CNC LEGAL ALERT: Lose Money on Your Centene Corporation Investment? Contact BFA Law by September 8 Class Action Deadline (NYSE:CNC)
If you invested in Centene, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases-investigations/centene-corporation-class-action-lawsuit.
Investors have until September 8, 2025, to ask the Court to be appointed to lead the case. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors who purchased Centene securities. The case is pending in the U.S. District Court for the Southern District of New York and is captioned: Lunstrum v. Centene Corporation, et al. , No. 25-cv-05659.
Why was Centene Sued for Securities Fraud?
Centene is a healthcare company that focuses on providing services to consumers enrolled in government-sponsored healthcare programs like Medicaid and Medicare, as well as those that purchase insurance under the Affordable Care Act from the Health Insurance Marketplace.
On December 12, 2024, Centene announced financial guidance for fiscal year 2025 which the company said reflected '[s]tability in earnings power in the face of unprecedented headwinds.' Next, on February 4, 2025, Centene increased its 2025 guidance due to enrollment 'overperformance.' Then, on April 25, 2025, Centene again increased 2025 guidance due to continued strong growth in enrollment and retention, while touting the 'progress we are making as an organization while navigating a dynamic policy landscape.' In truth, the majority of the market that Centene serves was experiencing lower than expected enrollment growth and increased morbidity rates, or frequency of disease and illness.
The Stock Declines as the Truth is Revealed
On July 1, 2025, Centene abruptly withdrew its previous guidance after reviewing an independent actuarial report from Wakely Consulting Group which showed that overall market growth in 22 of the 29 states Centene serves was lower than expected and that morbidity in those states was significantly higher than expected. On this news, the price of Centene stock fell $22.87 per share, or more than 40%, from $56.65 per share on July 1, 2025 to $33.78 per share on July 2, 2025.
Click here for more information: https://www.bfalaw.com/cases-investigations/centene-corporation-class-action-lawsuit.
What Can You Do?
If you invested in Centene you may have legal options and are encouraged to submit your information to the firm.
All representation is on a contingency fee basis, there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses.
Submit your information by visiting:
https://www.bfalaw.com/cases-investigations/centene-corporation-class-action-lawsuit
Or contact:Ross Shikowitz
[email protected]
212.789.3619
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These forward-looking statements may be identified by a reference to a future period or by the use of forward-looking terminology. Forward-looking statements are typically identified by words such as 'expect', 'believe', 'foresee', 'anticipate', 'intend', 'estimate', 'goal', 'strategy', 'plan' 'target' and 'project' or conditional verbs such as 'will', 'may', 'should', 'could' or 'would' or the negative of these terms, although not all forward-looking statements contain these words, and includes statements in this press release regarding our 2025 outlook and guidance, our expectation of releasing our deferred tax valuation allowance by year-end 2025, our ability to drive growth, and navigate interest volatility and economic uncertainties. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Readers should bear these factors in mind when considering such statements and should not place undue reliance on such statements. 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(Rithm); the extent to which MSR Asset Vehicle LLC (MAV) will exercise its rights to sell MSRs subserviced by PHH and the impact to our subservicing portfolio; our ability to close acquisitions of MSRs and other transactions, including the ability to obtain regulatory approvals; our ability to grow our reverse servicing business; our ability to retain clients and employees of acquired businesses, and the extent to which acquisitions and our other strategic initiatives will contribute to achieving our growth objectives; increased servicing costs based on increased borrower delinquency levels or other factors; uncertainty related to past, present or future claims, litigation, cease and desist orders and investigations regarding our servicing, foreclosure, modification, origination and other practices brought by government agencies and private parties, including state regulators, the Consumer Financial Protection Bureau (CFPB), State Attorneys General, the Securities and Exchange Commission (SEC), the Department of Justice or the Department of Housing and Urban Development (HUD); the reactions of key counterparties, including lenders, the GSEs and Ginnie Mae, to our regulatory engagements and litigation matters; increased regulatory scrutiny and media attention; any adverse developments in existing legal proceedings or the initiation of new legal proceedings; our ability to effectively manage our regulatory and contractual compliance obligations; our ability to comply with our servicing agreements, including our ability to comply with the requirements of the GSEs and Ginnie Mae and maintain our seller/servicer and other statuses with them; our ability to fund future draws on existing loans in our reverse mortgage portfolio; our servicer and credit ratings as well as other actions from various rating agencies, including any future downgrades; as well as other risks and uncertainties detailed in our reports and filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2024. 