Sally Beauty (SBH) 10-Q 2 Feb 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2016	Jan. 27, 2017
Document and Entity Information
Entity Registrant Name	Sally Beauty Holdings, Inc.
Entity Central Index Key	1,368,458
Document Type	10-Q
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		142,556,170
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Consolidated Statements of Earn

Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Earnings
Net sales	$ 999,609	$ 998,032
Cost of products sold and distribution expenses	507,901	503,983
Gross profit	491,708	494,049
Selling, general and administrative expenses	347,412	339,728
Depreciation and amortization	26,839	23,386
Operating earnings	117,457	130,935
Interest expense	26,799	63,943
Earnings before provision for income taxes	90,658	66,992
Provision for income taxes	34,832	24,749
Net earnings	$ 55,826	$ 42,243
Earnings per share:
Basic (in dollars per share)	$ 0.39	$ 0.28
Diluted (in dollars per share)	$ 0.39	$ 0.28
Weighted average shares:
Basic (in shares)	143,631	150,786
Diluted (in shares)	144,860	152,426

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Comprehensive Income
Net earnings	$ 55,826	$ 42,243
Other comprehensive loss:
Foreign currency translation adjustments	(18,668)	(10,221)
Total other comprehensive loss, before tax	(18,668)	(10,221)
Other comprehensive loss, net of tax	(18,668)	(10,221)
Total comprehensive income	$ 37,158	$ 32,022

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Current assets:
Cash and cash equivalents	$ 94,410	$ 86,622
Trade accounts receivable, less allowance for doubtful accounts of $1,344 at December 31, 2016 and $1,407 at September 30, 2016	43,755	46,942
Accounts receivable, other	34,926	37,041
Inventory	907,833	907,337
Other current assets	42,007	54,861
Deferred income tax assets	39,990	40,024
Total current assets	1,162,921	1,172,827
Property and equipment, net of accumulated depreciation of $480,048 at December 31, 2016 and $467,865 at September 30, 2016	318,260	319,558
Goodwill	527,751	532,714
Intangible assets, excluding goodwill, net of accumulated amortization of $113,334 at December 31, 2016 and $110,713 at September 30, 2016	87,639	92,963
Other assets	13,288	14,001
Total assets	2,109,859	2,132,063
Current liabilities:
Current maturities of long-term debt	678	716
Accounts payable	279,635	271,376
Accrued liabilities	180,859	214,584
Income taxes payable	14,325	1,989
Total current liabilities	475,497	488,665
Long-term debt	1,783,609	1,783,294
Other liabilities	20,976	21,614
Deferred income tax liabilities, net	118,753	114,656
Total liabilities	2,398,835	2,408,229
Stockholders' deficit:
Common stock, $0.01 par value. Authorized 500,000 shares;142,983 and 144,842 shares issued and 142,716 and 144,571 shares outstanding at December 31, 2016 and September 30, 2016, respectively	1,427	1,446
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued
Accumulated deficit	(171,684)	(177,561)
Accumulated other comprehensive loss, net of tax	(118,719)	(100,051)
Total stockholders' deficit	(288,976)	(276,166)
Total liabilities and stockholders' deficit	$ 2,109,859	$ 2,132,063

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Consolidated Balance Sheets
Trade accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,344	$ 1,407
Property and equipment, accumulated depreciation (in dollars)	480,048	467,865
Intangible assets, excluding goodwill, accumulated amortization (in dollars)	$ 113,334	$ 110,713
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, Authorized shares	500,000	500,000
Common stock, shares issued	142,983	144,842
Common stock, shares outstanding	142,716	144,571
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, Authorized shares	50,000	50,000
Preferred stock, shares issued	0	0

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Cash Flows from Operating Activities:
Net earnings	$ 55,826	$ 42,243
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	26,839	23,386
Share-based compensation expense	3,814	4,188
Amortization of deferred financing costs	789	907
Excess tax benefit/shortfall from share-based compensation	879	(95)
Loss on extinguishment of debt		33,296
Deferred income taxes	3,000	11,991
Changes in (exclusive of effects of acquisitions):
Trade accounts receivable	2,181	3,676
Accounts receivable, other	1,727	5,710
Inventory	(9,358)	(31,818)
Other current assets	12,255	1,111
Other assets	(592)	(455)
Accounts payable and accrued liabilities	(19,595)	(30,343)
Income taxes payable	13,151	4,265
Other liabilities	(463)	1,067
Net cash provided by operating activities	90,453	69,129
Cash Flows from Investing Activities:
Capital expenditures	(28,008)	(40,575)
Acquisitions, net of cash acquired		(2,250)
Net cash used by investing activities	(28,008)	(42,825)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	58,500	800,000
Repayments of long-term debt	(58,674)	(825,971)
Repurchases of common stock	(66,963)	(62,367)
Debt issuance costs		(12,709)
Proceeds from exercises of stock options	14,280	2,716
Excess tax benefit/shortfall from share-based compensation	(879)	95
Net cash used by financing activities	(53,736)	(98,236)
Effect of foreign exchange rate changes on cash and cash equivalents	(921)	(659)
Net increase (decrease) in cash and cash equivalents	7,788	(72,591)
Cash and cash equivalents, beginning of period	86,622	140,038
Cash and cash equivalents, end of period	94,410	67,447
Supplemental Cash Flow Information:
Interest paid	51,451	86,633	[1]
Income taxes paid	3,882	4,833
Capital expenditures incurred but not paid	$ 1,672	$ 3,343
[1]	For the three months ended December 31, 2015, interest paid includes $25.8 million in call premiums paid in connection with the Company’s December 2015 redemption in full of its senior notes due 2019.

Consolidated Statements of Cas7

Consolidated Statements of Cash Flows (Parenthetical) $ in Millions	3 Months Ended
	Dec. 31, 2015USD ($)
Senior notes due Nov. 2019
Consolidated Statements of Cash Flows (Parenthetical)
Call premiums paid upon the redemption of certain notes	$ 25.8

Description of Business and Bas

Description of Business and Basis of Presentation	3 Months Ended
	Dec. 31, 2016
Description of Business and Basis of Presentation
Description of Business and Basis of Presentation	1. Description of Business and Basis of Presentation Description of Business Sally Beauty Holdings, Inc. and its consolidated subsidiaries (“Sally Beauty” or “the Company”) sell professional beauty supplies through its Sally Beauty Supply retail store operations in the U.S., Puerto Rico, Canada, Mexico, Chile, Colombia, Peru, the United Kingdom, Ireland, Belgium, France, Germany, the Netherlands and Spain. Additionally, the Company distributes professional beauty products to salons and salon professionals through its Beauty Systems Group (“BSG”) store operations and a commissioned direct sales force that calls on salons in the U.S. and Canada, and to franchises in the southern and southwestern regions of the U.S. and in Mexico through the operations of its subsidiary Armstrong McCall, L.P. (“Armstrong McCall”). A significant number of the Company’s products are also available through a number of Sally Beauty Supply and BSG-operated websites. Certain beauty products sold by BSG and Armstrong McCall are sold under exclusive territory agreements with the manufacturers of the products. Basis of Presentation The accompanying consolidated interim financial statements include the accounts of the Company. All significant inter-company accounts and transactions have been eliminated in consolidation. In the opinion of management, these consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the Company’s consolidated financial position as of December 31, 2016 and September 30, 2016, and its consolidated results of operations and consolidated cash flows for the three months ended December 31, 2016 and 2015. Certain amounts for the prior fiscal period have been reclassified to conform to the current fiscal period presentation. All references in these notes to “management” are to the management of Sally Beauty.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Dec. 31, 2016
Significant Accounting Policies
Significant Accounting Policies	2. Significant Accounting Policies The consolidated interim financial statements included herein are unaudited and have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016. The Company adheres to the same accounting policies in the preparation of its interim financial statements as it adheres to in the preparation of its full-year financial statements. As permitted under GAAP, interim accounting for certain expenses, including income taxes, is based on full-year assumptions. Such amounts are expensed in full in the year incurred. For interim financial reporting purposes, income taxes are recorded based upon estimated annual effective income tax rates. The results of operations for the interim periods reported upon herein are not necessarily indicative of the results that may be expected for any future interim period or the entire fiscal year.

