(Former name, former address and former fiscal year, if changed since last report): N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April 29, 2022,~~January 27, 2023, there were ~~107,000,985~~107,328,599 shares of the issuer’s common stock outstanding.

In this Quarterly Report, references to “the Company,” “Sally Beauty,” “our company,” “we,” “our,” “ours” and “us” refer to Sally Beauty Holdings, Inc. and its consolidated subsidiaries unless otherwise indicated or the context otherwise requires.

Statements in this Quarterly Report on Form 10-Q and in the documents incorporated by reference herein which are not purely historical facts or which depend upon future events may constitute 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, which we refer to as the Exchange Act. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” or similar expressions may also identify such forward-looking statements. ~~Forward-looking statements may relate to, among other things, the impact on our business, operations and financial results of the novel coronavirus (“COVID-19”) pandemic.~~

Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made and 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. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth in our description of risk factors in Item 1A contained in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021,~~2022, which should be read in conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement.

The events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. As a result, our actual results may differ materially from the results contemplated by these forward-looking statements.

	March 31, 2022			September 30, 2021			December 31, 2022			September 30, 2022
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	227,413		$	400,959		$	99,071		$	70,558
Trade accounts receivable, net		28,615			32,623			32,671			34,102
Accounts receivable, other		32,100			33,958			42,741			38,175
Inventory		962,563			871,349			986,878			936,374
Other current assets		50,990			44,686			57,840			53,192
Total current assets		1,301,681			1,383,575			1,219,201			1,132,401
Property and equipment, net of accumulated depreciation of $800,715 at March 31, 2022, and $767,403 at September 30, 2021		287,855			307,377
Property and equipment, net of accumulated depreciation of $849,202 at December 31, 2022, and $820,811 at September 30, 2022								288,732			297,876
Operating lease assets		540,801			537,673			542,806			532,177
Goodwill		539,682			541,209			532,514			526,066
Intangible assets, excluding goodwill, net of accumulated amortization of $40,528 at March 31, 2022, and $38,957 at September 30, 2021		52,994			55,532
Intangible assets, excluding goodwill, net of accumulated amortization of $28,820 at December 31, 2022, and $26,794 at September 30, 2022								50,963			50,315
Other assets		19,990			21,766			34,330			38,032
Total assets	$	2,743,003		$	2,847,132		$	2,668,546		$	2,576,867
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	182		$	194		$	65,171		$	68,658
Accounts payable		240,594			291,632			296,170			275,717
Accrued liabilities		170,540			206,155			142,785			161,065
Current operating lease liabilities		160,549			156,234			156,168			157,734
Income taxes payable		2,404			10,666			16,972			4,740
Total current liabilities		574,269			664,881			677,266			667,914
Long-term debt		1,381,385			1,382,530			1,082,175			1,083,043
Long-term operating lease liabilities		406,658			404,147			427,168			424,762
Other liabilities		16,547			29,056			22,748			22,427
Deferred income tax liabilities, net		92,278			85,777			85,891			85,085
Total liabilities		2,471,137			2,566,391			2,295,248			2,283,231
Stockholders’ equity:
Common stock, $0.01 par value. Authorized 500,000 shares; 107,003 and 113,138 shares issued and 106,930 and 112,913 shares outstanding at March 31, 2022, and September 30, 2021, respectively		1,069			1,129
Preferred stock, $0.01 par value. Authorized 50,000 shares; NaN issued		—			—
Common stock, $0.01 par value. Authorized 500,000 shares; 107,291 and 107,024 shares issued and 107,284 and 106,970 shares outstanding at December 31, 2022, and September 30, 2022, respectively								1,073			1,070
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued								—			—
Additional paid-in capital		—			17,286			8,329			4,241
Accumulated earnings		372,265			356,967			490,509			440,172
Accumulated other comprehensive loss, net of tax		(101,468	)		(94,641	)		(126,613	)		(151,847	)
Total stockholders’ equity		271,866			280,741			373,298			293,636
Total liabilities and stockholders’ equity	$	2,743,003		$	2,847,132		$	2,668,546		$	2,576,867

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended				Six Months Ended				Three Months Ended
	March 31,				March 31,				December 31,
	2022		2021		2022		2021		2022		2021
Net sales	$	911,387	$	926,328	$	1,891,638	$	1,862,350	$	957,055	$	980,251
Cost of goods sold		446,055		459,099		926,177		924,397		468,481		480,122
Gross profit		465,332		467,229		965,461		937,953		488,574		500,129
Selling, general and administrative expenses		378,871		391,087		765,121		757,257		391,580		386,250
Restructuring		—		631		1,099		863		10,406		1,099
Operating earnings		86,461		75,511		199,241		179,833		86,588		112,780
Interest expense		19,896		23,883		40,137		49,861		17,923		20,241
Earnings before provision for income taxes		66,565		51,628		159,104		129,972		68,665		92,539
Provision for income taxes		19,757		13,316		43,458		34,469		18,328		23,701
Net earnings	$	46,808	$	38,312	$	115,646	$	95,503	$	50,337	$	68,838
Earnings per share:
Basic	$	0.43	$	0.34	$	1.05	$	0.85	$	0.47	$	0.61
Diluted	$	0.42	$	0.34	$	1.03	$	0.84	$	0.46	$	0.60
Weighted-average shares:
Basic		108,743		112,603		110,387		112,538		107,140		111,995
Diluted		110,540		114,342		112,207		114,028		109,460		113,968

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended						Six Months Ended						Three Months Ended
	March 31,						March 31,						December 31,
	2022			2021			2022			2021			2022			2021
Net earnings	$	46,808		$	38,312		$	115,646		$	95,503		$	50,337		$	68,838
Other comprehensive (loss) income:
Other comprehensive income (loss):
Foreign currency translation adjustments		(2,752	)		(7,890	)		(7,261	)		17,117			25,941			(4,509	)
Interest rate caps, net of tax		-			-			278			175			203			278
Foreign exchange contracts, net of tax		(324	)		574			156			(1,020	)		(910	)		480
Other comprehensive (loss) income, net of tax		(3,076	)		(7,316	)		(6,827	)		16,272
Other comprehensive income (loss), net of tax														25,234			(3,751	)
Total comprehensive income	$	43,732		$	30,996		$	108,819		$	111,775		$	75,571		$	65,087

The accompanying notes are an integral part of these condensed consolidated financial statements.

													Accumulated																	Accumulated
							Additional						Other			Total									Additional					Other			Total
	Common Stock						Paid-in			Accumulated			Comprehensive			Stockholders’			Common Stock						Paid-in			Accumulated		Comprehensive			Stockholders’
	Shares			Amount			Capital			Earnings			Loss			Equity			Shares			Amount			Capital			Earnings		Loss			Equity
Balance at September 30, 2021		112,913		$	1,129		$	17,286		$	356,967		$	(94,641	)	$	280,741
Balance at September 30, 2022																				106,970		$	1,070		$	4,241		$	440,172	$	(151,847	)	$	293,636
Net earnings		—			—			—			68,838			—			68,838			—			—			—			50,337		—			50,337
Other comprehensive loss		—			—			—			—			(3,751	)		(3,751	)
Other comprehensive income																				—			—			—			—		25,234			25,234
Share-based compensation		—			—			3,958			—			—			3,958			—			—			5,135			—		—			5,135
Stock issued for equity awards		795			8			7,364			—			—			7,372			404			4			78			—		—			82
Employee withholding taxes paid related to net share settlement		(56	)		(1	)		(1,136	)		—			—			(1,137	)		(90	)		(1	)		(1,125	)		—		—			(1,126	)
Repurchases and cancellations of common stock		(3,675	)		(36	)		(27,472	)		(47,492	)		—			(75,000	)
Balance at December 31, 2021		109,977		$	1,100		$	—		$	378,313		$	(98,392	)	$	281,021
Net earnings		—			—			—			46,808			—			46,808
Other comprehensive loss		—			—			—			—			(3,076	)		(3,076	)
Share-based compensation		—			—			2,032			—			—			2,032
Stock issued for equity awards		111			1			423			—			—			424
Employee withholding taxes paid related to net share settlement		(1	)		—			(15	)		—			—			(15	)
Repurchases and cancellations of common stock		(3,157	)		(32	)		(2,440	)		(52,856	)		—			(55,328	)
Balance at March 31, 2022		106,930		$	1,069		$	—		$	372,265		$	(101,468	)	$	271,866
Balance at December 31, 2022																				107,284		$	1,073		$	8,329		$	490,509	$	(126,613	)	$	373,298