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Management believes, specifically, that the removal of fair value changes of our net MSR exposure due to changes in market interest rates and assumptions provides a useful, supplemental financial measure as it enables an assessment of our ability to generate earnings regardless of market conditions and the trends in our underlying businesses by removing the impact of fair value changes due to market interest rates and assumptions, which can vary significantly between periods. However, these measures should not be analyzed in isolation or as a substitute to analysis of our GAAP pre-tax income (loss) or GAAP pre-tax ROE nor a substitute for cash flows from operations. There are certain limitations to the analytical usefulness of the adjustments we make to GAAP pre-tax income (loss) and GAAP pre-tax ROE and, accordingly, we use these adjustments only for purposes of supplemental analysis. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Onity's reported results under accounting principles generally accepted in the United States. Other companies may use non-GAAP financial measures with the same or similar titles that are calculated differently to our non-GAAP financial measures. As a result, comparability may be limited. Readers are cautioned not to place undue reliance on analysis of the adjustments we make to GAAP pre-tax income (loss) and GAAP pre-tax ROE. The Company has not provided reconciliations of guidance for adjusted ROE, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures. These items include the change in fair value of our net MSR exposure due to changes in market interest rates and assumptions which can vary significantly between periods and are difficult to predict in advance in order to include in a GAAP estimate. Notables In the table below, we adjust GAAP pre-tax income for the following factors: MSR valuation adjustments, expense notables, and other income statement notables. MSR valuation adjustments are comprised of changes to Forward MSR and Reverse mortgage valuations due to rates and assumption changes. Expense notables include significant legal and regulatory settlement expenses, severance and retention costs, LTIP stock price changes, consolidation of office facilities and other expenses (such as costs associated with strategic transactions). Other income statement notables include non-routine transactions that are not categorized in the above. Beginning with the three months ended December 31, 2024, for purposes of calculating Income Statement Notables and Adjusted Pre-Tax Income, we changed the methodology used to calculate Other Income Statement Notables to include change in fair value due to interest rates for reverse loan buyouts (previously reported in gain/loss on loans held for sale, at fair value). We made this change to align with the change to our risk management approach to include changes in fair value of reverse loan buyouts due to interest rates in our MSR hedge strategy, consistent with other notables, such as Forward MSR Valuation Adjustments due to rates and assumption changes, net and Reverse Mortgage Fair Value Change due to rates and assumption changes. Other Income Statement Notables (a component of Other Notables) for the first three quarters of 2024 have been revised from prior presentations to reflect the methodology we adopted during the fourth quarter of 2024. 1H'25 Q2'25 Q1'25 Q2'24 I Net Income (Loss) Attributable to Common Stockholders 42 20 21 11 A. Preferred Stock Dividend (2) (1) (1) - II Reported Net Income (Loss) [I – A] 44 22 22 11 B. Income Tax Benefit (Expense) 12 (1) 13 (3) III Reported Pre-Tax Income (Loss) [II – B] 32 23 9 14 Forward MSR Valuation Adjustments due to rates and assumption changes, net (a)(b) (7) 6 (12) (13) Reverse Mortgage Fair Value Change due to rates and assumption changes (b)(c) 11 1 10 (4) IV Total MSR Valuation Adjustments due to rates and assumption changes, net 4 6 (2) (17) Significant legal and regulatory settlement expenses (12) 2 (14) 2 Severance and retention (d) (0) (0) (0) (1) LTIP stock price changes (e) (1) (2) 0 1 Office facilities consolidation (0) (0) (0) 0 Other expense notables (f) 1 1 1 (1) C. Total Expense Notables (12) 1 (14) 1 D. Gain (loss) on extinguishment of debt - - - 0 E. Other Income Statement Notables (g) (1) (1) (0) (3) V Total Other Notables [C + D + E] (14) 0 (14) (2) VI Total Notables (h) [IV + V] (10) 6 (16) (19) VII Adjusted Pre-Tax Income (i) [III – VI] 42 16 25 32 a) MSR valuation adjustments that are due to changes in market interest rates, valuation inputs or other assumptions, net of overall fair value gains / (losses) on MSR hedge, including FV changes of Pledged MSR liabilities associated with MSR transferred to MAV, Rithm and others and ESS financing liabilities that are due to changes in market interest rates, valuation inputs or other assumptions, a component of