Recent Accounting Pronouncement

Recent Accounting Pronouncements and Accounting Changes	3 Months Ended
	Dec. 31, 2016
Recent Accounting Pronouncements and Accounting Changes
Recent Accounting Pronouncements and Accounting Changes	3. Recent Accounting Pronouncements and Accounting Changes Recent Accounting Pronouncements The Company has not yet adopted and is currently assessing the potential effect of the following pronouncements on its consolidated financial statements: In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Income Taxes (“ASU 2015-17”) which aims to simplify the classification of deferred taxes on the balance sheet. More specifically, ASU 2015-17 will require that all deferred tax assets and liabilities, and any related valuation allowance, be reported as noncurrent in a classified balance sheet. The new guidance will replace the existing practice of reporting deferred taxes for each tax jurisdiction (or taxing component of a jurisdiction) as (a) a net current asset or liability and (b) a net noncurrent asset or liability. The new guidance does not change the existing requirement that only permits offsetting assets and liabilities within the same jurisdiction. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. In February 2016, the FASB issued ASU No. 2016-02, Leases , which will require lessees to report on their balance sheets a right-of-use asset and a lease liability in connection with most lease agreements classified as operating leases under the current guidance. The lease liability will be measured initially based on the present value of future lease payments, subject to certain conditions. The right-of-use asset will be measured initially based on the amount of the liability, plus certain initial direct costs. The new guidance will further require that leases be classified at inception as either (a) operating leases or (b) finance leases. For operating leases, periodic expense will generally be flat (straight-line) throughout the life of the lease. For finance leases, periodic expense will decline (similar to capital leases under current rules) over the life of the lease. The new standard must be adopted using a modified retrospective transition method. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , intended to simplify various aspects of how share-based payments are recorded and presented on the financial statements. For example, the new guidance will require that all the income tax effect related to share-based payments be recorded in income tax expense. The new guidance further removes the current requirement to delay recognition of a windfall tax benefit until it reduces current taxes payable. In addition, the new standard will require that excess tax benefits and shortfalls from share-based compensation awards be reported as operating activities in the statement of cash flows. For public companies, these amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. In addition, the Company has not yet adopted the following recent accounting pronouncements and does not believe, based on its preliminary assessment, that their adoption will have a material effect on its consolidated financial statements: In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers which will supersede Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition . In August 2015, the FASB deferred the effective date of this new standard by one year. A core principle of the new guidance is that an entity should measure revenue in connection with its sale of goods and services to a customer based on an amount that depicts the consideration to which the entity expects to be entitled in exchange for each of those goods and services. For a contract that involves more than one performance obligation, the entity must (a) determine or, if necessary, estimate the standalone selling price at inception of the contract for the distinct goods or services underlying each performance obligation and (b) allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices. In addition, under the new guidance, an entity should recognize revenue when (or as) it satisfies each performance obligation under the contract by transferring the promised good or service to the customer. A good or service is deemed transferred when (or as) the customer obtains control of that good or service. The new standard permits the use of either the retrospective or cumulative effect transition method. For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted, but no earlier than December 16, 2016. The Company has not yet selected a transition method. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01, which must be applied prospectively, provides a narrower framework to be used to determine if a set of assets and activities constitutes a business than under current guidance and is generally expected to result in greater consistency in the application of ASC Topic 805, Business Combinations . For public companies, this amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted under certain conditions. Accounting Changes In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in Cloud Computing Arrangement . This pronouncement provides guidance to determine whether a cloud-based computing arrangement includes a software license. If a cloud-based computing arrangement includes a software license, the customer must account for the software element of the arrangement consistent with the acquisition of other software licenses. Otherwise, the customer must account for the arrangement as a service contract. The new standard permits the use of either the prospective or retrospective transition method. As required, the Company adopted the provisions of ASU No. 2015-05, prospectively, in the first quarter of its fiscal year ending September 30, 2017 and its adoption did not have a material impact on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”) which eliminates the prior requirement to recognize measurement-period adjustments to provisional amounts retrospectively. Instead, ASU 2015-16 requires the acquirer to recognize measurement-period adjustments, as well as the impact on earnings of changes in depreciation, amortization and similar items (if any) resulting from the change to the provisional amounts, in the period when the amount of each measurement-period adjustment is determined. As required, the Company adopted the provisions of ASU 2015-16 in the first quarter of its fiscal year ending September 30, 2017 and its adoption did not have a material impact on the Company’s consolidated financial statements.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Dec. 31, 2016
Fair Value Measurements
Fair Value Measurements	4. Fair Value Measurements The Company’s financial instruments consist of cash equivalents, trade and other accounts receivable, accounts payable, foreign currency derivative instruments and debt. The carrying amounts of cash equivalents, trade and other accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. The Company measures on a recurring basis and discloses the fair value of its financial instruments under the provisions of ASC Topic 820, Fair Value Measurement , as amended (“ASC 820”). The Company defines “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. The three levels of that hierarchy are defined as follows: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data; and Level 3 - Unobservable inputs for the asset or liability. Consistent with this hierarchy, the Company categorized certain of its financial assets and liabilities as follows at December 31, 2016 and September 30, 2016 (in thousands): As of December 31, 2016 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (a) $ $ — $ $ — Total assets $ $ — $ $ — Liabilities Long-term debt (b) $ $ $ $ — Foreign exchange contracts (a) — — Total liabilities $ $ $ $ — As of September 30, 2016 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (a) $ — $ — $ — $ — Total assets $ — $ — $ — $ — Liabilities Long-term debt (b) $ $ $ $ — Foreign exchange contracts (a) — — Total liabilities $ $ $ $ — (a) Foreign exchange contracts (including foreign currency forwards and options) are valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market foreign currency exchange rates. Please see Note 10 for more information about the Company’s foreign exchange contracts. (b) Long-term debt (including current maturities and borrowings under the ABL facility, if any) is carried in the Company’s consolidated financial statements at amortized cost of $1,807.1 million at December 31, 2016 and $1,807.7 million at September 30, 2016, less unamortized debt issuance costs of $22.9 million at December 31, 2016 and $23.7 million at September 30, 2016. The Company’s senior notes are valued for purposes of this disclosure using unadjusted quoted market prices for such debt securities. Other long-term debt (consisting primarily of borrowings under the ABL facility, if any, and capital lease obligations) is generally valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Please see Note 9 for more information about the Company’s debt.

Accumulated Stockholders' Defic

Accumulated Stockholders' Deficit	3 Months Ended
	Dec. 31, 2016
Accumulated Stockholders' Deficit
Accumulated Stockholders' Deficit	5. Accumulated Stockholders’ Deficit In August 2014, the Company announced that its Board of Directors approved a share repurchase program authorizing it to repurchase up to $1.0 billion of its common stock over an approximate three-year period expiring on September 30, 2017 (the “2014 Share Repurchase Program”). During the three months ended December 31, 2016 and 2015, the Company repurchased and subsequently retired approximately 2.5 million and 2.4 million shares, respectively, of its common stock under the 2014 Share Repurchase Program at an aggregate cost of $67.0 million and $62.4 million, respectively. The Company funded these share repurchases with existing cash balances, cash from operations and borrowings under the ABL facility. The Company reduced common stock and additional paid-in capital, in the aggregate, by these amounts. However, as required by GAAP, to the extent that share repurchase amounts exceeded the balance of additional paid-in capital prior to the Company recording such repurchases, the Company recorded the excess in accumulated deficit. At December 31, 2016 and September 30, 2016, accumulated other comprehensive loss consists of cumulative foreign currency translation adjustments of $118.7 million and $100.1 million, respectively, net of income taxes of $2.3 million at both dates. Comprehensive income (loss) reflects changes in accumulated stockholders’ deficit from sources other than transactions with stockholders and, as such, includes net earnings and certain other specified components. Currently, the Company’s only component of comprehensive income, other than net earnings, is foreign currency translation adjustments, net of income tax.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Dec. 31, 2016
Earnings Per Share
Earnings Per Share	6. Earnings Per Share Basic earnings per share is calculated by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated similarly, but includes the potential dilution from the exercise of all outstanding stock options and stock awards, except when the effect would be anti-dilutive. The following table sets forth the computations of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended 2016 2015 Net earnings $ $ Weighted average basic shares Dilutive securities: Stock option and stock award programs Weighted average diluted shares Earnings per share: Basic $ $ Diluted $ $ At December 31, 2016 and 2015, options to purchase 2,457,972 shares and 3,878,836 shares, respectively, of the Company’s common stock were outstanding but not included in the computations of diluted earnings per share since these options were anti-dilutive. An anti-dilutive option is an option that is: (a) out-of-the-money (an option with an exercise price which is greater than the average price per share of the Company’s common stock during the period), or (b) in-the-money (an option with an exercise price which is less than the average price per share of the Company’s common stock during the period) for which the sum of assumed proceeds, including any unrecognized compensation expense related to such option, exceeds the average market value per share for the period.

