Sally Beauty Holdings Inc. is entering 2026 with bold ambitions, unveiling a slate of cost-saving initiatives and a comprehensive brand refresh as part of its “Sally Ignited” campaign. The specialty beauty retailer, renowned for empowering both professional stylists and DIY enthusiasts, is targeting a staggering $120 million in cumulative cost savings by the end of fiscal 2026 through its “Fuel for Growth” program, an increase from $74 million in 2025. This robust strategic shift, paired with store modernization and accelerated digital innovation, is designed to ensure resilience in a highly competitive environment.
Driving Efficiency With $120 Million Savings Target
At the heart of Sally Beauty’s transformation is its Fuel for Growth program, which aims to optimize the company’s cost structure by driving operational efficiencies across the board. This includes tightening the supply chain, deepening vendor partnerships, and streamlining the company’s SKU assortment. According to B Denise Paulonis, these measures are expected to yield an additional $45 million in run-rate savings during fiscal 2026, with about two-thirds flowing through gross margin improvements.
These efforts have already contributed to a 100-basis-point expansion in gross margin to 52.2% and a solid $275 million in operating cash flow for the latest fiscal year. Management continues to forecast consolidated net sales between $3.71 billion and $3.77 billion in fiscal 2026, expecting 1–1.6% growth.
Store and Brand Modernization
The Sally Ignited initiative, which represents a significant investment in the customer experience, goes beyond cost control by reinvigorating both the digital and physical retail environments. To date, 30 Sally Beauty stores have undergone extensive renovations, leading to longer customer dwell times, increased transaction values, and more robust cross-category shopping.
The refresh isn’t limited to store interiors: Sally Beauty is also:
- Expanding its own-brand offerings, including high-margin hair, skin, and tools categories.
- Investing in new digital experiences, app updates, and online shopping enhancements for both professional and retail customers.
- Introducing experiential merchandising, stylist education hubs, and deeper digital integration to further drive loyalty and omnichannel engagement.
E-Commerce and Digital Momentum
Sally Beauty U.S. and Canada posted 34% e-commerce sales growth in the last quarter, outpacing much of the specialty retail sector. The company is positioning itself to capitalize on evolving consumer habits through digital-first initiatives, omni-channel shopping upgrades, and enhancements to its stylist app.
Strategic Priorities and 2026 Outlook
Looking ahead, Sally Beauty’s strategic priorities for next year include:
- Customer activation and retention through digital and experiential investments.
- Margin protection via accelerated own-brand innovation and streamlined supply chain management.
Targeted capital expenditures of $100 million and projected free cash flow of $200 million to further fuel transformation and long-term value creation.