MSR valuation adjustments, net b) The changes in fair value due to market interest rates were measured by isolating the impact of market interest rate changes on the valuation model output as provided by our third-party valuation expert c) FV changes of loans HFI and HMBS related borrowings due to market interest rates and assumptions, a component of gain on reverse loans held for investment and HMBS-related borrowings, net d) Severance and retention due to organizational rightsizing or reorganization e) Long-term incentive program (LTIP) compensation expense changes attributable to stock price changes during the period f) Contains costs associated with but not limited to rebranding and other strategic initiatives and transactions g) Contains other non-routine transactions h) Certain previously presented notable categories with nil numbers for each period shown have been omitted i) Effective in Q4'24, change in fair value due to interest rates for reverse loan buyouts is now recognized as a notable (previously reported in gain/loss on loans held for sale, at fair value); presentation of past periods has been conformed to the current presentation; without this change, adjusted PTI would still have been $32M in Q2'24; see note titled 'Note Regarding Non-GAAP Financial Measures' for more informationAdjusted ROE Calculation1H'25 Q2'25 Q1'25 Q2'24 GAAP ROE (after tax) 18% 17% 19% 10% I Reported Net Income (Loss) 44 22 22 11 II Notable Items (10) 6 (16) (19) III Income Tax Benefit (Expense) 12 (1) 13 (3) IV Adjusted Pre-Tax Income (Loss) [I – II – III] 42 16 25 32 V Annualized Adjusted Pre-tax Income [IV * 4for qtr.] 84 66 102 128 Equity A Beginning Period Equity 443 460 443 432 C Ending Period Equity 482 482 460 446 D Equity Impact of Notables 10 (6) 16 19 B Adjusted Ending Period Equity [C + D] 492 475 477 465 VI Average Adjusted Equity [(A + B) / 2] 467 468 460 448 VII Adjusted ROE(a)[V / VI] 18% 14% 22% 29%a) Effective in Q4'24, change in fair value due to interest rates for reverse loan buyouts is now recognized as a notable (previously reported in gain/loss on loans held for sale, at fair value); presentation of past periods has been conformed to the current presentation; without this change, adjusted pre-tax income would still have been $32M in Q2'24; without this change, adjusted ROE would be 28% in Q2'24; see note titled 'Note Regarding Non-GAAP Financial Measures' for more informationCondensed Consolidated Balance Sheets (Unaudited) Assets June 30,2025 March 31,2025 June 30,2024 Cash and cash equivalents 194.3 178.0 203.1 Restricted cash 62.3 58.9 46.3 Mortgage servicing rights (MSRs), at fair value 2,632.6 2,547.4 2,327.7 Advances, net 461.4 514.0 550.6 Loans held for sale, at fair value 2,048.3 1,402.2 1,107.0 Loans held for investment, at fair value 10,470.8 10,812.5 8,227.8 Receivables, net 204.6 222.3 153.4 Investment in equity method investee - - 31.3 Premises and equipment, net 9.7 10.8 12.3 Other assets 129.1 106.0 84.3 Contingent loan repurchase asset 318.2 407.2 341.0 Total Assets 16,531.3 16,259.3 13,084.7 Liabilities, Mezzanine & Stockholders' Equity June 30,2025 March 31,2025 June 30,2024 Home Equity Conversion Mortgage-Backed Securities (HMBS) related borrowings, at fair value 10,253.1 10,587.6 8,035.4 Other financing liabilities, at fair value 818.1 835.5 845.9 Advance match funded liabilities 342.5 377.5 405.0 Mortgage loan financing facilities, net 2,195.5 1,577.4 1,190.5 MSR financing facilities, net 1,218.6 1,136.0 927.7 Senior notes, net 488.5 488.0 555.2 Other liabilities 365.0 340.0 337.9 Contingent loan repurchase liability 318.2 407.2 341.0 Total Liabilities 15,999.5 15,749.2 12,638.4 Mezzanine Equity 49.9 49.9 - Stockholders' Equity 481.9 460.2 446.2 Total Liabilities, Mezzanine and Stockholders' Equity 16,531.3 16,259.3 13,084.7 Condensed Consolidated Statements of Operations (Unaudited) For the Quarter EndingJune 30, 2025 March 31, 2025 June 30, 2024 Revenue Servicing and subservicing fees 211.3 203.3 210.8 Gain on reverse loans held for investment and HMBS-related borrowings, net 11.9 23.8 8.5 Gain on loans held for sale, net 10.4 11.8 16.5 Other revenue, net 13.0 10.9 10.6 Total revenue 246.6 249.8 246.4 MSR valuation adjustments, net (27.3) (38.9) (32.7) Operating expenses Compensation and benefits 60.9 57.4 55.0 Servicing and origination 13.0 13.0 13.9 Technology and communications 15.5 15.0 13.0 Professional services 8.4 22.6 10.7 Occupancy, equipment and mailing 8.1 8.2 7.5 Other expenses 3.7 3.6 3.9 Total operating expenses 109.5 119.9 104.0 Other income (expense) Interest income 32.1 26.2 22.5 Interest expense (75.6) (67.0) (73.1) Pledged MSR liability expense (43.0) (41.9) (46.1) Gain (loss) on extinguishment of debt - - - Earnings of equity method investee - - 3.1 Other, net (0.4) 0.9 (2.7) Other income (expense), net (87.0) (81.9) (96.2) Income before income taxes 22.8 9.1 13.5 Income tax expense 1.3 (13.0) 3.0 Net Income (Loss) 21.5 22.1 10.5 Preferred stock dividend (1.0) (1.0) - Net Income (Loss) attributable to common stockholders 20.5 21.1 10.5 Basic EPS $2.55 $2.68 $1.34 Diluted EPS $2.40 $2.50 $1.33 For Further Information Contact: Investors: Valerie Haertel, VP, Investor Relations(561) 570-2969shareholderrelations@ Media: Dico Akseraylian, SVP, Corporate Communications(856) 917-0066mediarelations@ in to access your portfolio