Share-Based Payments

Share-Based Payments	3 Months Ended
	Dec. 31, 2016
Share-Based Payments
Share-Based Payments	7. Share-Based Payments The Company from time to time may grant performance-based awards and service-based awards to its employees under the Sally Beauty Holdings, Inc. Amended and Restated 2010 Omnibus Incentive Plan (the “2010 Plan”), a stockholder-approved share-based compensation plan that allows for the issuance of up to 29.8 million shares of the Company’s common stock. The following table presents the total compensation cost charged against income and included in selling, general and administrative expenses for all share-based compensation arrangements, and the related tax benefits recognized in our consolidated statements of earnings (in thousands): Three Months Ended 2016 2015 Share-based compensation expense $ $ Income tax benefit related to share-based compensation expense $ $ Performance-Based Awards The Company from time to time grants performance-based restricted stock units (“Performance Units”) pursuant to the 2010 Plan. The Company’s Performance Units represent unsecured obligations of the Company to issue shares of its common stock. The number of shares, if any, which will be issued in connection with these awards, is contingent upon both (a) employee service conditions and (b) the Company’s level of achievement with respect to specified performance targets. The Company measures the cost of services received from employees in exchange for an award of Performance Units based on the fair value of the award on the date of grant and it recognizes expense over the requisite service period (generally three years). The fair value of a Performance Unit is determined based on the closing market price of the Company’s common stock on the date of grant. During the three months ended December 31, 2016 and 2015, the Company granted approximately 146,000 and 152,000 Performance Units (“target shares”), respectively, to its employees. Under the terms of these awards, a grantee may earn from 0% to 200% of his or her target shares, with the ultimate number of units earned upon settlement (and expense recognized) dependent on the Company’s level of achievement with respect to certain specified cumulative performance targets during the three-year period specified in each award (the “Performance Period”) and satisfaction of the employee service condition. Periodic expense for Performance Unit awards, which is estimated quarterly, is based on the Company’s projected performance during the Performance Period compared to the performance targets contained in the award. As such, for the three months ended December 31, 2016, the Company has estimated and recognized compensation expense for each award at 100% of the performance targets since it believes achievement of that percentage of the performance targets is probable. To date, the Company has only granted Performance Units subject to the Company’s achievement of two performance targets: consolidated sales growth (as defined in the award documents) and return on invested capital (as defined in the award documents), in addition to service conditions. The following table presents a summary of the activity for the Company’s Performance Unit awards for the three months ended December 31, 2016: Performance Unit Awards Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 $ Granted Vested — — Forfeited ) Unvested at December 31, 2016 $ At December 31, 2016, unrecognized compensation costs related to unvested performance unit awards are approximately $4.8 million and are expected to be recognized over the weighted average period of 2.4 years. Service-Based Awards The Company measures the cost of services received from employees and directors in exchange for a service-based award of equity instruments based on the fair value of the award on the date of grant, and recognizes compensation expense on a straight-line basis over the vesting period or over the period ending on the date a participant becomes eligible for retirement, if earlier. The Company granted approximately 1.5 million and 1.4 million service-based stock options and approximately 22,000 and 23,000 service-based restricted share awards to its employees during the three months ended December 31, 2016 and 2015, respectively. Upon issuance of such grants, the Company recognized accelerated share-based compensation expense of $1.1 million and $1.3 million in the three months ended December 31, 2016 and 2015, respectively, in connection with employees eligible to continue vesting awards upon retirement (“retirement-eligible employees”) under the provisions of the 2010 Plan. In addition, the Company granted approximately 39,000 and 26,000 service-based restricted stock units to its non-employee directors during the three months ended December 31, 2016 and 2015, respectively. Stock Option Awards Each option has an exercise price equal to the closing market price of the Company’s common stock on the date of grant and generally has a maximum term of 10 years. Options generally vest ratably over a three or four year period and are generally subject to forfeiture until the vesting period is complete, subject to certain retirement provisions contained in the 2010 Plan. The following table presents a summary of the activity for the Company’s service-based stock option awards for the three months ended December 31, 2016: Number of Weighted Weighted Aggregate Outstanding at September 30, 2016 $ $ Granted Exercised ) Forfeited or expired ) Outstanding at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $ The following table summarizes additional information about service-based stock options outstanding at December 31, 2016 under the Company’s share-based compensation plans: Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $ 5.24 – 19.99 $ $ $ 20.00 – 24.99 $ 25.00 – 31.58 Total $ $ The Company uses the Black-Scholes option pricing model to value the Company’s stock options for each stock option award. Using the Black-Scholes model, the fair value of each stock option award is estimated on the date of grant. The fair value of the Company’s stock option awards is expensed on a straight-line basis over the vesting period (generally three or four years) of the stock options or to the date a participant becomes retirement-eligible, if earlier. The weighted average assumptions relating to the valuation of the Company’s stock options are as follows: Three months ended 2016 2015 Expected life (in years) Expected volatility for the Company’s common stock % % Risk-free interest rate % % Dividend yield % % The expected life of options represents the period of time that the options granted are expected to be outstanding and is based on historical experience of employees of the Company who have been granted stock options. The risk-free interest rate is based on the zero-coupon U.S. Treasury notes with a comparable term as of the date of the grant. Since the Company does not currently expect to pay dividends, the dividend yield used is 0%. The weighted average fair value at the date of grant of the stock options issued by the Company in the three months ended December 31, 2016 and 2015 was $6.37 and $6.27 per option, respectively. The total intrinsic value of options exercised during the three months ended December 31, 2016 was $4.2 million. The cash proceeds from these option exercises were $14.3 million and the tax benefit realized from these option exercises was $1.6 million. At December 31, 2016, unrecognized compensation costs related to unvested stock option awards are approximately $14.3 million and are expected to be recognized over the weighted average period of 2.2 years. Restricted Stock Awards The Company from time to time grants service-based restricted stock awards to employees under the 2010 Plan. A restricted stock award is an award of shares of the Company’s common stock (which have full voting and dividend rights but are restricted with regard to sale or transfer), the restrictions over which lapse ratably over a specified period of time (generally three to five years). Restricted stock awards are independent of stock option grants and are generally subject to forfeiture if employment terminates prior to these restrictions lapsing, subject to certain retirement provisions of the 2010 Plan. The fair value of the Company’s restricted stock awards is expensed on a straight-line basis over the period (generally three to five years) in which the restrictions on these stock awards lapse (“vesting”) or over the period ending on the date a participant becomes retirement-eligible, if earlier. The fair value of a service-based restricted stock award is determined based on the closing market price of the Company’s common stock on the date of grant. The following table presents a summary of the activity for the Company’s service-based restricted stock awards for the three months ended December 31, 2016: Restricted Stock Awards Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 $ Granted Vested ) Forfeited ) Unvested at December 31, 2016 $ At December 31, 2016, unrecognized compensation costs related to unvested restricted stock awards are approximately $3.0 million and are expected to be recognized over the weighted average period of 1.8 years. Restricted Stock Units The Company from time to time grants service-based restricted stock unit (“RSU” or “RSUs”) awards, which generally vest within one year from the date of grant, pursuant to the 2010 Plan. To date, the Company has only granted service-based RSU awards to its non-employee directors. RSUs represent an unsecured promise of the Company to issue shares of the Company’s common stock. Unless forfeited prior to the vesting date, RSUs are converted into shares of the Company’s common stock generally on the vesting date. An independent director who receives an RSU award may elect, upon receipt of such award, to defer until a later date delivery of the shares of common stock of the Company that would otherwise be issued to such director on the vesting date. RSUs granted prior to the fiscal year 2012 are generally retained by the Company as deferred stock units that are not settled until six months after the independent director’s service as a director terminates. RSUs are independent of stock option grants and are generally subject to forfeiture if service terminates prior to the vesting of the units. Participants have no voting rights with respect to unvested RSUs. Under the 2010 Plan, the Company may settle the vested deferred stock units with shares of the Company’s common stock or in cash. The Company expenses the cost of a service-based RSU, which is determined to be the fair value of the RSU at the date of grant, on a straight-line basis over the vesting period (generally one year). For these purposes, the fair value of the RSU is determined based on the closing market price of the Company’s common stock on the date of grant. The following table presents a summary of the activity for the Company’s service-based RSUs for the three months ended December 31, 2016: Restricted Stock Units Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 — $ — — Granted Vested — — Forfeited — — Unvested at December 31, 2016 $ At December 31, 2016, unrecognized compensation costs related to unvested RSUs are approximately $0.8 million and are expected to be recognized over the weighted average period of 0.7 years.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Dec. 31, 2016
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies During the fiscal year 2014, the Company disclosed that it had experienced a data security incident (the “2014 data security incident”). During the fiscal year 2015, the Company disclosed that it had experienced a second data security incident (the “2015 data security incident” and, together with the 2014 data security incident, the “data security incidents”). The data security incidents involved the unauthorized installation of malicious software (malware) on our information technology systems, including our point-of-sale systems that the Company believes may have placed at risk certain payment card data for some transactions. The costs that the Company has incurred to date in connection with the data security incidents include assessments by payment card networks, professional advisory fees and legal fees relating to investigating and remediating the data security incidents. For the three months ended December 31, 2016 and 2015, selling, general and administrative expenses reflect expenses of $0.1 million and $0.5 million, respectively, consisting of expenses related to the data security incidents. As of December 31, 2016, the Company had an aggregate accrued liability relating to the data security incidents of $15.6 million, of which approximately $2.9 million relates to loss contingencies associated with the 2014 data security incident and approximately $12.8 million relates to loss contingencies associated with the 2015 data security incident. The Company’s estimated probable losses related to the claims made by the payment card networks in connection with the data security incidents are based on currently available information. The Company disputes the validity of these claims and intends to contest them. Estimates related to these claims may change as new information becomes available or circumstances change. The Company expects to incur additional costs and expenses related to the data security incidents in the future. These costs and expenses may result from potential additional liabilities to payment card networks, governmental or third party investigations, proceedings or litigation and legal and other fees necessary to defend against any potential liabilities or claims, and further investigatory and remediation costs. As of December 31, 2016, the scope of these additional costs and expenses, or a range thereof, cannot be reasonably estimated and, while we do not anticipate these additional costs and expenses or liabilities would have a material adverse impact on our business, financial condition and operating results, these additional costs and expenses could be significant.

