Sally Beauty Holdings reported a resilient QQ2 2025 performance despite a softer top-line environment, underscored by ongoing margin expansion and strong cash generation. Total net sales declined 2.8% year over year to $883.1 million, reflecting FX headwinds and softer consumer demand, but the company delivered a solid gross margin improvement (52.0%, up ~100 bps y-o-y) and an adjusted operating margin of 8.5% (up ~90 bps y-o-y). Management attributed the quarterly strength to core growth levers: color categories, digital marketplaces, and ongoing brand and store-level initiatives. The EBITDA margin rose 90 bps to 11.9%, and adjusted diluted earnings per share increased ~20% year over year to $0.42. Free cash flow remained robust, with $51 million operating cash flow and $32 million of operating free cash flow in the quarter, driving YTD FCF to about $90 million and positioning full-year FCF guidance at $180–$200 million. The balance sheet remained healthy: cash and equivalents of about $92 million, no revolver borrowings, and net debt around $369 million. The company also extended its share repurchase authorization (approx. $500 million remaining) and repurchased 1.1 million shares in Q2. Looking ahead, management maintained guidance for flat to slightly down comps in Q3 and full-year 2025, with adjusted operating margin projected at 8.0%–8.5%. The plan hinges on continued execution of strategic pillars (customer-centric initiatives, owned brands, innovation, and efficiency through Fuel for Growth) and tariff-mitigation actions (limited incremental impact anticipated in 2025). The call emphasized the momentum from Sally Beauty’s color and digital marketplaces, BSG’s replenishment and brand innovation, and the potential uplift from K18, LCOD, and Happy Beauty in the back half of the year.