												Accumulated																		Accumulated
							Additional					Other			Total									Additional						Other			Total
	Common Stock						Paid-in			Accumulated		Comprehensive			Stockholders’			Common Stock						Paid-in			Accumulated			Comprehensive			Stockholders’
	Shares			Amount			Capital			Earnings		Loss			Equity			Shares			Amount			Capital			Earnings			Loss			Equity
Balance at September 30, 2020		112,405		$	1,124		$	1,913		$	117,109	$	(104,703	)	$	15,443
Net earnings		—			—			—			57,191		—			57,191
Other comprehensive income		—			—			—			—		23,588			23,588
Share-based compensation		—			—			2,893			—		—			2,893
Stock issued for equity awards		158			2			(2	)		—		—			—
Employee withholding taxes paid related to net share settlement		(25	)		(1	)		(248	)		—		—			(249	)
Balance at December 31, 2020		112,538		$	1,125		$	4,556		$	174,300	$	(81,115	)	$	98,866
Balance at September 30, 2021																			112,913		$	1,129		$	17,286		$	356,967		$	(94,641	)	$	280,741
Net earnings		—			—			—			38,312		—			38,312			—			—			—			68,838			—			68,838
Other comprehensive loss		—			—			—			—		(7,316	)		(7,316	)		—			—			—			—			(3,751	)		(3,751	)
Share-based compensation		—			—			2,648			—		—			2,648			—			—			3,958			—			—			3,958
Stock issued for equity awards		141			2			2,321			—		—			2,323			795			8			7,364			—			—			7,372
Balance at March 31, 2021		112,679		$	1,127		$	9,525		$	212,612	$	(88,431	)	$	134,833
Employee withholding taxes paid related to net share settlement																			(56	)		(1	)		(1,136	)		—			—			(1,137	)
Repurchases and cancellations of common stock																			(3,675	)		(36	)		(27,472	)		(47,492	)		—			(75,000	)
Balance at December 31, 2021																			109,977		$	1,100		$	—		$	378,313		$	(98,392	)	$	281,021

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Six Months Ended March 31,						Three Months Ended December 31,
	2022			2021			2022			2021
Cash Flows from Operating Activities:
Net earnings	$	115,646		$	95,503		$	50,337		$	68,838
Adjustments to reconcile net earnings to net cash (used) provided by operating activities:
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation and amortization		48,471			52,945			25,285			24,421
Share-based compensation expense		5,990			5,541			5,135			3,958
Amortization of deferred financing costs		1,865			2,326			648			932
Loss on early extinguishment of debt		—			1,390
Impairment of long-lived assets, including operating lease assets								2,103			—
Loss on disposal of equipment and other property		80			1,741			77			3
Deferred income taxes		6,507			(365	)		889			1,867
Changes in (exclusive of effects of acquisitions):
Trade accounts receivable		3,800			(3,437	)		2,270			2,841
Accounts receivable, other		2,108			(5,544	)		(3,817	)		(1,724	)
Inventory		(95,468	)		(127,324	)		(38,019	)		(137,326	)
Other current assets		(6,273	)		3,588			(4,018	)		(446	)
Other assets		1,979			(4,307	)		4,074			1,371
Operating leases, net		3,657			(2,420	)		(10,392	)		6,475
Accounts payable and accrued liabilities		(70,217	)		101,331			7,606			16,729
Income taxes payable		(8,393	)		13,447			12,460			18,166
Other liabilities		(12,525	)		(2,859	)		313			(11,790	)
Net cash (used) provided by operating activities		(2,773	)		131,556
Net cash provided (used) by operating activities								54,951			(5,685	)
Cash Flows from Investing Activities:
Payments for property and equipment, net of proceeds		(44,109	)		(27,095	)		(25,007	)		(26,390	)
Acquisitions, net of cash acquired		(318	)		(2,245	)		—			(319	)
Net cash used by investing activities		(44,427	)		(29,340	)		(25,007	)		(26,709	)
Cash Flows from Financing Activities:
Repayments of long-term debt		(2,841	)		(213,271	)
Proceeds from issuance of long-term debt								229,000			—
Repayments of long-term debt, including prepayment costs								(233,927	)		(1,421	)
Payments for common stock repurchased		(130,328	)		—			—			(75,000	)
Proceeds from equity awards		7,796			2,322			60			7,372
Employee withholding taxes paid related to net share settlement of equity awards		(1,151	)		(249	)		(1,125	)		(1,136	)
Net cash used by financing activities		(126,524	)		(211,198	)		(5,992	)		(70,185	)
Effect of foreign exchange rate changes on cash and cash equivalents		178			3,152			4,561			(240	)
Net decrease in cash and cash equivalents		(173,546	)		(105,830	)
Net increase (decrease) in cash and cash equivalents								28,513			(102,819	)
Cash and cash equivalents, beginning of period		400,959			514,151			70,558			400,959
Cash and cash equivalents, end of period	$	227,413		$	408,321		$	99,071		$	298,140
Supplemental Cash Flow Information:
Interest paid	$	37,809		$	46,445		$	26,758		$	35,034
Income taxes paid	$	56,701		$	20,791		$	3,081		$	3,978
Capital expenditures incurred but not paid	$	3,205		$	3,255		$	5,542		$	3,594

The accompanying notes are an integral part of these condensed consolidated financial statements.

Sally Beauty Holdings is an international specialty retailer and distributor of professional beauty supplies with operations in North America, South America and Europe. We are one of the largest distributers of professional beauty supplies in the U.S. based on store count, operating under 2 segments, Sally Beauty Supply (“SBS”) and Beauty Systems Group (“BSG”). Our operations consist of company-operated stores, franchise stores and several e-commerce platforms. Within BSG, we also have one of the largest networks of distributor sales consultants (“DSCs”) for professional beauty products in North America, who sell directly to salons and salon professionals. SBS targets retail consumers, salons and salon professionals, while BSG targets salons and salons professionals.

The unaudited condensed consolidated interim financial statements of Sally Beauty Holdings, Inc. and its subsidiaries included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures included herein are adequate for the interim period presented. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly our consolidated financial position as of ~~March~~December 31, 2022, and September 30, ~~2021,~~2022, and our consolidated results of operations, consolidated comprehensive income, consolidated cash flows and consolidated statements of stockholders’ equity for the three ~~and six~~ months ended ~~March 31, 2022 and 2021 and our consolidated cash flows for the for the six months ended March~~December 31, 2022 and 2021.

The unaudited condensed consolidated interim financial statements include all accounts of Sally Beauty Holdings, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. All amounts are in U.S. Dollars.

We adhere to the same accounting policies in the preparation of our condensed consolidated interim financial statements as we do in the preparation of our full year consolidated financial statements. As permitted under GAAP, interim accounting for certain expenses, including income taxes, is based on full-year assumptions. For interim financial reporting purposes, income taxes are recorded based upon our estimated annual effective income tax.

In order to present our financial statements in conformity with GAAP, we are required to make certain estimates and assumptions that impact our interim financial statements and supplementary disclosures. These estimates may use forecasted financial information based on reasonable information available, however are subject to change in the future. ~~Additionally, unknown future impacts of COVID-19 may impact those estimates and assumptions as well.~~ Significant estimates and assumptions are part of our accounting for sales allowances, deferred revenue, valuation of inventory, amortization and depreciation, intangibles and goodwill, and other reserves. We believe these estimates and assumptions are ~~reasonable~~reasonable; however, they are based on management’s current knowledge of events and actions, and changes in facts and circumstances may result in revised estimates and impact actual results.

Our operating results for the three and six months ended March 31, 2022, were adversely impacted by the COVID-19 pandemic and its continuing effects on the economy, including inflationary pressures, continued supply chain disruptions, increased freight costs, labor shortages and increased labor costs. Given the uncertainty around the continuing effects of the COVID-19 pandemic and its economic impact we cannot reasonably predict the effect they will have on future periods. If we become materially and adversely impacted, we may have to consider adjustments to our strategic plans, inventory, liquidity, operational and capital expenditure plans.

Substantially all of our revenue is derived through the sale of merchandise at the point-of-sale. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data.