Short-term Borrowings and Long-

Short-term Borrowings and Long-Term Debt	3 Months Ended
	Dec. 31, 2016
Short-term Borrowings and Long-Term Debt
Short-term Borrowings and Long-Term Debt	9. Short-term Borrowings and Long-term Debt Details of long-term debt as of December 31, 2016 and September 30, 2016 are as follows (dollars in thousands): December 31, September 30, Interest Rates(a) ABL facility(b) $ — $ — (i) Prime plus (0.50% to 0.75%) or; (ii) LIBOR(b) plus (1.50% to 1.75%) Senior notes due Jun. 2022 5.750% Senior notes due Nov. 2023 5.500% Senior notes due Dec. 2025 5.625% Total $ $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net(c) Total debt $ $ Less: current maturities Total long-term debt $ $ (a) Interest rates shown represent the coupon or contractual rate or rates related to each debt instrument listed. (b) When used in this Quarterly Report, LIBOR means the London Interbank Offered Rate. At December 31, 2016 and September 30, 2016, unamortized debt issuance costs of $1.4 million and $1.6 million, respectively, related to the ABL facility are reported in other assets in the Company’s consolidated balance sheets. (c) Amounts are net of unamortized premium of $5.3 million and $5.6 million as of December 31, 2016 and September 30, 2016, respectively, related to certain notes with an aggregate principal amount of $150.0 million of the senior notes due June 2022. Please see Note 13 of the “Notes to Consolidated Financial Statements” in “Item 8 - Financial Statements and Supplementary Data” contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2016 for more information about the Company’s debt obligations. The Company, through its subsidiary (Sally Holdings LLC, hereafter “Sally Holdings”) has a $500 million, five-year asset-based senior secured loan facility (the “ABL facility”), including a $25.0 million Canadian sub-facility for its Canadian operations. At December 31, 2016, there were no borrowings outstanding under the ABL facility and the Company had $480.0 million available for borrowing under the ABL facility, including the Canadian sub-facility. Borrowings under the ABL facility are secured by the accounts, inventory and credit card receivables (and related general intangibles and other property) of our domestic subsidiaries (and, in the case of borrowings under the Canadian sub-facility, such assets of our Canadian subsidiaries and, solely with respect to borrowings by SBH Finance B.V., intercompany notes owed to SBH Finance B.V. by our foreign subsidiaries). In the fiscal year 2016, Sally Holdings and Sally Capital Inc. (collectively, the “Issuers”), both indirectly wholly-owned subsidiaries of the Company, issued $750.0 million aggregate principal amount of their 5.625% Senior Notes due 2025 (the “senior notes due 2025”) at par. The Company used the net proceeds from this debt issuance (approximately $737.3 million) as well as cash from operations and borrowings under the ABL facility, to redeem in full $750.0 million aggregate principal amount of certain outstanding senior notes. In connection with such redemption, the Company recorded a loss on extinguishment of debt in the amount of approximately $33.3 million, including a redemption premium in the amount of approximately $25.8 million and unamortized deferred financing costs associated with the redeemed senior notes of approximately $7.5 million. In connection with the issuance of the senior notes due 2025, the Company incurred and capitalized financing costs of approximately $12.7 million. This amount is reported as a deduction from the senior notes due 2025 on the Company’s consolidated balance sheets and is being amortized over the term of the senior notes due 2025 using the effective interest method. The senior notes due 2022, the senior notes due 2023 and the senior notes due 2025, which the Company refers to collectively as “the Senior Notes” or “the senior notes due 2022, 2023 and 2025,” are unsecured obligations of the Issuers and are jointly and severally guaranteed by the Company and Sally Investment Holdings LLC (an indirect wholly-owned subsidiary of the Company, hereafter, “Sally Investment”), and by each material domestic subsidiary of the Company. Interest on the senior notes due 2022, 2023 and 2025 is payable semi-annually, during the Company’s first and third fiscal quarters. Please see Note 12 of the “Condensed Notes to Consolidated Financial Statements” contained elsewhere in this Quarterly Report for certain condensed financial statement data pertaining to Sally Beauty Holdings, Inc., the Issuers, the guarantor subsidiaries and the non-guarantor subsidiaries. Maturities of the Company’s long-term debt are as follows as of December 31, 2016 (in thousands): Twelve months ending December 31: 2017-2021 $ — Thereafter $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net Less: current maturities Total long-term debt $ We are a holding company and do not have any material assets or operations other than ownership of equity interests of our subsidiaries. The agreements and instruments governing the debt of Sally Holdings and its subsidiaries contain material limitations on their ability to pay dividends and other restricted payments to us which, in turn, constitute material limitations on our ability to pay dividends and other payments to our stockholders. The ABL facility does not contain any restriction against the incurrence of unsecured indebtedness. However, the ABL facility restricts the incurrence of secured indebtedness if, after giving effect to the incurrence of such secured indebtedness, the Company’s Secured Leverage Ratio exceeds 4.0 to 1.0. At December 31, 2016, the Company’s Secured Leverage Ratio was less than 0.1 to 1.0. Secured Leverage Ratio is defined as the ratio of (i) Secured Funded Indebtedness (as defined in the ABL facility) to (ii) Consolidated EBITDA (as defined in the ABL facility) for the most recently completed 12 fiscal months. The ABL facility is pre-payable and the commitments thereunder may be terminated, in whole or in part, at any time without penalty or premium. The indentures governing the senior notes due 2022, 2023 and 2025 contain terms that restrict the ability of Sally Beauty’s subsidiaries to incur additional indebtedness. However, in addition to certain other material exceptions, the Company may incur additional indebtedness under the indentures if its Consolidated Coverage Ratio, after giving pro forma effect to the incurrence of such indebtedness, exceeds 2.0 to 1.0 (“Incurrence Test”). At December 31, 2016, the Company’s Consolidated Coverage Ratio was approximately 6.1 to 1.0. Consolidated Coverage Ratio is defined as the ratio of (i) Consolidated EBITDA (as defined in the indentures) for the period containing the most recent four consecutive fiscal quarters, to (ii) Consolidated Interest Expense (as defined in the indentures) for such period. The indentures governing the senior notes due 2022, 2023 and 2025 restrict Sally Holdings and its subsidiaries from making certain dividends and distributions to equity holders and certain other restricted payments (hereafter, a “Restricted Payment” or “Restricted Payments”) to Sally Beauty Holdings, Inc. However, the indentures permit the making of such Restricted Payments if, at the time of the making of such Restricted Payment, the Company satisfies the Incurrence Test as described above and the cumulative amount of all Restricted Payments made since the issue date of the applicable senior notes does not exceed the sum of: (i) 50% of Sally Holdings’ and its subsidiaries’ cumulative consolidated net earnings since July 1, 2006 (for the senior notes due 2022 and the senior notes due 2023) or since October 1, 2015 (for the senior notes due 2025), plus (ii) the proceeds from the issuance of certain equity securities or conversions of indebtedness to equity, in each case, since the issue date of the applicable senior notes plus (iii) the net reduction in investments in unrestricted subsidiaries since the issue date of the applicable senior notes plus (iv) the return of capital with respect to any sales or dispositions of certain minority investments since the issue date of the applicable senior notes plus (v) $350 million (for the senior notes due 2025). Further, in addition to certain other baskets, the indentures permit the Company to make additional Restricted Payments in an unlimited amount if, after giving pro forma effect to the incurrence of any indebtedness to make such Restricted Payment, the Company’s Consolidated Total Leverage Ratio (as defined in the indentures) is less than 3.25 to 1.00. At December 31, 2016, the Company’s Consolidated Total Leverage Ratio was approximately 2.7 to 1.0. Consolidated Total Leverage Ratio is defined as the ratio of (i) Consolidated Total Indebtedness (as defined in the indentures) minus cash and cash equivalents on-hand up to $100.0 million, in each case, as of the end of the most recently-ended fiscal quarter to (ii) Consolidated EBITDA (as defined in the indentures) for the period containing the most recent four consecutive fiscal quarters. The ABL facility also restricts the making of Restricted Payments. More specifically, under the ABL facility, Sally Holdings may make Restricted Payments if availability under the ABL facility equals or exceeds certain thresholds, and no default then exists under the facility. For Restricted Payments up to $30.0 million during each fiscal year, borrowing availability must equal or exceed the lesser of $75.0 million or 15% of the borrowing base for 45 days prior to such Restricted Payment. For Restricted Payments in excess of that amount, borrowing availability must equal or exceed the lesser of $100.0 million or 20% of the borrowing base for 45 days prior to such Restricted Payment and the Consolidated Fixed Charge Coverage Ratio (as defined below) must equal or exceed 1.1 to 1.0. Further, if borrowing availability equals or exceeds the lesser of $150.0 million or 30% of the borrowing base, Restricted Payments are not limited by the Consolidated Fixed Charge Coverage Ratio test. The Consolidated Fixed Charge Coverage Ratio is defined as the ratio of (i) Consolidated EBITDA (as defined in the ABL facility) during the trailing twelve-month period preceding such proposed Restricted Payment minus certain unfinanced capital expenditures made during such period and income tax payments paid in cash during such period to (ii) fixed charges (as defined in the ABL facility). In addition, during any period that borrowing availability under the ABL facility is less than the greater of $40.0 million or 10% of the borrowing base, the level of the Consolidated Fixed Charge Coverage Ratio that the Company must satisfy is 1.0 to 1.0. As of December 31, 2016, the Consolidated Fixed Charge Coverage Ratio was approximately 3.4 to 1.0. When used in this Quarterly Report, the phrase “Consolidated EBITDA” is intended to have the meaning ascribed to such phrase in the ABL facility or the indentures governing the senior notes due 2022, 2023 and 2025, as appropriate. EBITDA is not a recognized measurement under GAAP and should not be considered a substitute for financial performance and liquidity measures determined in accordance with GAAP, such as net earnings, operating earnings and operating cash flows. The ABL facility and the indentures governing the senior notes due 2022, 2023 and 2025 contain other covenants regarding restrictions on the disposition of assets, the granting of liens and security interests, the prepayment of certain indebtedness, and other matters and customary events of default, including customary cross-default and/or cross-acceleration provisions. As of December 31, 2016, all the net assets of our consolidated subsidiaries were unrestricted from transfer under our credit arrangements.