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The Company was operating 35 fewer stores at the end of the quarter compared to the prior year and foreign currency translation had no impact on consolidated net sales for the quarter. Global e-commerce sales were $99 million, or 10.6% of consolidated net sales, for the quarter. Consolidated comparable sales decreased 0.4%, primarily reflecting macro uncertainty, which impacted consumer spending at Sally Beauty, partially offset by strong growth in hair color and digital marketplaces at Sally Beauty as well as continued momentum at Beauty Systems Group from expanded distribution and new brand innovation. Consolidated gross profit for the third quarter was essentially flat at $481.0 million compared to $480.9 million in the prior year. Consolidated GAAP gross margin was 51.5%, an increase of 50 basis points compared to 51.0% in the prior year. Consolidated Adjusted Gross Margin, excluding the inventory write-off from the Company's European operations in connection with the fuel for growth initiative, was 52.0%, an increase of 100 basis points compared 51.0% in the prior year. The increase was driven primarily by the Sally Beauty segment, which delivered higher product margin resulting from benefits from the Company's fuel for growth initiative, lower distribution and freight costs, and lower shrink expense. GAAP selling, general and administrative (SG&A) expenses totaled $402.8 million, a decrease of $5.9 million compared to the prior year. As a percentage of sales, SG&A expenses were 43.2% compared to 43.4% in the prior year. Adjusted Selling, General and Administrative Expenses, excluding the Company's costs related to the fuel for growth initiative, expenses related to the sale of the Company's corporate headquarters, and other non-recurring expenses, totaled $398.9 million, an increase of $2.1 million compared to the prior year. The increase was driven primarily by higher labor and other compensation-related expenses, and higher information technology costs, partially offset by $6.4 million in savings from the Company's fuel for growth initiative and lower depreciation expense. As a percentage of sales, Adjusted SG&A expenses were 42.7% compared to 42.1% in the prior year. GAAP operating earnings and operating margin in the third quarter were $78.2 million and 8.4%, respectively, compared to $71.8 million and 7.6%, in the prior year. Adjusted Operating Earnings and Operating Margin, excluding the Company's costs related to the fuel for growth initiative, expenses related to the sale of the Company's corporate headquarters, costs related to restructuring efforts, and other non-recurring expenses, were $86.1 million and 9.2%, respectively, compared to $84.1 million and 8.9%, in the prior year. GAAP net earnings in the third quarter were $45.7 million, or $0.44 per diluted share, compared to GAAP net earnings of $37.7 million, or $0.36 per diluted share, in the prior year. Adjusted Net Earnings, excluding the Company's costs related to the fuel for growth initiative, expenses related to the sale of the Company's corporate headquarters, costs related to restructuring efforts, the loss on debt extinguishment, and other non-recurring expenses, were $52.4 million, or $0.51 per diluted share, compared to Adjusted Net Earnings of $48.1 million, or $0.45 per diluted share, in the prior year. Adjusted EBITDA in the third quarter was $115.3 million, a decrease of 1.3% compared to the prior year, and Adjusted EBITDA Margin was 12.4%, flat to the prior year. Balance Sheet and Cash Flow As of June 30, 2025, the Company had cash and cash equivalents of $113 million and no outstanding borrowings under its asset-based revolving line of credit. At the end of the quarter, inventory was $1.01 billion, down 1.7% versus a year ago. Third quarter cash flow from operations was $69.4 million and Operating Free Cash Flow totaled $49.1 million. During the quarter, the Company utilized its cash flow to repay $21 million of term loan B debt and repurchase 1.5 million shares under its share repurchase program at an aggregate cost of $13 million. The Company ended the quarter with a net debt leverage ratio of 1.7x. Fiscal 2025 Third Quarter Segment Results Sally Beauty Supply Segment net sales were $526.8 million in the quarter, a decrease of 1.8% compared to the prior year with a 1.1% decrease in segment comparable sales. The segment operated 32 fewer stores at the end of the quarter compared to the prior year and had a favorable impact of 10 basis points from foreign currency translation on reported sales. Segment e-commerce sales were $43 million, or 8.2% of segment net sales, for the quarter. GAAP gross margin increased by 110 basis points to 60.9% compared to the prior year. GAAP operating earnings were $83.3 million compared to $86.9 million in the prior year, representing a decrease of 4.2%. GAAP operating margin decreased to 15.8% compared to 16.2% in the prior year. Beauty Systems Group Segment net sales were $406.5 million in the quarter, an increase of 0.2% compared to the prior year with a 0.5% increase in segment comparable sales. The segment had an unfavorable impact of 10 basis points on reported sales from foreign currency translation and operated 3 