Changes to our contract liabilities, which are included in accrued liabilities in our condensed consolidated balance sheets, for the periods were as follows (in thousands):

		Six Months Ended March 31,							Three Months Ended December 31,
		2022			2021				2022			2021
Beginning Balance		$	16,744		$	13,947			$	13,460		$	16,744
Loyalty points and gift cards issued but not redeemed, net of estimated breakage	Loyalty points and gift cards issued but not redeemed, net of estimated breakage		6,214			7,998		Loyalty points and gift cards issued but not redeemed, net of estimated breakage		6,291			5,842
Revenue recognized from beginning liability	Revenue recognized from beginning liability		(6,316	)		(6,729	)	Revenue recognized from beginning liability		(4,489	)		(3,509	)
Ending Balance		$	16,642		$	15,216			$	15,262		$	19,077

See Note 9,10, Segment Reporting, for additional information regarding the disaggregation of our sales revenue.

We measure on a recurring basis and disclose the fair value of our financial instruments under the provisions of ASC Topic 820, Fair Value Measurement, as amended (“ASC 820”). We define “fair value” as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for measuring fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date.

Level 1 - Quoted prices are available in active markets for identical assets or liabilities;

Level 2 - Pricing inputs are other than quoted prices in active markets, included in Level 1, that are either directly or indirectly observable; and

Level 3 - Unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own model with estimates and assumptions.

Consistent with the ~~three-level~~fair value hierarchy, ~~defined in ASC Topic 820,~~ ~~Fair Value Measurement, as amended,~~ we ~~categorize~~categorized our financial assets and liabilities as ~~follows:~~follow:

(in thousands)	Classification	Fair Value Hierarchy Level	March 31, 2022		September 30, 2021		Classification	Fair Value Hierarchy Level	December 31, 2022		September 30, 2022
Financial Assets:
Foreign exchange contracts	Other current assets	Level 2	$	329	$	—
Non-designated cash flow hedges							Other current assets	Level 2	$	4,463	$	294
Interest rate caps	Other assets	Level 2		133		35	Other current assets	Level 2		3,627		3,860
Total assets			$	462	$	35			$	8,090	$	4,154
.
Financial Liabilities:
Foreign exchange contracts	Accrued liabilities	Level 2	$	612	$	—
Designated cash flow hedges							Accrued liabilities	Level 2	$	1,930	$	—
Non-designated cash flow hedges							Accrued liabilities	Level 2		4,045		79
Total liabilities									$	5,975	$	79

~~Financial instruments not measured at~~The fair value for interest rate caps and foreign exchange contracts were measured using widely accepted valuation techniques, such as discounted cash flow analyses and observable inputs, such as market interest rates and foreign exchange rates.

The carrying amounts of cash equivalents, trade and other accounts receivable and accounts payable and borrowing under our ABL facility approximate their respective fair values due to the short-term nature of these financial instruments.Carrying amounts and the related estimated fair value of our long-term debt, excluding capital lease obligations and debt issuance costs, are as follows:

		March 31, 2022				September 30, 2021					December 31, 2022				September 30, 2022
(in thousands)	Fair Value Hierarchy Level	Carrying Value		Fair Value		Carrying Value		Fair Value		Fair Value Hierarchy Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, excluding capital leases
Senior notes	Level 1	$	979,961	$	1,000,636	$	979,961	$	1,019,635	Level 1	$	679,961	$	652,763	$	679,961	$	639,163
Term loan B	Level 2		410,250		405,122		413,000		411,451	Level 2		406,125		403,587		407,500		398,331
Total long-term debt		$	1,390,211	$	1,405,758	$	1,392,961	$	1,431,086		$	1,086,086	$	1,056,350	$	1,087,461	$	1,037,494

~~The table above excludes amounts, if any, related to our ABL facility as the balance approximates fair value due to the short-term nature of our borrowings.~~The fair value of ~~the senior notes was measured using unadjusted quoted market prices. The fair value of other long-term debt~~term loan B was measured using quoted market prices for similar debt securities in active markets or widely accepted valuation techniques, such as discounted cash flow analyses, using observable inputs, such as market interest rates.

In August 2017, our Board of Directors (“Board”) approved a share repurchase program authorizing ~~the Company~~us to repurchase up to $1.0 billion of its common stock, subject to certain limitations governed by our debt agreements. In July 2021, our Board ~~of Directors~~ approved a term extension of the share repurchase program for the four-year period ending September 30, 2025. As of ~~March~~December 31, 2022, we had authorization of approximately $595.8 million of additional potential share repurchases remaining under our share repurchase program.

~~Information related to~~ For the three months ended December 31, 2022, we did not repurchase shares under our share repurchase program. For the three months ended December 31, 2021, we repurchased 3.7 million shares ~~repurchased and subsequently retired were as follows (in thousands):~~

The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands):

The tax impact for the changes in other comprehensive loss and the reclassifications to net earnings was not material.

The following table sets forth the reconciliation of basic and diluted weighted-average shares (in thousands):

	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended December 31,
	2022		2021		2022		2021		2022		2021
Weighted-average basic shares		108,743		112,603		110,387		112,538		107,140		111,995
Dilutive securities:
Stock option and stock award programs		1,797		1,739		1,820		1,490		2,320		1,973
Weighted-average diluted shares		110,540		114,342		112,207		114,028		109,460		113,968

Anti-dilutive options excluded from our computation of diluted shares		2,534		4,197		2,169		4,222		2,123		2,775

~~6. Goodwill~~We considered potential triggering events and ~~Intangible Assets~~

~~During~~determined there were none for the three months ended ~~March~~December 31, 2022, we completed our annual assessment for impairment of goodwill and other intangible assets. For goodwill, we used a qualitative analysis and our actual and forecasted results are exceeding the estimates from the last quantitative test. NaN2022. No material impairment losses were recognized in the current or prior periods presented in connection with our goodwill and other intangible assets.

Additionally, during the ~~six~~three months ended ~~March~~December 31, 2022, the ~~decrease~~changes in goodwill ~~was~~and other intangibles were primarily from the effects of foreign currency exchange rates of ~~$1.5~~$6.4 million and $1.7 million, respectively. During the three months ended December 31, 2021, the changes in goodwill were primarily from the effects of foreign currency exchange rates of $0.9 million.

	March 31, 2022		September 30, 2021		December 31, 2022		September 30, 2022
Compensation and benefits	$	55,300	$	73,344	$	46,027	$	58,693
Interest payable		24,103		24,101
Deferred revenue		18,410		18,543		20,384		18,810
Rental obligations		10,754		10,501		14,353		10,701
Insurance reserves		5,962		5,934		6,104		5,742
Property and other taxes		2,293		3,853		4,266		4,161
Interest payable						3,865		13,445
Operating accruals and other		53,718		69,879		47,786		49,513
Total accrued liabilities	$	170,540	$	206,155	$	142,785	$	161,065

~~8. Derivative Instruments~~ At December 31, 2022, our ABL facility had $65.0 million in outstanding borrowingsand ~~Hedging Activities~~$417.7 million available for borrowing, including the Canadian sub-facility, subject to the conditions contained therein.

During the ~~six~~three months ended ~~March~~December 31, 2022, we did 0tnot purchase or hold any derivative instruments for trading or speculative purposes. See Note 3, Fair Value Measurements, for the classification and fair value of our derivative instruments.

We regularly enter into foreign currency forwards to mitigate our exposure to exchange rate changes on forecasted inventory purchases in U.S. dollars by our foreign subsidiaries. At ~~March~~December 31, 2022, we held forwards, which expire ratably through September 30, ~~2022,~~2023, with a notional amount, based upon exchange rates at ~~March~~December 31, 2022, as follows (in thousands):

Notional Currency	Notional Amount		Notional Amount
Mexican Peso	$	13,013	$	17,629
Euro		8,551		11,549
Canadian Dollar		5,804		8,921
Total	$	27,368	$	38,099

Quarterly, the changes in fair value related to ~~the~~these foreign currency forwards are recorded into AOCL. As the forwards are exercised, the realized value is recognized into cost of goods sold, based on inventory turns, in our condensed consolidated statements of earnings. For the ~~six~~three months ended ~~March~~December 31, 2022 and 2021, we recognized a ~~loss~~gain of ~~$0.4~~$0.3 million and a ~~gain~~loss of ~~$0.4~~$0.3 million, respectively. ~~The effects of our foreign currency forwards were not material for the three months ended March 31, 2022 and 2021.~~ Based on ~~March~~December 31, 2022, valuations and exchange rates, we expect to reclassify losses of approximately ~~$0.1~~$1.6 million into cost of goods sold over the next 12 months.

In July 2017, we purchased 2two interest rate caps with an initial aggregate notional amount of $550 million (the “interest rate caps”) to mitigate the exposure to higher interest rates in connection with our term loan B. The interest rate caps are comprised of individual caplets that expire ratably through June 30, 2023, and are designated as cash flow hedges. Accordingly, changes in fair value of the interest rate caps are recorded quarterly, net of income tax, and are included in AOCL.