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities	3 Months Ended
	Dec. 31, 2016
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities	10. Derivative Instruments and Hedging Activities Risk Management Objectives of Using Derivative Instruments The Company is exposed to a wide variety of risks, including risks arising from changing economic conditions. The Company manages its exposure to certain economic risks (including liquidity, credit risk, and changes in foreign currency exchange rates and in interest rates) primarily: (a) by closely managing its cash flows from operating and investing activities and the amounts and sources of its debt obligations; (b) by assessing periodically the creditworthiness of its business partners; and (c) through the use of derivative instruments (including foreign exchange contracts and interest rate swaps) by Sally Holdings and its subsidiaries. The Company uses foreign exchange contracts (including foreign currency forwards and options) as part of its overall economic risk management strategy to effectively fix the amount of certain foreign assets and obligations relative to its functional and reporting currency (the U.S. dollar) or relative to the functional currency of certain of its consolidated subsidiaries, or to add stability to cash flows resulting from its net investments (including intercompany notes not permanently invested) and earnings denominated in foreign currencies. The Company’s foreign currency exposures at times offset each other, sometimes providing a natural hedge against its foreign currency risk. In connection with the remaining foreign currency risk, the Company uses foreign exchange contracts to effectively fix the foreign currency exchange rate applicable to specific anticipated foreign currency-denominated cash flows, thus limiting the potential fluctuations in such cash flows as a result of foreign currency market movements. The Company from time to time has used interest rate swaps as part of its overall economic risk management strategy to add stability to the interest payments due in connection with its debt obligations. At December 31, 2016, our exposure to interest rate fluctuations relates to interest payments under the ABL facility, if any, and the Company held no derivative instruments in connection therewith. As of December 31, 2016, the Company did not purchase or hold any derivative instruments for trading or speculative purposes. Designated Cash Flow Hedges The Company may use from time to time derivative instruments designated as hedges to manage its exposure to interest rate or foreign currency exchange rate movements, as appropriate. However, at December 31, 2016, the Company did not purchase or hold any such derivatives. Non-designated Cash Flow Hedges The Company may use from time to time derivative instruments (such as foreign exchange contracts and interest rate swaps) not designated as hedges or that do not meet the requirements for hedge accounting to manage its exposure to foreign currency exchange rate or interest rate movements, as appropriate. The Company uses foreign exchange contracts to manage the exposure to the U.S. dollar resulting from certain of its Sinelco Group subsidiaries’ purchases of merchandise from third-party suppliers. Sinelco’s functional currency is the Euro. As such, at December 31, 2016, the Company holds foreign currency forwards that enables it to sell approximately €12.0 million ($12.6 million, at the December 31, 2016 exchange rate) at a weighted average contractual exchange rate of 1.1243. The foreign currency forwards discussed in this paragraph are with a single counterparty and expire ratably through September 15, 2017. The Company also uses foreign exchange contracts to mitigate its exposure to changes in foreign currency exchange rates in connection with certain intercompany balances not permanently invested. As such, at December 31, 2016, the Company holds: (a) a foreign currency forward that enables it to sell approximately €3.9 million ($4.1 million, at the December 31, 2016 exchange rate) at a contractual exchange rate of 1.0465, (b) foreign currency forwards which enable it to sell approximately 6.3 million Canadian dollars ($4.7 million, at the December 31, 2016 exchange rate) at a weighted average contractual exchange rate of 1.3443, (c) a foreign currency forward that enables it to sell approximately 31.9 million Mexican pesos ($1.5 million, at the December 31, 2016 exchange rate) at a contractual exchange rate of 20.7025 and (d) a foreign currency forward that enables it to buy approximately £0.21 million ($0.26 million, at the December 31, 2016 exchange rate) at a contractual exchange rate of 1.2254. All the foreign currency forwards discussed in this paragraph are with a single counterparty (not the same counterparty as that on the forwards discussed in the preceding paragraph) and expire on or before March 31, 2017. The Company’s foreign exchange contracts are not designated as hedges and do not currently meet the requirements for hedge accounting. Accordingly, the changes in the fair value (i.e., marked-to-market adjustments) of these derivative instruments, which are adjusted quarterly, are recorded in selling, general and administrative expenses in our consolidated statements of earnings. During the three months ended December 31, 2016 and 2015, selling, general and administrative expenses include net gains of $1.8 million and $1.0 million, respectively, in connection with all of the Company’s foreign currency derivative instruments, including marked-to-market adjustments. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Company’s consolidated balance sheets as of December 31, 2016 and September 30, 2016 (in thousands): Asset Derivatives Liability Derivatives Classification December 31, September 30, Classification December 31, September 30, Derivatives designated as hedging instruments: None Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets $ $ — Accrued liabilities $ $ $ $ — $ $ The table below presents the effect of the Company’s derivative financial instruments on the Company’s consolidated statements of earnings for the three months ended December 31, 2016 and 2015 (in thousands): Derivatives Designated as Hedging Amount of Gain or (Loss) Recognized Amount of Gain or (Loss) Reclassified from None Derivatives Not Designated as Hedging Classification of Gain or Amount of Gain or (Loss) Recognized in Income Three Months Ended December 31, 2016 2015 Foreign exchange contracts Selling, general and administrative expenses $ $ Credit-risk-related Contingent Features At December 31, 2016, the aggregate fair value of all foreign exchange contracts held which consisted of derivative instruments in a liability position was less than $0.1 million. The Company was under no obligation to post and had not posted any collateral related to the derivative instruments in a liability position. The counterparties to our derivative instruments are deemed by the Company to be of substantial resources and strong creditworthiness. However, these transactions result in exposure to credit risk in the event of default by a counterparty. In the event that a counterparty defaults in its obligation under our derivative instruments, the Company could incur material financial losses. However, at the present time, no such losses are deemed probable.