fewer stores at the end of the quarter compared to the prior year. Segment e-commerce sales were $56 million, or 13.7% of segment net sales, for the quarter. GAAP gross margin was flat to the prior year at 39.4%. GAAP operating earnings were $50.7 million compared to $46.8 million in the prior year, representing an increase of 8.4%. GAAP operating margin in the quarter was 12.5% compared to 11.5% in the prior year. Fiscal Year 2025 Guidance* The Company is updating its full year comparable sales outlook to the high end of the prior range and raising its full year Adjusted Operating Margin guidance to reflect current business trends. Full Year Comparable sales are expected to be approximately flat (previously flat to down 1%) Consolidated net sales are expected to be approximately 75 basis points lower than comparable sales due to the expected unfavorable impact from foreign exchange rates on full year net sales and operating approximately 30 fewer stores compared to the prior year Adjusted Operating Margin is expected to be in the range of 8.6% to 8.7% (previously 8.0% to 8.5%) * The Company does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of its reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of the Company's control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. Conference Call and Where You Can Find Additional Information The Company will hold a conference call and live webcast at approximately 7:30 a.m. Central Time today, August 5, 2025, to discuss its financial results and its business. During the conference call, the Company may discuss and answer one or more questions concerning business and financial matters and trends affecting the Company. The Company's responses to these questions, as well as other matters discussed during the conference call, may contain or constitute material information that has not been previously disclosed. Participants can listen to the live webcast of the conference call by accessing the investor relations section of the Company's website at or through our third-party host at SBH Q3 Earnings Webcast. To join the conference call, participants can pre-register to receive a dial-in number and unique PIN using the following link: Pre-register SBH Q3 Earnings Call. Pre-registration can be completed at any time up to and following the call start time. A replay will be available on the Company's investor relations website after 10:00 a.m. Central Time on August 5, 2025, through August 5, 2026. About Sally Beauty Holdings, Inc. Sally Beauty Holdings, Inc. (NYSE: SBH), as the leader in professional hair color, sells and distributes professional beauty supplies globally through its Sally Beauty Supply and Beauty Systems Group segments. Sally Beauty Supply stores offer up to 7,000 products for hair color, hair care, nails, and skin care through proprietary brands such as Ion®, Bondbar®, Strawberry Leopard®, Generic Value Products®, Inspired by Nature® and Silk Elements® as well as professional lines such as Wella®, Clairol®, OPI®, L'Oreal®, Wahl® and Babyliss Pro®. Beauty Systems Group stores, branded as Cosmo Prof® or Armstrong McCall® stores, along with its outside sales consultants, sell up to 8,000 professionally branded products including Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico®, Amika® and Moroccanoil®, intended for use in salons and for resale by salons to retail consumers. For more information about Sally Beauty Holdings, Inc., please visit Cautionary Notice Regarding Forward-Looking Statements Statements in this news release and the schedules hereto that are not purely historical facts or that depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of words such as "believes," "projects," "expects," "can," "may," "estimates," "should," "plans," "targets," "intends," "could," "will," "would," "anticipates," "potential," "confident," "optimistic," or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters. Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including the "Risk Factors" described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, and other filings with the U.S. Securities and Exchange Commission. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements. Use of Non-GAAP Financial Measures This news release and the schedules hereto include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States, ("GAAP"), and are therefore referred to as non-GAAP financial measures: (1) Adjusted Gross Margin; (2) Adjusted Selling, General and Administrative Expenses; (3) Adjusted EBITDA and EBITDA Margin; (4) Adjusted Operating Earnings and Operating Margin; (5) Adjusted Net Earnings; (6) Adjusted Diluted Net Earnings Per Share; and (7) Operating Free Cash Flow. We have provided definitions below for these non-GAAP financial measures and have provided tables in the schedules hereto to reconcile these non-GAAP financial measures to the comparable GAAP financial measures. Adjusted Gross Margin – We define the measure Adjusted Gross Margin as GAAP gross margin excluding the inventory write-off from the Company's European operations in connection with the fuel for growth initiative for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Selling, General and Administrative Expenses – We define the measure Adjusted Selling, General and Administrative Expenses as GAAP