For the ~~six~~three months ended ~~March~~December 31, 2022 and 2021, we recognized expense of ~~$0.4~~$0.1 million and ~~$0.2~~$0.4 million, respectively, into interest expense on our condensed consolidated statements of earnings. ~~The effects of our interest rate caps on our condensed consolidated statements of earnings were not material for the three months ended March 31, 2022 and 2021.~~ Over the next 12 months, we expect to reclassify gains of

approximately ~~$1.9~~$2.6 million into interest expense, which represents estimated interest rate settlements less the original value of the expiring caplets.

We also use foreign exchange contracts to mitigate our exposure to exchange rate changes in connection with certain intercompany balances not permanently invested. At December 31, 2022, we held forwards, which expire on various dates in the first month of both the second and third fiscal quarters of fiscal year 2023, with a notional amount, based upon exchange rates at December 31, 2022, as follows (in thousands):

We record changes in fair value and realized gains or losses related to these foreign currency forwards into selling, general and administrative expenses. For the three months ended December 31, 2022 and 2021, the effects of these foreign exchange contracts on our condensed consolidated financial statements were gains of $0.4 million in both years.

Segment data for the three ~~and six~~ months ended ~~March~~December 31, 2022 and 2021, is as follows (in thousands):

	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended December 31,
	2022		2021		2022		2021		2022		2021
Net sales:
Sally Beauty Supply ("SBS")	$	525,785	$	542,664	$	1,087,315	$	1,090,334	$	549,472	$	561,530
Beauty Systems Group ("BSG")		385,602		383,664		804,323		772,016		407,583		418,721
Total	$	911,387	$	926,328	$	1,891,638	$	1,862,350	$	957,055	$	980,251
Earnings before provision for income taxes:
Segment operating earnings:
SBS	$	80,940	$	100,063	$	181,563	$	195,191	$	99,174	$	100,623
BSG		46,008		47,843		104,554		96,415		49,647		58,546
Segment operating earnings		126,948		147,906		286,117		291,606		148,821		159,169
Unallocated expenses		40,487		71,764		85,777		110,910		51,827		45,290
Restructuring		—		631		1,099		863		10,406		1,099
Consolidated operating earnings		86,461		75,511		199,241		179,833		86,588		112,780
Interest expense		19,896		23,883		40,137		49,861		17,923		20,241
Earnings before provision for income taxes	$	66,565	$	51,628	$	159,104	$	129,972	$	68,665	$	92,539

Sales between segments, which are eliminated in consolidation, were not material during the three ~~and six~~ months ended ~~March~~December 31, 2022 and 2021.

The following tables disaggregate our segment revenues by merchandise category. We have reclassified certain prior year amounts within BSG to conform to current year presentation.

	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended December 31,
SBS	2022			2021			2022			2021			2022			2021
Hair color		38.1	%		35.8	%		37.4	%		35.9	%		38.7	%		36.8	%
Hair care		24.1	%		21.7	%		24.0	%		21.4	%		23.4	%		23.8	%
Styling tools and supplies		19.2	%		22.8	%		19.7	%		22.9	%		19.5	%		20.2	%
Nail		10.6	%		10.7	%		10.5	%		10.8	%		10.3	%		10.4	%
Skin and cosmetics		7.4	%		8.3	%		7.7	%		8.3	%		7.4	%		7.9	%
Other beauty items		0.6	%		0.7	%		0.7	%		0.7	%		0.7	%		0.9	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended December 31,
SBS	2022			2021			2022			2021			2022			2021
Company-operated stores		93.7	%		93.0	%		94.0	%		93.5	%		93.6	%		94.2	%
E-commerce		6.3	%		6.9	%		6.0	%		6.5	%		6.4	%		5.8	%
Franchise stores		0.0	%		0.1	%		0.0	%		0.0	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended December 31,
BSG	2022			2021			2022			2021			2022			2021
Company-operated stores		66.6	%		70.2	%		67.1	%		69.9	%		66.3	%		67.5	%
E-commerce														13.6	%		11.7	%
Distributor sales consultants		14.0	%		13.7	%		13.8	%		14.0	%		12.6	%		13.6	%
E-commerce		12.4	%		9.1	%		12.0	%		8.8	%
Franchise stores		7.0	%		7.0	%		7.1	%		7.3	%		7.5	%		7.2	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Restructuring expenses, included in Cost of Goods Sold (“COGS”) and Restructuring for the three months ended December 31, 2022 and 2021 are as follows (in thousands):

~~10. Subsequent Event~~Distribution Center Consolidation and Store Optimization Plan

~~On April 29,~~In the fourth quarter of fiscal year 2022, our Board approved the Distribution Center Consolidation and Store Optimization Plan authorizing the closure of 330 SBS stores and 35 BSG stores, and the closure of two BSG distribution centers in Clackamas, Oregon and Pottsville, Pennsylvania (“the Plan”).

During the three months ended December 31, 2022, we ~~announced~~completed the closure of the two BSG distributions centers. We believe that consolidating the operation of these two distribution centers into our ~~wholly-owned subsidiaries, Sally Holdings LLC (“Holdings”)~~larger distribution centers will increase product availability, shorten delivery times and ~~Sally Capital Inc. (together with Holdings, the “Issuers”), issued a notice~~reduce overall costs.

As of ~~redemption (the “Redemption Notice”), to redeem on May~~December 31, 2022, ~~the entire $300.00 million aggregate principal amount~~we have closed 327 SBS stores and 14 BSG stores as part of the ~~8.750% Senior Secured Second Lien Notes due 2025 (“Notes”)~~Plan.

Stores identified for early closure were part of a strategic evaluation which ~~remain outstanding.~~ included a market analysis of certain locations where we believe we will be able to recapture demand at other nearby store locations and improve overall profitability. By optimizing our store base, we are further focusing on our customers’ shopping experience and our product offerings.

The ~~redemption is being made pursuant~~Plan will continue to be executed throughout fiscal year 2023 and into the first half of fiscal year 2024, and therefore it may include future charges related to store closures such as exit costs, lease negotiation penalties, termination benefits and adjustments to estimates.

The liability related to the ~~terms of the Indenture dated April 24, 2020, at a redemption price equal to 104.375% of the principal amount of the Notes plus~~Plan, which is included in accrued ~~but unpaid interest to, but not including, the redemption date.~~liabilities on our consolidated balance sheets, is as follows:

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section discusses management’s view of the financial condition, results of operations and cash flows of Sally Beauty. This section should be read in conjunction with the information contained in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022, including the Risk Factors sections therein, and information contained elsewhere in this Quarterly Report, including the condensed consolidated interim financial statements and notes to those financial statements.

~~Our results in~~For fiscal 2023, we are focusing on three key strategic initiatives to drive growth and profitability:

We believe focusing in these areas will position our company for future growth and further enhance our ability to meet our customers where they are.

During the quarter, BSG launched a new strategic partnership with Salon HQ. Salon HQ is a customizable digital storefront platform that gives stylists the ability to curate a product selection from thousands of BSG merchandise choices and enables their clients to purchase directly from their shops without the stylists having to finance and carry inventory. In addition, SBS has identified the locations for its initial Studio by Sally pilot stores that we expect to open this fiscal year. The Studio by Sally pilot store program will have a digital-first focus, from digital check-in to digital education throughout the store and beyond, including personalized appointments at our in-store salons with licensed stylists who will train and educate consumers on how to color their own hair and achieve their desired results. We believe that we will be able to expand the Studio by Sally concept to 100 locations throughout the U.S. over the next three to four fiscal years if successful.

We believe growing our SBS owned-brands, through innovation and marketing, will provide improved margins, strengthen our long-term relationships with existing customers and help attract new customers. During the quarter, we invested more into marketing of our owned-brands and launched the first phase of our new owned-branded hair repair product line – bondbar. These initiatives delivered an increase in our owned-brands sales penetration, resulting in increased SBS profit margins.

Furthermore, we look forward to providing salons and stylists with new innovations from our BSG vendors as they are launched over the next two fiscal quarters.

In the fourth quarter of fiscal year 2022, we announced our plan to close 330 SBS stores, 35 BSG stores and two BSG distribution centers. Based on our strategic evaluation, we believe that we will able to recapture demand of closed stores in other nearby store locations and improve overall profitability. During the quarter, we completed the closure of our two BSG distributions centers and the majority of our planned store closures. Additionally, we re-optimized our store supply chain network based on our new store fleet. As of December 31, 2022, we ~~believe we~~have closed 327 SBS stores and 14 BSG stores as part of the Plan and are ~~well-positioned to navigate these macro headwinds and continue to drive growth~~currently meeting our sales recapture expectations.