Business Segments

Business Segments	3 Months Ended
	Dec. 31, 2016
Business Segments
Business Segments	11. Business Segments The Company’s business is organized into two operating segments: (i) Sally Beauty Supply, a domestic and international chain of cash-and-carry retail stores which offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America and (ii) BSG, including its franchise-based business Armstrong McCall, a full service beauty supply distributor which offers professional brands of beauty products directly to salons and salon professionals through its own sales force and professional-only stores in partially exclusive geographical territories primarily in North America. The accounting policies of both of our business segments are the same as described in the summary of significant accounting policies contained in Note 2 of the “Notes to Consolidated Financial Statements” in “Item 8 - Financial Statements and Supplementary Data” contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2016. Sales between segments, which were eliminated in consolidation, were not material during the three months ended December 31, 2016 and 2015. Segment data for the three months ended December 31, 2016 and 2015 is as follows (in thousands): Three Months Ended December 31, 2016 2015(a) Net sales: Sally Beauty Supply $ $ BSG Total $ $ Earnings before provision for income taxes: Segment operating earnings: Sally Beauty Supply $ $ BSG Segment operating earnings Unallocated expenses (b) ) ) Share-based compensation expense ) ) Interest expense (c) ) ) Earnings before provision for income taxes $ $ (a) Certain amounts for the prior fiscal period have been reclassified to conform to the current fiscal period presentation, in connection with realignment of a business component from our BSG segment to our Sally Beauty Supply segment. (b) Unallocated expenses consist of corporate and shared costs. (c) For the three months ended December 31, 2015, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company’s December 2015 redemption of its 6.875% Senior Notes due 2019.

Parent, Issuers, Guarantor and

Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements	3 Months Ended
	Dec. 31, 2016
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements	12. Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements The following consolidating financial information presents the condensed consolidating balance sheets as of December 31, 2016 and September 30, 2016, and the related condensed consolidating statements of earnings, condensed consolidating statements of comprehensive income and condensed consolidating statements of cash flows for the three months ended December 31, 2016 and 2015 of: (i) Sally Beauty Holdings, Inc., or the “Parent;” (ii) Sally Holdings LLC and Sally Capital Inc., or the “Issuers;” (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries; (v) elimination entries necessary for consolidation purposes; and (vi) Sally Beauty on a consolidated basis. Investments in subsidiaries are accounted for using the equity method for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including intercompany cash flows. Separate financial statements and other disclosures with respect to the subsidiary guarantors have not been provided because management believes the following information is sufficient since the guarantor subsidiaries are 100% indirectly owned by the Parent and all guarantees are full and unconditional. The accounts, inventory, credit card receivables, deposit accounts, certain intercompany notes and certain other personal property of the guarantor subsidiaries relating to the inventory and accounts are pledged under the ABL facility and consequently may not be available to satisfy the claims of general creditors. Sally Beauty Holdings, Inc. and Subsidiaries Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — — Due from affiliates — — — ) — Inventory — — — Other current assets — Deferred income tax assets — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — Total assets $ $ $ $ $ ) $ Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ $ — $ $ $ — $ Due to affiliates — ) — Accrued liabilities — Income taxes payable — Long-term debt — — Other liabilities — — — Deferred income tax liabilities ) ) — Total liabilities ) Total stockholders’ (deficit) equity ) ) ) Total liabilities and stockholders’ (deficit) equity $ $ $ $ $ ) $ Sally Beauty Holdings, Inc. and Subsidiaries Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — Due from affiliates — — — ) — Inventory — — — Other current assets — Deferred income tax assets — — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — Total assets $ $ $ $ $ ) $ Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ $ $ $ $ — $ Due to affiliates — ) — Accrued liabilities — Income taxes payable — — — Long-term debt — — Other liabilities — — — Deferred income tax liabilities — — — Total liabilities ) Total stockholders’ (deficit) equity ) ) ) Total liabilities and stockholders’ (deficit) equity $ $ $ $ $ ) $ Sally Beauty Holdings, Inc. and Subsidiaries Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — Operating earnings (loss) ) ) — Interest expense — — — Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — Net earnings ) Other comprehensive income (loss), net of tax — — — ) — ) Total comprehensive income (loss) $ $ $ $ ) $ ) $ Sally Beauty Holdings, Inc. and Subsidiaries Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — — Operating earnings (loss) ) ) — Interest expense — — Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — Net earnings ) Other comprehensive income (loss), net of tax — — — ) — ) Total comprehensive income (loss) $ $ $ $ ) $ ) $ Sally Beauty Holdings, Inc. and Subsidiaries Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non-Guarantor Consolidating Sally Beauty Net cash provided (used) by operating activities $ $ ) $ $ ) $ — $ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment — — ) ) — ) Due from affiliates — — ) — — Net cash used by investing activities — — ) ) ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — — Repayments of long-term debt — ) ) ) — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Due to affiliates — ) — Excess tax benefit/shortfall from share-based compensation ) — — — — ) Net cash (used) provided by financing activities ) ) ) ) Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) Net (decrease) increase in cash and cash equivalents — ) — Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period $ — $ $ $ $ — $ Sally Beauty Holdings, Inc. and Subsidiaries Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non-Guarantor Consolidating Sally Beauty Net cash provided (used) by operating activities $ $ ) $ $ $ — $ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment — — ) ) — ) Acquisitions, net of cash acquired — — ) — — ) Net cash used by investing activities — — ) ) — ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — — Repayments of long-term debt — ) ) ) — ) Repurchases of common stock ) — — — — ) Debt issuance costs — ) — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — Net cash used by financing activities ) ) ) ) — ) Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) Net (decrease) increase in cash and cash equivalents — ) ) — ) Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period $ — $ — $ $ $ — $

Subsequent Event

Subsequent Event	3 Months Ended
	Dec. 31, 2016
Subsequent Event
Subsequent Event	13. Subsequent Event On January 26, 2017, the Company’s Board of Directors approved a comprehensive restructuring plan for the Company’s businesses that includes a wide range of organizational efficiency initiatives and cost reduction opportunities. The Company expects to recognize the majority of the expenses related to implementation of the restructuring plan in its fiscal quarter ending March 31, 2017.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Dec. 31, 2016
Fair Value Measurements
Schedule of financial assets and liabilities by fair value hierarchy	Consistent with this hierarchy, the Company categorized certain of its financial assets and liabilities as follows at December 31, 2016 and September 30, 2016 (in thousands): As of December 31, 2016 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (a) $ $ — $ $ — Total assets $ $ — $ $ — Liabilities Long-term debt (b) $ $ $ $ — Foreign exchange contracts (a) — — Total liabilities $ $ $ $ — As of September 30, 2016 Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (a) $ — $ — $ — $ — Total assets $ — $ — $ — $ — Liabilities Long-term debt (b) $ $ $ $ — Foreign exchange contracts (a) — — Total liabilities $ $ $ $ — (a) Foreign exchange contracts (including foreign currency forwards and options) are valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market foreign currency exchange rates. Please see Note 10 for more information about the Company’s foreign exchange contracts. (b) Long-term debt (including current maturities and borrowings under the ABL facility, if any) is carried in the Company’s consolidated financial statements at amortized cost of $1,807.1 million at December 31, 2016 and $1,807.7 million at September 30, 2016, less unamortized debt issuance costs of $22.9 million at December 31, 2016 and $23.7 million at September 30, 2016. The Company’s senior notes are valued for purposes of this disclosure using unadjusted quoted market prices for such debt securities. Other long-term debt (consisting primarily of borrowings under the ABL facility, if any, and capital lease obligations) is generally valued for purposes of this disclosure using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Please see Note 9 for more information about the Company’s debt.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Dec. 31, 2016
Earnings Per Share
Schedule of computations of basic and diluted earnings per share	The following table sets forth the computations of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended 2016 2015 Net earnings $ $ Weighted average basic shares Dilutive securities: Stock option and stock award programs Weighted average diluted shares Earnings per share: Basic $ $ Diluted $ $

