Will Sally Beauty's E-Commerce Growth Keep Momentum Alive?

Sally Beauty Holdings, Inc. SBH continued to unlock digital value in the third quarter of fiscal 2026, with global e-commerce sales increasing 11% year over year. The company marked its fourth consecutive quarter of double-digit global e-commerce growth, supported by continued strength in Sally’s marketplaces and the rollout of updated apps across both business segments.

Sally e-commerce continued to deliver double-digit growth, with sales increasing 20% to $52 million in the quarter. E-commerce accounted for 10% of segment net sales. Meanwhile, BSG e-commerce sales grew 4% to $58 million, representing 15% of segment net sales. Together, the two segments continued to deliver growth in e-commerce sales.

The Sally app continued to see strong engagement and higher conversion during the third quarter. Order and sales growth outpaced sessions during the period. Average order value increased 6% in the third quarter, adding to the app’s digital performance. Buy online, pick up in store represented the majority of app order volume during the quarter and was the company’s most efficient delivery channel.

BSG also saw order and sales growth outpace sessions during the quarter. Features including faster checkout, simplified reordering, inventory near me and Apple Pay helped improve the customer experience. Similar to the Sally app, a significant portion of BSG orders are being fulfilled through buy online, pick up in store. Overall, Sally Beauty’s digital initiatives are showing encouraging traction, with stronger engagement and conversion on the Sally app, continued e-commerce growth across both segments, and widespread use of buy online, pick up in store.

The Zacks Rundown for SBH

Shares of this Zacks Rank #3 (Hold) company have gained 3.2% in the past year against the industry’s 17.1% decline.

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From a valuation standpoint, SBH trades at a forward price-to-earnings ratio of 7.25, lower than the industry’s average of 15.73.

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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 36.1%, 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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This article originally published on Zacks Investment Research (zacks.com).

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