See Note 11, Restructuring, in ~~both~~Item 1 of ~~our businesses, retail and professional.~~this quarterly report for more information on the Plan.

~~Throughout~~Global inflationary pressures continue to influence consumer and stylist behavior along with the ~~current quarter~~cost for products and ~~year~~services.In the U.S. and Canada, we ~~continued~~are seeing our SBS customers color their hair less frequently and reduce the size of their basket when they shop with us, while at BSG we are seeing stylists purchasing closer to ~~experience disruptions to our business as a result of~~ the COVID-19 pandemic and continued to take certain actions in order to protect our customers and associates. In particular, our store operations were disrupted by the Omicron variant due to employee illnesses primarily in December and January and we continued to incur additional costs associated with testing and vaccinations, disinfectant cleanings in connection with positive cases in stores and support centers, and ~~the write-down of obsolete personal-protective equipment inventory~~.

~~Due to general labor shortages in the U.S.,~~time they use products. Additionally, inflationary pressures have impacted wages, especially among retail and hourly employees, as we have ~~also~~ experienced ~~staffing shortages at our U.S. stores and~~ an increase in our ~~compensation~~labor costs in order to attract and retain associates. During the current quarter, these headwinds have resulted in lower traffic and conversion in our business and increases in certain operating costs. We continue to monitor these challenges and implement measures to help mitigate their impacts, including managing our inventory levels to reduce out-of-stock items, adjusting our promotional activities, optimizing our store base and expanding our partnerships with delivery service providers. Although these initiatives have helped mitigate ongoing macro-headwinds, we cannot reasonably predict the long-term effects of inflation.

Furthermore, in a measure to curb inflation, the U.S. Federal Reserve has increased the federal funds effective rate. In turn, these increases have raised the cost of debt borrowings. We currently have $471.1 million in variable rate debt outstanding, of which $406.1 million is hedged with interest rate caps to help mitigate the impact of raising rates. Future increases in the federal funds effective rate could have a material adverse impact to our cost of borrowing, including any future changes in our debt structure.

While we have seen signs of stabilization from the ~~situation has been improving,~~impacts of the COVID-19 virus, we cannot reasonably predict the effects of new variants or expect ~~these positive~~improving trends to continue. Therefore, our future performance may partially depend on impacts of COVID-19, such as decreased customer in-store traffic, ~~new waves of infection,~~temporary store closures, and labor and supply chain ~~disruptions, developing variants, changes in guidance from international and domestic authorities, and availability and timing of vaccines.~~disruptions.

Refer to Item 1A. “Risk Factors” in our Form 10-K for the fiscal year ended September 30, ~~2021,~~2022, for further discussion on the risks and uncertainties created by COVID-19.

There continues to be volatility in the global supply chain as shipment delays continue to impact ports, inflationary pressures are exacerbated by global political instability, and consumer demand continues to evolve as a lingering effect from the COVID-19 pandemic. In the current quarter we continued to experience elevated distribution costs as these shifts in demand and supply have led to longer lead times and delays, and carriers are faced with increased costs associated with capacity imbalances between ports as well as overall prolonged transportation challenges. Moreover, the war in Ukraine has created additional uncertainty in the global markets, which have seen a rise in fuel prices, and is another factor impacting distribution costs. Due to these events, we have seen an increase in our inbound freight costs and extended inventory in transit times. Inflationary pressures also impacted customer behavior which resulted in lower traffic and conversion in the current quarter.

We ~~have recently launched many digital initiatives to support our omni-channel strategies to provide customers an enhanced shopping experience. As such, we~~ believe that comparable sales is an appropriate performance indicator to measure our sales growth compared to the prior period. 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 excludes the effect of changes in foreign exchange rates and sales from stores relocated until 14 months after the relocation. Revenue from acquisitions are excluded from our comparable sales calculation until 14 months after the acquisition. Our calculation of comparable sales might not be the same as other retailers as the calculation varies across the retail industry.

The following table sets forth, for the periods indicated, information concerning key measures we rely on to evaluate our operating performance (dollars in thousands):

	Three Months Ended March 31,												Six Months Ended March 31,													Three Months Ended December 31,
	2022			2021			Increase (Decrease)						2022			2021			Increase (Decrease)							2022			2021			Increase (Decrease)
Net sales:
SBS	$	525,785		$	542,664		$	(16,879	)		(3.1	)%	$	1,087,315		$	1,090,334		$	(3,019	)		(0.3	)%		$	549,472		$	561,530		$	(12,058	)		(2.1	)%
BSG		385,602			383,664			1,938			0.5	%		804,323			772,016			32,307			4.2	%			407,583			418,721			(11,138	)		(2.7	)%
Consolidated	$	911,387		$	926,328		$	(14,941	)		(1.6	)%	$	1,891,638		$	1,862,350		$	29,288			1.6	%		$	957,055		$	980,251		$	(23,196	)		(2.4	)%

Gross profit:
SBS	$	309,262		$	317,161		$	(7,899	)		(2.5	)%	$	637,434		$	632,973		$	4,461			0.7	%		$	323,475		$	328,172		$	(4,697	)		(1.4	)%
BSG		156,070			150,068			6,002			4.0	%		328,027			304,980			23,047			7.6	%			165,099			171,957			(6,858	)		(4.0	)%
Consolidated	$	465,332		$	467,229		$	(1,897	)		(0.4	)%	$	965,461		$	937,953		$	27,508			2.9	%		$	488,574		$	500,129		$	(11,555	)		(2.3	)%

Segment gross margin:
SBS		58.8	%		58.4	%	40			bps				58.6	%		58.1	%	50			bps					58.9	%		58.4	%	50			bps
BSG		40.5	%		39.1	%	140			bps				40.8	%		39.5	%	130			bps					40.5	%		41.1	%	(60)			bps
Consolidated		51.1	%		50.4	%	70			bps				51.0	%		50.4	%	60			bps					51.0	%		51.0	%	—			bps

Net earnings:
Segment operating earnings:
SBS	$	80,940		$	100,063		$	(19,123	)		(19.1	)%	$	181,563		$	195,191		$	(13,628	)		(7.0	)%		$	99,174		$	100,623		$	(1,449	)		(1.4	)%
BSG		46,008			47,843			(1,835	)		(3.8	)%		104,554			96,415			8,139			8.4	%			49,647			58,546			(8,899	)		(15.2	)%
Segment operating earnings		126,948			147,906			(20,958	)		(14.2	)%		286,117			291,606			(5,489	)		(1.9	)%			148,821			159,169			(10,348	)		(6.5	)%
Unallocated expenses and restructuring^(a)		40,487			72,395			(31,908	)		(44.1	)%		86,876			111,773			(24,897	)		(22.3	)%			62,233			46,389			15,844			34.2	%
Consolidated operating earnings		86,461			75,511			10,950			14.5	%		199,241			179,833			19,408			10.8	%			86,588			112,780			(26,192	)		(23.2	)%
Interest expense		19,896			23,883			(3,987	)		(16.7	)%		40,137			49,861			(9,724	)		(19.5	)%			17,923			20,241			(2,318	)		(11.5	)%
Earnings before provision for income taxes		66,565			51,628			14,937			28.9	%		159,104			129,972			29,132			22.4	%			68,665			92,539			(23,874	)		(25.8	)%
Provision for income taxes		19,757			13,316			6,441			48.4	%		43,458			34,469			8,989			26.1	%			18,328			23,701			(5,373	)		(22.7	)%
Net earnings	$	46,808		$	38,312		$	8,496			22.2	%	$	115,646		$	95,503		$	20,143			21.1	%		$	50,337		$	68,838		$	(18,501	)		(26.9	)%
	.																									.
Number of stores at end-of-period (including franchises):
Number of stores at end-of-period (including franchises)^(b):																									Number of stores at end-of-period (including franchises)^(b):
SBS														3,499			3,625			(126	)		(3.5	)%			3,146			3,529			(383	)
BSG														1,363			1,379			(16	)		(1.2	)%			1,352			1,364			(12	)
Consolidated														4,862			5,004			(142	)		(2.8	)%			4,498			4,893			(395	)
Comparable sales growth (decline)^(b):
Comparable sales growth (decline):																									Comparable sales growth (decline):
SBS		(0.5	)%		3.7	%	(420)			bps				2.0	%		(0.2	)%	220			bps					3.0	%		4.4	%	(140)			bps
BSG		1.3	%		8.0	%	(670)			bps				4.9	%		0.2	%	470			bps					(1.5	)%		8.6	%	(1,010)			bps
Consolidated		0.2	%		5.4	%	(520)			bps				3.2	%		(0.1	)%	330			bps					1.1	%		6.1	%	(500)			bps