selling, general and administrative expenses excluding the costs related to the Company's fuel for growth initiative, expenses related to the sale of the Company's corporate headquarters, and other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted EBITDA and EBITDA Margin – We define the measure Adjusted EBITDA as GAAP net earnings before depreciation and amortization, interest expense, income taxes, share-based compensation, costs related to the Company's fuel for growth initiative, expenses related to the sale of the Company's corporate headquarters and other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of net sales. Adjusted Operating Earnings and Operating Margin – Adjusted operating earnings are GAAP operating earnings that exclude the costs related to the Company's fuel for growth initiative, expenses related to the sale of the Company's corporate headquarters, costs related to restructuring efforts, and other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Operating Margin is Adjusted Operating Earnings as a percentage of net sales. Adjusted Net Earnings – Adjusted net earnings is GAAP net earnings that exclude the tax-effected the costs related to the Company's fuel for growth initiative, tax-effected expenses related to the sale of the Company's corporate headquarters, tax-effected costs from the loss on debt extinguishment, tax-effected costs related to restructuring efforts, and tax-effected other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Diluted Net Earnings Per Share – Adjusted diluted net earnings per share is GAAP diluted earnings per share that exclude the tax-effected costs related to the Company's fuel for growth initiative, tax-effected expenses related to the sale of the Company's corporate headquarters, tax-effected costs from the loss on debt extinguishment, tax-effected costs related to restructuring efforts, and tax-effected other non-recurring expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Operating Free Cash Flow – We define the measure Operating Free Cash Flow as GAAP net cash provided by operating activities less payments for capital expenditures (net). We believe Operating Free Cash Flow is an important liquidity measure that provides useful information to investors about the amount of cash generated from operations after taking into account payments for capital expenditures (net). We believe that these non-GAAP financial measures provide valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry. We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and Board of Directors also use these non-GAAP measures as supplemental measures to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe that these non-GAAP measures also provide meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. These non-GAAP measures should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies. Supplemental Schedules Segment Information 1 Non-GAAP Financial Measures Reconciliations 2-3 Non-GAAP Financial Measures Reconciliations; Adjusted EBITDA and Operating Free Cash Flow 4 Store Count and Comparable Sales 5 SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 Percentage Change 2025 2024 Percentage Change Net sales $ 933,307 $ 942,340 (1.0 )% $ 2,754,348 $ 2,782,003 (1.0 )% Cost of products sold 452,322 461,457 (2.0 )% 1,337,706 1,370,872 (2.4 )% Gross profit 480,985 480,883 0.0 % 1,416,642 1,411,131 0.4 % Selling, general and administrative expenses 402,812 408,730 (1.4 )% 1,168,776 1,210,303 (3.4 )% Restructuring — 383 (100.0 )% — 361 (100.0 )% Operating earnings 78,173 71,770 8.9 % 247,866 200,467 23.6 % Interest expense 15,709 20,707 (24.1 )% 49,440 58,544 (15.6 )% Earnings before provision for income taxes 62,464 51,063 22.3 % 198,426 141,923 39.8 % Provision for income taxes 16,740 13,339 25.5 % 52,479 36,565 43.5 % Net earnings $ 45,724 $ 37,724 21.2 % $ 145,947 $ 105,358 38.5 % Earnings per share: Basic $ 0.46 $ 0.37 24.3 % $ 1.44 $ 1.01 42.6 % Diluted $ 0.44 $ 0.36 22.2 % $ 1.40 $ 0.98 42.9 % Weighted average shares: Basic 100,463 103,190 101,367 104,477 Diluted 103,239 105,897 104,187 107,186 Basis Point Change Basis Point Change Comparison as a percentage of net sales Consolidated gross margin 51.5 % 51.0 % 50 51.4 % 50.7 % 70 Selling, general and administrative expenses 43.2 % 43.4 % (20 ) 42.4 % 43.5 % (110 ) Consolidated operating margin 8.4 % 7.6 % 80 9.0 % 7.2 % 180 Effective tax rate 26.8 % 26.1 % 70 26.4 % 25.8 % 60 SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands) (Unaudited) June 30 September 30, 2025 2024 Cash and cash equivalents $ 112,800 $ 107,961 Trade and other accounts receivable 95,957 92,188 Inventory 1,005,365 1,036,624 Other current assets 47,522 68,541 Total current assets 1,261,644 1,305,314 Property and equipment, net 256,472 269,872 Operating lease assets 589,960 582,573 Goodwill and other intangible assets 597,165 598,226 Other assets 38,859 36,914 Total assets $ 2,744,100 $ 2,792,899 Current maturities of long-term debt $ 4,000 $ 4,127 Accounts payable 193,040 269,424 Accrued liabilities 165,291 162,950 Current operating lease liabilities 155,591 136,068 Income taxes payable 5,920 20,100 Total current liabilities 523,842 592,669 Long-term debt, including capital leases 882,383 978,255 Long-term operating lease liabilities 468,998 479,616 Other