Share-Based Payments (Tables)

Share-Based Payments (Tables)	3 Months Ended
	Dec. 31, 2016
Share-Based Payments
Schedule of total compensation cost charged against income	The following table presents the total compensation cost charged against income and included in selling, general and administrative expenses for all share-based compensation arrangements, and the related tax benefits recognized in our consolidated statements of earnings (in thousands): Three Months Ended 2016 2015 Share-based compensation expense $ $ Income tax benefit related to share-based compensation expense $ $
Summary of activity for performance based unit awards	Performance Unit Awards Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 $ Granted Vested — — Forfeited ) Unvested at December 31, 2016 $
Summary of activity for stock option awards	Number of Weighted Weighted Aggregate Outstanding at September 30, 2016 $ $ Granted Exercised ) Forfeited or expired ) Outstanding at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $
Summary of stock options by range of exercise prices	The following table summarizes additional information about service-based stock options outstanding at December 31, 2016 under the Company’s share-based compensation plans: Options Outstanding Options Exercisable Range of Number of Weighted Weighted Number of Weighted $ 5.24 – 19.99 $ $ $ 20.00 – 24.99 $ 25.00 – 31.58 Total $ $
Schedule of weighted average assumptions for valuation of stock options	Three months ended 2016 2015 Expected life (in years) Expected volatility for the Company’s common stock % % Risk-free interest rate % % Dividend yield % %
Restricted Stock Awards
Share-Based Payments
Summary of the activity for restricted stock awards/units	Restricted Stock Awards Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 $ Granted Vested ) Forfeited ) Unvested at December 31, 2016 $
Restricted Stock Units
Share-Based Payments
Summary of the activity for restricted stock awards/units	Restricted Stock Units Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 — $ — — Granted Vested — — Forfeited — — Unvested at December 31, 2016 $

Short-term Borrowings and Lon24

Short-term Borrowings and Long-Term Debt (Tables)	3 Months Ended
	Dec. 31, 2016
Short-term Borrowings and Long-Term Debt
Summary of long-term debt	Details of long-term debt as of December 31, 2016 and September 30, 2016 are as follows (dollars in thousands): December 31, September 30, Interest Rates(a) ABL facility(b) $ — $ — (i) Prime plus (0.50% to 0.75%) or; (ii) LIBOR(b) plus (1.50% to 1.75%) Senior notes due Jun. 2022 5.750% Senior notes due Nov. 2023 5.500% Senior notes due Dec. 2025 5.625% Total $ $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net(c) Total debt $ $ Less: current maturities Total long-term debt $ $ (a) Interest rates shown represent the coupon or contractual rate or rates related to each debt instrument listed. (b) When used in this Quarterly Report, LIBOR means the London Interbank Offered Rate. At December 31, 2016 and September 30, 2016, unamortized debt issuance costs of $1.4 million and $1.6 million, respectively, related to the ABL facility are reported in other assets in the Company’s consolidated balance sheets. (c) Amounts are net of unamortized premium of $5.3 million and $5.6 million as of December 31, 2016 and September 30, 2016, respectively, related to certain notes with an aggregate principal amount of $150.0 million of the senior notes due June 2022.
Schedule of maturities of long-term debt	Maturities of the Company’s long-term debt are as follows as of December 31, 2016 (in thousands): Twelve months ending December 31: 2017-2021 $ — Thereafter $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net Less: current maturities Total long-term debt $

Derivative Instruments and He25

Derivative Instruments and Hedging Activities (Tables)	3 Months Ended
	Dec. 31, 2016
Derivative Instruments and Hedging Activities
Tabular disclosure of fair values of derivative financial instruments	The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Company’s consolidated balance sheets as of December 31, 2016 and September 30, 2016 (in thousands): Asset Derivatives Liability Derivatives Classification December 31, September 30, Classification December 31, September 30, Derivatives designated as hedging instruments: None Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets $ $ — Accrued liabilities $ $ $ $ — $ $
Tabular disclosure of the effect of derivative financial instruments on the statement of earnings	The table below presents the effect of the Company’s derivative financial instruments on the Company’s consolidated statements of earnings for the three months ended December 31, 2016 and 2015 (in thousands): Derivatives Designated as Hedging Amount of Gain or (Loss) Recognized Amount of Gain or (Loss) Reclassified from None Derivatives Not Designated as Hedging Classification of Gain or Amount of Gain or (Loss) Recognized in Income Three Months Ended December 31, 2016 2015 Foreign exchange contracts Selling, general and administrative expenses $ $

Business Segments (Tables)

Business Segments (Tables)	3 Months Ended
	Dec. 31, 2016
Business Segments
Schedule of segment data	Segment data for the three months ended December 31, 2016 and 2015 is as follows (in thousands): Three Months Ended December 31, 2016 2015(a) Net sales: Sally Beauty Supply $ $ BSG Total $ $ Earnings before provision for income taxes: Segment operating earnings: Sally Beauty Supply $ $ BSG Segment operating earnings Unallocated expenses (b) ) ) Share-based compensation expense ) ) Interest expense (c) ) ) Earnings before provision for income taxes $ $ (a) Certain amounts for the prior fiscal period have been reclassified to conform to the current fiscal period presentation, in connection with realignment of a business component from our BSG segment to our Sally Beauty Supply segment. (b) Unallocated expenses consist of corporate and shared costs. (c) For the three months ended December 31, 2015, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company’s December 2015 redemption of its 6.875% Senior Notes due 2019.

Parent, Issuers, Guarantor an27

Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements (Tables)	3 Months Ended
	Dec. 31, 2016
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements
Schedule of Condensed Consolidating Balance Sheet	Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — — Due from affiliates — — — ) — Inventory — — — Other current assets — Deferred income tax assets — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — Total assets $ $ $ $ $ ) $ Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ $ — $ $ $ — $ Due to affiliates — ) — Accrued liabilities — Income taxes payable — Long-term debt — — Other liabilities — — — Deferred income tax liabilities ) ) — Total liabilities ) Total stockholders’ (deficit) equity ) ) ) Total liabilities and stockholders’ (deficit) equity $ $ $ $ $ ) $ Condensed Consolidating Balance Sheet Parent Sally Guarantor Non- Consolidating Sally Beauty Assets Cash and cash equivalents $ — $ $ $ $ — $ Trade and other accounts receivable, less allowance for doubtful accounts — — Due from affiliates — — — ) — Inventory — — — Other current assets — Deferred income tax assets — — Property and equipment, net — — Investment in subsidiaries — ) — Goodwill and other intangible assets, net — — — Other assets ) — Total assets $ $ $ $ $ ) $ Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ $ $ $ $ — $ Due to affiliates — ) — Accrued liabilities — Income taxes payable — — — Long-term debt — — Other liabilities — — — Deferred income tax liabilities — — — Total liabilities ) Total stockholders’ (deficit) equity ) ) ) Total liabilities and stockholders’ (deficit) equity $ $ $ $ $ ) $
Schedule of Condensed Consolidating Statement of Earnings and Comprehensive Income	Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — Operating earnings (loss) ) ) — Interest expense — — — Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — Net earnings ) Other comprehensive income (loss), net of tax — — — ) — ) Total comprehensive income (loss) $ $ $ $ ) $ ) $ Condensed Consolidating Statement of Earnings and Comprehensive Income Parent Sally Holdings Guarantor Non- Consolidating Sally Beauty Net sales $ — $ — $ $ $ — $ Related party sales — — — ) — Cost of products sold and distribution expenses — — ) Gross profit — — — Selling, general and administrative expenses — Depreciation and amortization — — — Operating earnings (loss) ) ) — Interest expense — — Earnings (loss) before provision for income taxes ) ) — Provision (benefit) for income taxes ) ) — Equity in earnings of subsidiaries, net of tax — ) — Net earnings ) Other comprehensive income (loss), net of tax — — — ) — ) Total comprehensive income (loss) $ $ $ $ ) $ ) $
Schedule of Condensed Consolidating Statement of Cash Flows	Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non-Guarantor Consolidating Sally Beauty Net cash provided (used) by operating activities $ $ ) $ $ ) $ — $ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment — — ) ) — ) Due from affiliates — — ) — — Net cash used by investing activities — — ) ) ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — — Repayments of long-term debt — ) ) ) — ) Repurchases of common stock ) — — — — ) Proceeds from exercises of stock options — — — — Due to affiliates — ) — Excess tax benefit/shortfall from share-based compensation ) — — — — ) Net cash (used) provided by financing activities ) ) ) ) Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) Net (decrease) increase in cash and cash equivalents — ) — Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period $ — $ $ $ $ — $ Condensed Consolidating Statement of Cash Flows Parent Sally Holdings Guarantor Non-Guarantor Consolidating Sally Beauty Net cash provided (used) by operating activities $ $ ) $ $ $ — $ Cash Flows from Investing Activities: Capital expenditures, net of proceeds from sale of property and equipment — — ) ) — ) Acquisitions, net of cash acquired — — ) — — ) Net cash used by investing activities — — ) ) — ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — — — — Repayments of long-term debt — ) ) ) — ) Repurchases of common stock ) — — — — ) Debt issuance costs — ) — — — ) Proceeds from exercises of stock options — — — — Excess tax benefit from share-based compensation — — — — Net cash used by financing activities ) ) ) ) — ) Effect of foreign exchange rate changes on cash and cash equivalents — — — ) — ) Net (decrease) increase in cash and cash equivalents — ) ) — ) Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period $ — $ — $ $ $ — $