The Three Months Ended ~~March~~December 31, 2022, compared to the Three Months Ended ~~March~~December 31, 2021

SBS. The decrease in net sales for SBS was primarily driven by the following (in thousands):

Comparable sales	$	(2,580	)	$	15,954
Sales outside comparable sales ^(a)		(10,409	)		(16,220	)
Foreign currency exchange		(3,890	)		(11,792	)
Total	$	(16,879	)	$	(12,058	)

The decrease in SBS’s net sales was driven by ~~lower unit volume, primarily due to operating fewer stores compared to~~ the ~~same period last year, lower traffic~~negative impact from foreign exchange rates and ~~conversion due to~~ the impact of ~~COVID-19, supply chaindisruptions, the lapping of stimulus gains~~store closures in the prior ~~year, and inflationary pressures impacting consumer behavior, along with~~twelve months, including stores closed under the ~~negative impact of foreign exchange rates. This decrease was~~Plan, partially offset by an increase in our comparable sales. SBS’s comparable sales increase was driven by a growth in average ~~unit prices, led~~ticket, primarily from inflationary impacts and pricing leverage, and partially offset by ~~our color and care categories.~~fewer transactions.

BSG. The ~~increase~~decrease in net sales for BSG was primarily driven by the following (in thousands):

Comparable sales	$	4,737		$	(6,109	)
Sales outside comparable sales ^(a)		(2,741	)		(2,396	)
Foreign currency exchange		(58	)		(2,633	)
Total	$	1,938		$	(11,138	)

The ~~increase~~decrease in BSG’s net sales was ~~driven by an increase in comparable sales,~~ primarily due to ~~an increase~~lower comparable sales, the impact of closed stores and the negative impact from the Canadian foreign exchange rate. BSG’s comparable sales faced headwinds from elevated demand in the prior year from the easing of COVID-19 restrictions and the impacts of the current economic environment which resulted in fewer transactions, but was partially offset by growth in average ~~unit prices and from strong e-commerce growth. These increases were offset by a decrease in overall unit volume due to operating fewer stores compared to the same period last year.~~ticket.

SBS. SBS’s gross profit decreased for the three months ended ~~March~~December 31, 2022, as a result of ~~a decrease in~~lower net sales, partially offset by a higher gross margin. SBS’s gross margin ~~increased primarily~~grew as a result of pricing leverage and ~~a decrease in write-downs~~increased penetration of ~~obsolete personal-protective equipment, partially offset by higher distribution and freight costs and an unfavorable sales mix shift between the U.S. and international markets.~~our owned-brand products.

BSG. BSG’s gross profit ~~increased~~decreased for the three months ended ~~March~~December 31, 2022, as a result of lower net sales and a lower gross margin. BSG’s gross margin decline was driven by lower product margin resulting from an ~~improvement in pricing leverage~~unfavorable sales channel mix between stores and ~~a decrease in write-downs of obsolete personal-protective equipment,~~lower-margin Regis e-commerce sales, partially offset by ~~higher distribution and freight costs.~~adjustments to our expected obsolescence reserve related to the Plan.

SBS. SBS’s selling, general and administrative expenses ~~increased $11.2~~decreased $3.2 million, or ~~5.2%~~1.4%, for the three months ended ~~March~~December 31, ~~2022.~~2022 and included a favorable impact from foreign exchange rates of $4.6 million. As a percentage of SBS net sales, SG&A for the three months ended December 31, 2022 was 40.8% compared to 40.5% for the three months ended December 31, 2021. The increase as a percentage of sales was driven ~~primarily~~ by ~~higher compensation and compensation-related expenses~~deleveraging as a result of ~~$8.9 million, driven by general economic inflationary conditions and to store re-openings in certain international markets, as well as higher store facility costs associated with those re-openings.~~lower net sales.

BSG. BSG’s selling, general and administrative expenses increased ~~$7.8~~$2.0 million, or ~~7.7%~~1.8%, for the three months ended ~~March~~December 31, 2022. As a percentage of BSG net sales, SG&A for the three months ended December 31, 2022 was 28.3% compared to 27.1% for the three months ended December 31, 2021. The increase as a percentage of sales was driven primarily by ~~higher delivery expense of $1.9 million~~deleveraging as a result of ~~supply chain disruptions and the cost of fuel. Additionally, there were~~lower net sales as well as increases in ~~depreciation expense of $1.0 million, credit card fees of $0.9 million~~labor and ~~other increases in variable operating~~personnel costs and depreciation expenses.

Unallocated. Unallocated selling, general and administrative expenses, which represent certain corporate costs that have not been charged to our reporting segments, ~~decreased $31.3~~increased $6.5 million, or ~~43.6%~~14.4%, for the three months ended ~~March~~December 31, 2022, primarily due to increased labor and personnel costs of $4.6 million and information technology expense of $2.9 million.

For the ~~recognition of $31.2~~three months ended December 31, 2022, we incurred $10.4 million ~~donation expense~~in restructuring charges related to ~~personal-protective equipment inventory~~our Distribution Center Consolidation and Store Optimization Plan. For the three months ended December 31, 2021, restructuring charges in connection with our previously communicated Transformation Plan were immaterial. See Note 11, Restructuring, in Item 1 of this quarterly report for more information on the ~~prior period.~~Plan.

The decrease in interest expense is ~~primarily~~ due to the ~~lower outstanding debt principal for~~interest savings from the ~~three months ended March 31, 2022, as a result of the pay-down~~repayment of our ~~senior notes~~8.75% Senior Notes due ~~2023 and our term loan B fixed tranche~~2025 during fiscal year ~~2021. Additionally, we recognized $1.4 million~~2022, partially offset by higher interest expense on our variable rate debt resulting from the increase in borrowing rates and outstanding amounts under our ABL facility. See Note 9, Derivatives, in Item 1 of ~~loss~~this quarterly report for more information on ~~debt extinguishment in connection with the pay-down of~~ our ~~term loan B fixed tranche in the prior period with no comparable amounts in the current period. See “Liquidity and Capital Resources” below for additional information.~~interest rate caps used to help mitigate raising interest rates.

The effective tax rates were ~~29.7%~~26.7% and ~~25.8%~~25.6%, for the three months ended ~~March~~December 31, 2022, and 2021, respectively. The increase in the effective tax rate was primarily due to the tax impact of ~~the write-off of deferred tax assets related to~~ share-based compensation ~~in connection with expired stock options.~~

~~The Six Months Ended March 31, 2022, compared to the Six Months Ended March 31, 2021~~

~~SBS~~. ~~The decrease in net sales for SBS~~which was ~~primarily driven by the following (in thousands):~~

The decrease in net sales was driven by lower unit volume, primarily due to operating fewer stores compared to the same period last year, and the negative impact of foreign exchange rates. This decrease was partially offset by an increase in comparable sales, reflecting stronger customer demanddetrimental in the ~~first fiscal~~current year quarter, ~~and higher average unit prices, led by our color and care categories.~~

~~BSG~~. ~~The increase in net sales for BSG was primarily driven by the following (in thousands):~~

The increase in net sales was driven by an increase in comparable sales, primarily due to an increase in average unit prices and from strong e-commerce growth. These increases were offset by a decrease in overall unit volume due to operating fewer stores compared to the same period last year.

~~SBS~~. SBS’s gross profit increased for the six months ended March 31, 2022, as a result of a higher gross margin, primarily due to pricing leverage and a decrease in obsolete personal-protective equipment write-downs, partially offset by higher distribution and freight costs.

~~BSG~~. BSG’s gross profit increased for the six months ended March 31, 2022, driven by an increase in sales, and improvement of pricing leverage, coupled with a decrease in personal-protective equipment write-downs.

~~SBS~~. SBS’s selling, general and administrative expenses increased $18.1 million, or 4.1%, for the six months ended March 31, 2022. The increase was driven primarily by higher compensation and compensation-related expenses of $18.6 million, as a result of general economic inflationary conditions and store re-openings in certain international markets.

~~BSG~~. BSG’s selling, general and administrative expenses increased $14.9 million, or 7.1%, for the six months ended March 31, 2022. The increase was driven primarily by an increase in delivery expense of $2.5 million, compensation and compensation-related expenses of $2.3 million, depreciation expense of $1.9 million, advertising expense of $1.6 million, technology expense of $1.1 million and other increases in variable operating expenses.