liabilities 20,874 22,066 Deferred income tax liabilities, net 85,094 91,758 Total liabilities 1,981,191 2,164,364 Total stockholders' equity 762,909 628,535 Total liabilities and stockholders' equity $ 2,744,100 $ 2,792,899 Supplemental Schedule 1 SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Segment Information (In thousands) (Unaudited) Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 Percentage Change 2025 2024 Percentage Change Net sales: Sally Beauty Supply ("SBS") $ 526,782 $ 536,536 (1.8 )% $ 1,552,803 $ 1,573,015 (1.3 )% Beauty Systems Group ("BSG") 406,525 405,804 0.2 % 1,201,545 1,208,988 (0.6 )% Total net sales $ 933,307 $ 942,340 (1.0 )% $ 2,754,348 $ 2,782,003 (1.0 )% Operating earnings: SBS $ 83,305 $ 86,938 (4.2 )% $ 240,484 $ 241,387 (0.4 )% BSG 50,672 46,753 8.4 % 145,075 134,395 7.9 % Segment operating earnings 133,977 133,691 0.2 % 385,559 375,782 2.6 % Unallocated expenses (1) 55,804 61,538 (9.3 )% 137,693 174,954 (21.3 )% Restructuring — 383 (100.0 )% — 361 (100.0 )% Interest expense 15,709 20,707 (24.1 )% 49,440 58,544 (15.6 )% Earnings before provision for income taxes $ 62,464 $ 51,063 22.3 % $ 198,426 $ 141,923 39.8 % Segment gross margin: 2025 2024 Basis Point Change 2025 2024 Basis Point Change SBS 60.9 % 59.8 % 110 60.6 % 59.5 % 110 BSG 39.4 % 39.4 % — 39.6 % 39.4 % 20 Segment operating margin: SBS 15.8 % 16.2 % (40 ) 15.5 % 15.3 % 20 BSG 12.5 % 11.5 % 100 12.1 % 11.1 % 100 Consolidated operating margin 8.4 % 7.6 % 80 9.0 % 7.2 % 180 (1) Unallocated expenses, including share-based compensation expense, consist of corporate and shared costs and are included in selling, general and administrative expenses. Additionally, unallocated expenses include costs associated with our Fuel for Growth initiative and a gain from the sale of our corporate headquarters. Supplemental Schedule 2 SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Non-GAAP Financial Measures Reconciliations (In thousands, except per share data) (Unaudited) Three Months Ended June 30, 2025 As Reported(GAAP) Fuel for Growth and Other (1) Corporate HQRelocation (2) As Adjusted (Non-GAAP) Cost of products sold $ 452,322 $ (4,068 ) $ — $ 448,254 Consolidated gross margin 51.5 % 52.0 % Selling, general and administrative expenses 402,812 (3,737 ) (137 ) 398,938 SG&A expenses, as a percentage of sales 43.2 % 42.7 % Operating earnings 78,173 7,805 137 86,115 Operating margin 8.4 % 9.2 % Interest expense 15,709 — — 15,709 Earnings before provision for income taxes 62,464 7,805 137 70,406 Provision for income taxes (5) 16,740 1,263 10 18,013 Net earnings $ 45,724 $ 6,542 $ 127 $ 52,393 Earnings per share: (6) Basic $ 0.46 $ 0.07 $ 0.00 $ 0.52 Diluted $ 0.44 $ 0.06 $ 0.00 $ 0.51 Three Months Ended June 30, 2024 As Reported(GAAP) Fuel for Growth and Other (1) Restructuring (3) Loss on Debt Extinguishment (4) As Adjusted (Non-GAAP) Cost of products sold $ 461,457 $ — $ — $ — $ 461,457 Consolidated gross margin 51.0 % 51.0 % Selling, general and administrative expenses 408,730 (11,933 ) — — 396,797 SG&A expenses, as a percentage of sales 43.4 % 42.1 % Restructuring 383 — (383 ) — — Operating earnings 71,770 11,933 383 — 84,086 Operating margin 7.6 % 8.9 % Interest expense 20,707 — — (1,697 ) 19,010 Earnings before provision for income taxes 51,063 11,933 383 1,697 65,076 Provision for income taxes (5) 13,339 3,066 99 436 16,940 Net earnings $ 37,724 $ 8,867 $ 284 $ 1,261 $ 48,136 Earnings per share: (6) Basic $ 0.37 $ 0.09 $ 0.00 $ 0.01 $ 0.47 Diluted $ 0.36 $ 0.08 $ 0.00 $ 0.01 $ 0.45 (1) Fuel for Growth and other represents expenses primarily related expenses associated with our Fuel for Growth program and other non-recurring items, including the divesture of operations in Spain. (2) Primarily represents expenses in connection with the relocation of our headquarters. (3) Restructuring represents expenses and adjustments incurred primarily in connection with our Distribution Center Consolidation and Store Optimization Plan. (4) Loss on debt extinguishment relates to the write-off of unamortized deferred financing costs related to the repricing of our Term Loan B due 2030. (5) The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized. (6) The sum of the earnings per share may not equal the full amount due to rounding of the calculated amounts. Supplemental Schedule 3 SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Non-GAAP Financial Measures Reconciliations, Continued (In thousands, except per share data) (Unaudited) Nine Months Ended June 30, 2025 As Reported(GAAP) Fuel for Growth and Other (1) Corporate HQRelocation (2) AssetImpairment (3) As Adjusted (Non-GAAP) Cost of products sold $ 1,337,706 $ (4,068 ) $ — $ — $ 1,333,638 Consolidated gross margin 51.4 % 51.6 % Selling, general and administrative expenses 1,168,776 (12,412 ) 26,296 (1,779 ) 1,180,881 SG&A expenses, as a percentage of sales 42.4 % 42.9 % Operating earnings 247,866 16,480 (26,296 ) 1,779 239,829 Operating margin 9.0 % 8.7 % Interest expense 49,440 — — — 49,440 Earnings before provision for income taxes 198,426 16,480 (26,296 ) 1,779 190,389 Provision for income taxes (6) 52,479 3,485 (6,788 ) 444 49,620 Net earnings $ 145,947 $ 12,995 $ (19,508 ) $ 1,335 $ 140,769 Earnings per share: (7) Basic $ 1.44 $ 0.13 $ (0.19 ) $ 0.01 $ 1.39 Diluted $ 1.40 $ 0.12 $ (0.19 ) $ 0.01 $ 1.35 Nine Months Ended June 30, 2024 As Reported(GAAP) Fuel for Growth and Other (1) Restructuring (4) Loss on Debt Extinguishment (5) As Adjusted (Non-GAAP) Cost of products sold $ 1,370,872 $ — $ — $ — $ 1,370,872 Consolidated gross margin 50.7 % 50.7 % Selling, general and administrative expenses 1,210,303 (25,760 ) — — 1,184,543 SG&A expenses, as a percentage of sales 43.5 % 42.6 % Restructuring 361 — (361 ) — — Operating earnings 200,467 25,760 361 — 226,588 Operating margin 7.2 % 8.1 % Interest expense 58,544 — — (4,261 ) 54,283 Earnings before provision for income taxes 141,923 25,760 361 4,261 172,305 Provision for income taxes (6) 36,565 6,618 93 1,095 44,371 Net earnings $ 105,358 $ 19,142 $ 268 $ 3,166 $ 127,934 Earnings per share: (7) Basic $ 1.01 $ 0.18 $ 0.00 $ 0.03 $ 1.22 Diluted $ 0.98 $ 0.18 $ 0.00 $ 0.03 $ 1.19 (1) Fuel for Growth and other represents expenses primarily related expenses associated with our Fuel for Growth program and other non-recurring items, including our divestiture of operations in Spain. (2) Primarily represents a $26.6 million gain from the sale of our headquarters in Denton, TX and expenses in connection with the relocation of our headquarters. (3) Impairment related to the write-off of certain tradenames used in Europe. (4) Restructuring represents expenses and adjustments incurred primarily in connection with our Distribution Center Consolidation and Store Optimization Plan. (5) Loss on debt extinguishment relates to the repayment of our 5.625% Senior Notes due 2025, which included a the write-off of unamortized deferred financing costs of $2.0 million, and overlapping interest, net of interest earned on short-term cash equivalents, in the amount of $0.5 million on such senior notes after February 27, 2024 and until their redemption. These pro-forma adjustments assume the redeemed senior notes were repaid on February 27, 2024 at the time of closing on our 6.75% Senior Notes due 2032. In connection with the repricing of our Term Loan B, we recognized a write-off of unamortized deferred financing costs of $1.7 million. (6) The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized. (7) The sum of the earnings per share may not equal the full amount due to rounding of the calculated amounts. Supplemental Schedule 4 SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Non-GAAP Financial Measures Reconciliations, Continued (In thousands) (Unaudited) Three Months Ended June 30, Nine Months Ended June 30, Adjusted EBITDA: 2025 2024 Percentage Change 2025 2024 Percentage Change Net earnings $ 45,724 $ 37,724 21.2 % $ 145,947 $ 105,358 38.5 % Add: Depreciation and amortization 24,669 28,516 (13.5 )% 75,593 83,533 (9.5 )% Interest expense 15,709 20,707 (24.1 )% 49,440 58,544 (15.6 )% Provision for income taxes 16,740 13,339 25.5 % 52,479 36,565 43.5 % EBITDA (non-GAAP) 102,842 100,286 2.5 % 323,459 284,000 13.9 % Share-based compensation 4,509 4,178 7.9 % 14,800 13,260 11.6 % Fuel for Growth and Other 7,805 11,933 (34.6 )% 16,480 25,760 (36.0 )% Corporate HQ Relocation 137 — 100.0 % (26,296 ) — 100.0 % Asset Impairment — — — 1,779 — 100.0 % Restructuring — 383 (100.0 )% — 361 (100.0 )% Adjusted EBITDA (non-GAAP) $ 115,293 $ 116,780 (1.3 )% $ 330,222 $ 323,381 2.1 % Basis Point Change Basis Point Change Adjusted EBITDA as a percentage of net sales Adjusted EBITDA margin 12.4 % 12.4 % 0 12.0 % 11.6 % 40 Operating Free Cash Flow: 2025 2024 Percentage Change 2025 2024 Percentage Change Net cash provided by operating activities $ 69,432 $ 47,895 45.0 % $ 153,953 $ 135,855 13.3 % Less: Payments for property and equipment, net (1) 20,300 19,149 6.0 % 15,697 63,808 (75.4 )% Operating free cash flow (non-GAAP) $ 49,132 $ 28,746 70.9 % $ 138,256 $ 72,047 91.9 % (1) For the nine months ended June 30, 2025, payments for property and equipment, net include $43.6 million in proceeds from the sale of our corporate headquarters. Supplemental Schedule 5 SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Store Count and Comparable Sales (Unaudited) As of June 30, 2025 2024 Change Number of stores: SBS stores 3,096 3,128 (32 ) BSG: Company-operated stores 1,198 1,200 (2 ) Franchise stores 131 132 (1 ) Total BSG 1,329 1,332 (3 ) Total consolidated 4,425 4,460 (35 ) Number of BSG distributor sales consultants (1) 611 659 (48 ) (1) BSG distributor sales consultants (DSC) include 191 sales consultants employed by our franchisees at June 30, 2025 and 2024. Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 Basis Point Change 2025 2024 Basis Point Change Comparable sales growth (decline): SBS (1.1 )% 0.7 % (180 ) 0.1 % (1.7 )% 180 BSG 0.5 % 2.6 % (210 ) (0.2 )% 1.8 % (200 ) Consolidated (0.4 )% 1.5 % (190 ) 0.0 % (0.2 )% 20 Our comparable sales include sales from stores that have been operating for 14 months or longer as of the last day of a month and e-commerce revenue. Additionally, our comparable sales include sales to franchisees and full-service sales. Our comparable sales amounts exclude the effect of changes in foreign exchange rates and sales from stores relocated until 14 months after the relocation. Revenue from acquired stores is excluded from our comparable sales calculation until 14 months after the acquisition. View source version on Contacts Jeff HarkinsInvestor Relations940-297-3877jharkins@
