Sally Beauty Plans Move Away From B2B Distribution

Sally Beauty Holdings is taking steps to refresh its brand and modernize its customer experience.

“We want the Sally Beauty refresh to be a move to a more dynamic beauty powerhouse,” Sally Beauty President and CEO Denise Paulonis told analysts Thursday (Nov. 14) during the company’s fourth-quarter and full-year earnings call. “We want to leverage our rich heritage, brand equity, and loyal customer base with an updated brand expression that is modern, sophisticated, and scalable.”

With more than 4,000 stores worldwide, Sally Beauty is the largest distributor of professional beauty products in the U.S., according to its website. The firm caters to both consumers and salon professionals, and has 27,000 full- and part-time employees in 11 countries.

Paulonis said the brand refresh is set to roll out in the second half of fiscal 2025.

“We’re excited about the potential we have here,” she added. “We made the strategic decision to close a set of stores a few years ago and we returned to positive growth at the end of fiscal 2024.  We’ve done a lot of test and learn and feel we’re well armed with what will move the needle. We want to change the way consumers experience our stores with things like new store plans and fixtures. We want to move away from a supply house and more toward a beauty experience.”

This new concept will emphasize personalization, offering both high-quality and value-driven products to appeal to a wide range of consumers, from DIY beauty enthusiasts to professional stylists, Paulonis said. “We want to create a new shopping experience that inspire our customers to find joy in their beauty journeys,” she said.

By the Numbers

This focus on reimagining the customer experience is reflected in the company’s fourth-quarter performance. Fourth-quarter revenue increased 1.5%, to $935 million while consolidated comparable sales rose 2.0%. Global eCommerce sales reached $91 million, accounting for 9.8% of total sales.

For the full fiscal year, consolidated net sales totaled $3.72 billion, a slight decline of 0.3%, while comparable sales grew slightly by 0.3%. Full-year eCommerce sales hit $364 million, also representing 9.8% of net sales.

The company also announced its acquisition of Exclusive Beauty Supplies of Florida, a professional beauty distributor.

A key pillar of the company’s strategy is leveraging its 16 million loyalty members in the U.S. and Canada, who account for 78% of its sales, Paulonis said. Sally Beauty has expanded its marketplace presence through partnerships with DoorDash and Instacart, helping to attract new customers. Additionally, its online service, Licensed Colorist On Demand (LCOD), which offers at-home hair color consultations, saw a 20% increase in demand last quarter, highlighting a growing preference for personalized beauty services. The company is also enhancing its customer engagement through sophisticated CRM tools, improving communication across SMS, email and mobile platforms, Paulonis added.

“With LCOD we have nice traction there,” she said. “There’s a newness in nails also, a re-engagement of customers. We think that’s going to continue. We expanded our Marketplace program into DoorDash and Instacart and we’re seeing nice growth there. Our app is getting nice engagement as our SMS and CRM activity becomes more personalized. We’re working on the digital side with our own platforms to roll out with the brand refresh and an updated Sally persona, more modern and sophisticated. We feel great about the customer trends we’re seeing.”

Looking ahead to fiscal 2025, Paulonis is optimistic, saying the company is “well-equipped with the insights and strategies to continue driving growth. Q4 capped a successful year. We meaningfully advanced our strategic initiatives. We have great momentum and hope to continue on this track.”