~~Unallocated.~~ Unallocated selling, general and administrative expenses, which represent certain corporate costs that have not been charged to our reporting segments, decreased $25.1 million, or 22.7%, for the six months ended March 31, 2022, driven by the recognition of $31.2 million donation expense related to personal-protective equipment inventorybut beneficial in the prior ~~period, partially offset by an increase in information technology expense of $2.7 million.~~

~~For the six months ended March 31, 2022, restructuring charges in connection with our previously communicated Transformation Plan increased $0.2 million, to $1.1 million for the current year.~~

The decrease in interest expense is primarily due to the lower outstanding debt principal for the six months ended March 31, 2022, as a result of the pay-down of our senior notes due 2023 and our term loan B fixed tranche during fiscal year 2021. Additionally, we recognized $1.4 million of loss on debt extinguishment in connection with the pay-down of our term loan B fixed tranche in the prior period with no comparable amounts in the current period. See “Liquidity and Capital Resources” below for additional information.

The effective tax rates were 27.3% and 26.5%, for the six months ended March 31, 2022 and 2021, respectively. The increase in the effective tax rate was primarily due to an increase in foreign losses, for which we do not receive a tax benefit, and the write-off of deferred tax assets related to share-based compensation in connection with expired stock option awards.quarter.

WeOur principal sources of liquidity are ~~highly leveraged~~from cash and acash equivalents, cash from operations and our ABL facility. A substantial portion of our liquidity needs arise ~~from debt service on our outstanding indebtedness and~~ from funding the costs of our operations, working capital, capital expenditures, debt ~~repayment~~interest and principal payment. Additionally, under our share ~~repurchases.~~ repurchase program, see below for more details, we will repurchase shares of our common stock on the open market to return value to our shareholders. At December 31, 2022, we had $440.8 million in our liquidity pool, which includes $417.7 million available for borrowings under our ABL facility and cash and cash equivalents of $99.1 million.

Working capital (current assets less current liabilities) increased ~~$8.7~~$77.4 million, to ~~$727.4~~$541.9 million at ~~March~~December 31, 2022, compared to ~~$718.7~~$464.5 million at September 30, ~~2021, primarily~~2022. This increase was driven by higher inventory balances, resulting from ~~increased inventory as a result~~inflationary cost increases and the impact of ~~restocking to normal levels~~foreign exchange rates of ~~demand following prior year shipping delays,~~$12.7 million, and our risk mitigation strategy to protect against potential, continued supply chain disruptions, and the reduction in accounts payable and accrued liabilities, due to the timing of payments. These increases were partially offset by a decreasean increase in cash and cash equivalents.

~~At March 31, 2022, cash and cash equivalents were $227.4 million. Based upon the current level of operations and anticipated growth, we~~We anticipate that existing cash balances (excluding certain amounts permanently invested in connection with foreign operations), cash expected to be generated by operations, and funds available under our ABL facility will be sufficient to fund our working capital ~~requirements, potential acquisitions, anticipated~~and capital ~~expenditures, including information technology upgrades and store remodels, and debt repayments~~expenditure requirements over the next twelve months. ~~We have continued~~

The change in net cash provided by operating activities for the three months ended December 31, 2022, compared to ~~focus~~the net cash used by operating activities three months ended December 31, 2021, was driven by the timing of inventory purchases, primarily from the impact of global supply chain issues in the prior year. Additionally, it was driven by the timing of income taxes and a decrease in net sales.

The decrease in net cash used by investing activities for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, was driven by fewer capital expenditures related to store improvements and information technology.

The decrease in net cash used by financing activities for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, was a result of share repurchases in the prior year and lower cash proceeds from employees exercising equity awards.

At December 31, 2022, we had $1,151.1 million in debt, not including capital leases, unamortized debt issuance costs and debt discounts, in the aggregate, of $3.7 million. Our debt consists of $680.0 million in 5.625% Senior Notes due 2025 (“2025 Senior Notes”) outstanding, $406.1 million remaining on ~~reducing~~ our ~~debt levels~~term loan and ~~shares~~$65.0 million in outstanding ~~through repurchases, while also being proactive in maintaining~~borrowings under our ~~financial flexibility.~~ABL facility.

We utilize our ABL facility for the issuance of letters of credit, certain working capital and liquidity needs, and to manage normal fluctuations in our operational cash flow. In that regard, we may from time to time draw funds under the ABL facility for general corporate purposes including funding of capital expenditures, acquisitions, ~~interest payments due on our indebtedness,~~ paying down other debt and share repurchases. During the six months ended March 31, 2022, we did not draw funds under our ABL facility. As of March 31, 2022, we had $481.1 million available for borrowings under our ABL facility, subject to borrowing base limitations, as reduced by outstanding letters of credit. Amounts

drawn on our ABL facility are generally paid down with cash provided by our operating activities.

During the ~~six~~three months ended ~~March~~December 31, 2022, ~~we repurchased 6.8 million shares of~~the weighted average interest rate on our common stock for $130.3 million with existing cash balances. As of March 31, 2022, we had authorization of approximately $595.8 million of additional potential share repurchases remaining under our share repurchase program.

~~Historically, our primary source of cash has been net funds provided by operating activities and, when necessary,~~ borrowings under ~~our~~the ABL ~~facility. Historically, the primary uses of cash have been for share repurchases, capital expenditures, repayments and servicing of long-term debt and acquisitions.~~

~~The $134.3 million decrease in operating activities~~facility was driven by the reduction in accounts payable and accrued liabilities primarily due to the timing of payments, partially offset by lower inventory purchases compared to the six months ended March 31, 2021 and an increase in net earnings.

Net cash used by investing activities during the six months ended March 31, 2022, increased $15.1 million to $44.4 million, compared to the six months ended March 31, 2021. This change was primarily a result of additional investments in information technology and store improvements.

Net cash used by financing activities for the six months ended March 31, 2022, decreased $84.7 million to $126.5 million, as a result of the debt pay-down during the six months ended March 31, 2021 and an increase in stock options exercised, partially offset by share repurchases during the six months ended March 31, 2022.

At March 31, 2022, we had $1,390.2 million in debt, not including capital leases, unamortized debt issuance costs and debt discounts, in the aggregate, of $8.6 million. Our debt consisted of $980.0 million of senior notes outstanding and a term loan with an outstanding principal balance of $410.3 million. As of March 31, 2022, there were no outstanding borrowings under our ABL facility.

We are currently in compliance with the agreements and instruments governing our debt, including our financial covenants.

~~We currently have~~ ~~5.625%~~Our 2025 Senior Notes ~~due 2025 outstanding. These notes~~ were issued by our wholly-owned subsidiaries, Sally Holdings LLC and Sally Capital Inc. (the “Issuers”)~~, and registered with the Securities and Exchange Commission under a shelf registration statement.~~

. The notes are unsecured debt instruments guaranteed by us and certain of our wholly-owned domestic subsidiaries (together, the “Guarantors”) and have certain restrictions on the ability to pay restrictive payments to Sally Beauty. The guarantees are joint and several, and full and unconditional. Certain other subsidiaries, including our foreign subsidiaries, do not serve as guarantors.

The following summarized consolidating financial information represents financial information for the Issuers and the Guarantors on a combined basis. All transactions and intercompany balances between these combined entities has been eliminated.

The following table presents the summarized balance sheets information for the Issuers and the Guarantors as of ~~March~~December 31, 2022, and September 30, ~~2021 (in thousands):~~2022:

	March 31, 2022		September 30, 2021
(in thousands)					December 31, 2022		September 30, 2022
Inventory	$	735,272	$	662,802	$	742,642	$	714,477
Intercompany receivable	$	-	$	67,337	$	394	$	—
Current assets	$	976,855	$	1,069,266	$	882,858	$	827,155
Total assets	$	2,098,588	$	2,198,990	$	2,032,279	$	1,982,982
Current liabilities					$	550,883	$	549,415
Intercompany payable	$	13,531	$	-	$	—	$	4,431
Current liabilities	$	331,459	$	422,137
Total liabilities	$	2,258,947	$	2,343,946	$	2,084,606	$	2,085,169

The following table presents the summarized statement of ~~income~~earnings information for ~~six~~the Issuers and the Guarantors for three months ended ~~March~~December 31, 2022 (in thousands):

Net sales	$	1,532,316	$	775,768
Gross profit	$	787,970	$	399,794
Earnings before provision for income taxes	$	132,691	$	52,383
Net Earnings	$	98,176	$	38,413

Under our current share repurchase program, we may from time-to-time repurchase our common stock on the open market. During the three months ended December 31, 2022, no shares were repurchased in connection with our share repurchase program. During three months ended December 31, 2021, we repurchased 3.7 million shares of our common stock for $75.0 million under our share repurchase program. See Note 5, Stockholders’ Equity, for more information about our share repurchase program.

