppliers don’t become more frequent and that any potential cash flow issues are mitigated early.
Beyond bill management, Sally Beauty should continue navigating broader market challenges, including currency fluctuations, store optimization, and distributor network stability. With a solid financial foundation, a history of smart strategic moves, and a focus on continued improvement, Sally Beauty is well-positioned to maintain its momentum and strengthen its market position in the years ahead.
CosmeticsDesign reached out to Sally Beauty for comment but has not received a response as of publication. This article will be updated if a response is provided.