There have been no material changes outside the ordinary course of our business in any of our contractual obligations since September 30, ~~2021.~~2022.

At ~~March~~December 31, 2022 and September 30, ~~2021,~~2022, we had no off-balance sheet financing arrangements other than outstanding letters of credit related to inventory purchases and self-insurance programs.

There have been no material changes to our critical accounting estimates or assumptions since September 30, ~~2021.~~2022.

There have been no recent accounting pronouncements issued that will have a material impact to our business.

As a multinational corporation, we are subject to certain market risks including foreign currency fluctuations, interest rates and government actions. There have been no material changes to our market risks from September 30, ~~2021.~~2022. See our disclosures about

market risks contained in Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in Part II of our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022.

Controls Evaluation and Related CEO and CFO Certifications. Our management, with the participation of our principal executive officer (“CEO”) and principal financial officer (“CFO”), conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of ~~March~~December 31, 2022. The controls evaluation was conducted by our Disclosure Committee, comprised of senior representatives from our finance, accounting, internal audit, and legal departments under the supervision of our CEO and CFO.

Certifications of our CEO and our CFO, which are required in accordance with Rule 13a-14 of the Exchange Act, are attached as exhibits to this Quarterly Report. This “Controls and Procedures” section includes the information concerning the controls evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Limitations on the Effectiveness of Controls. We do not expect that our disclosure controls and procedures will prevent all errors and all fraud. A system of controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Because of the limitations in all such systems, no evaluation can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Furthermore, the design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how unlikely. Because of these inherent limitations in a cost-effective system of controls and procedures, misstatements or omissions due to error or fraud may occur and not be detected.

Scope of the Controls Evaluation. The evaluation of our disclosure controls and procedures included a review of their objectives and design, our implementation of the controls and procedures and the effect of the controls and procedures on the information generated for use in this Quarterly Report. In the course of the evaluation, we sought to identify whether we had any data errors, control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, was being undertaken if needed. This type of evaluation is performed on a quarterly basis so that conclusions concerning the effectiveness of our disclosure controls and procedures can be reported in our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K. Many of the components of our disclosure controls and procedures are also evaluated by our internal audit department, by our legal department and by personnel in our finance organization. The overall goals of these various evaluation activities are to monitor our disclosure controls and procedures on an ongoing basis and to maintain them as dynamic systems that change as conditions warrant.

Conclusions regarding Disclosure Controls. Based on the required evaluation of our disclosure controls and procedures, our CEO and CFO have concluded that, as of ~~March~~December 31, 2022, we maintain disclosure controls and procedures that are effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. During our most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are involved, from time to time, in various claims and lawsuits incidental to the conduct of our business in the ordinary course. We carry insurance coverage in such amounts in excess of our self-insured retention as we believe to be reasonable under the circumstances and that may or may not cover any or all of our liabilities in respect of these matters. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, cash flows or results of operations.

We are subject to a number of U.S., federal, state and local laws and regulations, as well as the laws and regulations applicable in each foreign country or jurisdiction in which we do business. These laws and regulations govern, among other things, the composition, packaging, labeling and safety of the products we sell, the methods we use to sell these products and the methods we use to import these products. We believe that we are in material compliance with such laws and regulations, although no assurance can be provided that this will remain true going forward.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors contained in Item 1A. “Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021,~~2022, which could materially affect our business, financial condition or future results. There have been no material changes from the risk factors disclosed in such Annual Report. The risks described in such Annual Report and herein are not the only risks facing our company.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		36-2257936
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3001 Colorado Boulevard
Denton, Texas		76210
(Address of principal executive offices)		(Zip Code)

	Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements	4

Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of Earnings	5
Condensed Consolidated Statements of Comprehensive Income	6
Condensed Consolidated Statements of Stockholders’ Equity	7
Condensed Consolidated Statements of Cash Flows	8
Notes to Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	1516
Item 3. Quantitative And Qualitative Disclosures About Market Risk	2122
Item 4. Controls And Procedures	22

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	23
Item 1A. Risk Factors	23
~~Item 2.Unregistered Sales Of Equity Securities And Use Of Proceeds~~	23
Item 6. Exhibits	24

	Foreign Currency Translation Adjustments			Interest Rate Caps			Foreign Exchange Contracts			Total
Balance at September 30, 2021	$	(92,154	)	$	(2,085	)	$	(402	)	$	(94,641	)
Other comprehensive loss before reclassification, net of tax		(7,261	)		(114	)		(212	)		(7,587	)
Reclassification to net earnings, net of tax		—			392			368			760
Balance at March 31, 2022	$	(99,415	)	$	(1,807	)	$	(246	)	$	(101,468	)

	Foreign Currency Translation Adjustments			Interest Rate Caps		Foreign Exchange Contracts			Total
Balance at September 30, 2022	$	(153,128	)	$	1,960	$	(679	)	$	(151,847	)
Other comprehensive income (loss) before reclassification, net of tax		25,941			155		(608	)		25,488
Reclassification to net earnings, net of tax		—			48		(302	)		(254	)
Balance at December 31, 2022	$	(127,187	)	$	2,163	$	(1,589	)	$	(126,613	)

(in thousands)	Liability at September 30, 2022		SBS Expense		BSG Expense		Cash Payments			Non-Cash Amounts			Liability at December 31, 2022
Closing costs - leases ^(a)	$	—	$	4,738	$	132	$	—		$	(868	)	$	4,002
Closing costs - payroll expenses ^(b)		—		988		961		—			—			1,949
Impairment - property and equipment ^(c)		—		1,069		610		—			(1,679	)		—
Inventory transfer costs		—		1,128		204		(294	)		—			1,038
Impairment - operating lease assets ^(c)		—		345		83		—			(428	)		—
Other		1,291		102		46		(1,351	)		—			88
Total	$	1,291	$	8,370	$	2,036	$	(1,645	)	$	(2,975	)	$	7,077


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☒		Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐		Emerging growth company	☐

Notional Currency	Notional Amount
British Pound	$	87,321
Canadian Dollar		56,329
Euro		56,269
Mexican Peso		23,865
Total	$	223,784


	•	Enhancing our customer centricity;
	•	Growing high margin owned brands at Sally Beauty and amplifying innovation; and

Comparable sales	$	20,704
Sales outside comparable sales ^(a)		(18,791	)
Foreign currency exchange		(4,932	)
Total	$	(3,019	)

Comparable sales	$	36,394
Sales outside comparable sales ^(a)		(5,283	)
Foreign currency exchange		1,196
Total	$	32,307

Fiscal Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - January 30, 2022		-	$	-		-	$	651,120,625
February 1 - February 28, 2022		2,234,514		17.68		2,234,514		611,606,688
March 1 - March 31, 2022		922,460		17.14		922,460		595,792,425
Total this quarter		3,156,974	$	17.53		3,156,974	$	595,792,425

Exhibit No.		Description

3.1		Third Restated Certificate of Incorporation of Sally Beauty Holdings, Inc., dated January 30, 2014, which is incorporated herein by reference from Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on January 30, 2014

3.2		Amended and Restated Bylaws of Sally Beauty Holdings, Inc., dated April 26, 2017, which is incorporated herein by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 28, 2017

22		List of Subsidiary Guarantors*

31.1		Rule 13a-14(a)/15d-14(a) Certification of Denise Paulonis*

31.2		Rule 13a-14(a)/15d-14(a) Certification of Marlo M. Cormier*

32.1		Section 1350 Certification of Denise Paulonis*

32.2		Section 1350 Certification of Marlo M. Cormier*

101		The following financial information from our Quarterly Report on Form 10-Q for the fiscal quarter ended ~~March~~December 31, 2022, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Earnings; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Stockholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to Condensed Consolidated Financial Statements.

104		The cover page from our Quarterly Report on Form 10-Q for the fiscal quarter ended ~~March~~December 31, 2022, formatted in Inline XBRL (contained in Exhibit 101).

		SALLY BEAUTY HOLDINGS, INC.
		(Registrant)

Date: ~~May 5, 2022~~February 2, 2023

	By:	/s/ Marlo M. Cormier
		Marlo M. Cormier
		Senior Vice President, Chief Financial Officer
		For the Registrant and as its Principal Financial Officer