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Liabilities
Unamortized debt issuance costs	$ 17,539	$ 18,113
Fair value measurement on recurring basis | Total
Assets
Total assets	779
Liabilities
Long-term debt (b)	1,880,326	1,899,748
Total liabilities	1,880,372	1,900,020
Foreign exchange contracts | Fair value measurement on recurring basis | Total
Assets
Foreign exchange contracts (a)	779
Liabilities
Foreign exchange contracts (a)	46	272
Level 1 | Fair value measurement on recurring basis
Liabilities
Long-term debt (b)	1,878,500	1,897,625
Total liabilities	1,878,500	1,897,625
Level 2 | Fair value measurement on recurring basis
Assets
Total assets	779
Liabilities
Long-term debt (b)	1,826	2,123
Total liabilities	1,872	2,395
Level 2 | Foreign exchange contracts | Fair value measurement on recurring basis
Assets
Foreign exchange contracts (a)	779
Liabilities
Foreign exchange contracts (a)	46	272
ABL facility
Liabilities
Long-term debt (b)	1,807,100	1,807,700
Unamortized debt issuance costs	$ 22,900	$ 23,700

Accumulated Stockholders' Def29

Accumulated Stockholders' Deficit - Share Repurchase Program (Details) - 2014 Share Repurchase Program - USD ($) shares in Millions, $ in Millions	1 Months Ended	3 Months Ended
	Aug. 31, 2014	Dec. 31, 2016	Dec. 31, 2015
Share repurchase program
Amount of shares authorized to be repurchased	$ 1,000
Term of share repurchase program	3 years
Common stock shares repurchased and retired (in shares)		2.5	2.4
Cost of repurchase and retirement of common stock		$ 67	$ 62.4

Accumulated Stockholders' Def30

Accumulated Stockholders' Deficit - Accumulated other comprehensive loss (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Accumulated Stockholders' Equity (Deficit)
Accumulated other comprehensive loss	$ 118,719	$ 100,051
Foreign currency translation adjustments
Accumulated Stockholders' Equity (Deficit)
Accumulated other comprehensive loss	118,700	100,100
Income taxes on accumulated other comprehensive loss	$ 2,300	$ 2,300

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share Reconciliation:
Net earnings	$ 55,826	$ 42,243
Weighted average basic shares	143,631,000	150,786,000
Dilutive securities:
Stock option and stock award programs (in shares)	1,229,000	1,640,000
Weighted average diluted shares	144,860,000	152,426,000
Earnings per share:
Basic (in dollars per share)	$ 0.39	$ 0.28
Diluted (in dollars per share)	$ 0.39	$ 0.28
Common stock potentially outstanding but not included in the computation of diluted earnings per share
Options to purchase shares not included in the computation of diluted earnings per share since the options were anti-dilutive (in shares)	2,457,972	3,878,836

Share-Based Payments (Details)

Share-Based Payments (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Share-Based Payments
Common stock approved for issuance under share-based compensation plan (in shares)	29.8
Share-based compensation expense (in dollars)	$ 3,814	$ 4,188
Income tax benefit related to share-based compensation expense	$ 1,439	$ 1,588

Share-Based Payments - Performa

Share-Based Payments - Performance-Based Awards (Details) $ / shares in Units, $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2016USD ($)item$ / sharesshares	Dec. 31, 2015USD ($)shares	Sep. 30, 2016$ / sharesshares
Share-Based Payments
Accelerated expense related to certain retirement eligible employees (in dollars) | $	$ 1.1	$ 1.3
Performance units
Share-Based Payments
Expected life (in years)	3 years
Number of performance targets | item	2
Compensation expenses as percentage of performance target (as a percent)	100.00%
Performance-Based Awards (in shares)
Unvested at the beginning of the period (in shares)	132,000
Granted (in shares)	146,000	152,000
Forfeited (in shares)	(15,000)
Unvested at the end of the period (in shares)	263,000		132,000
Performance-Based Awards (in dollars per share)
Unvested at the beginning of the period (in dollars per share) | $ / shares	$ 23.45
Granted (in dollars per share) | $ / shares	25.53
Forfeited (in dollars per share) | $ / shares	24.21
Unvested at the end of the period (in dollars per share) | $ / shares	$ 24.56		$ 23.45
Performance-Based Awards (in years)
Weighted Average Remaining Vesting Term (in Years)	2 years 4 months 24 days		2 years
Total unrecognized compensation costs related to unvested stock option awards | $	$ 4.8
Weighted average period for recognition of unvested awards	2 years 4 months 24 days
Performance units | Minimum
Share-Based Payments
Percentage of target shares	0.00%
Performance units | Maximum
Share-Based Payments
Percentage of target shares	200.00%
Service-based stock options
Performance-Based Awards (in shares)
Granted (in shares)	1,500,000	1,400,000
Service-based restricted share awards
Performance-Based Awards (in shares)
Granted (in shares)	22,000	23,000
Service-based restricted stock units
Performance-Based Awards (in shares)
Granted (in shares)	39,000	26,000

Share-Based Payments - Stock Op

Share-Based Payments - Stock Option Awards (Details) - Stock Option Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016
Stock Options, Number of Outstanding Options
Outstanding at the beginning of the period (in shares)	5,584
Granted (in shares)	1,457
Exercised (in shares)	(664)
Forfeited or expired (in shares)	(89)
Outstanding at the end of the period (in shares)	6,288	5,584
Exercisable at the end of the period (in shares)	3,146
Stock Options, Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 22.95
Granted (in dollars per share)	25.60
Exercised (in dollars per share)	21.50
Forfeited or expired (in dollars per share)	27.02
Outstanding at the end of the period (in dollars per share)	23.66	$ 22.95
Exercisable at the end of the period (in dollars per share)	$ 21.64
Stock Options, Weighted Average Remaining Contractual Term
Weighted average remaining contractual term (in years)	6 years 8 months 12 days	6 years 1 month 6 days
Exercisable at the end of the period (in years)	5 years 1 month 6 days
Stock Options, Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 19,615
Outstanding at the end of the period (in dollars)	20,137	$ 19,615
Exercisable at the end of the period (in dollars)	$ 16,378
Minimum
Share-Based Payments
Vesting period	3 years
Maximum
Share-Based Payments
Term of stock options	10 years
Vesting period	4 years

Share-Based Payments - Summary

Share-Based Payments - Summary of stock options by range of exercise prices (Details) shares in Thousands	3 Months Ended
	Dec. 31, 2016$ / sharesshares
Options Outstanding
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares	6,288
Range of Exercise Prices, Weighted Average Remaining Contractual Term	6 years 8 months 12 days
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 23.66
Options Exercisable
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares	3,146
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 21.64
Range of Exercise Prices $5.24 - 19.99
Information about stock options under option plans
Lower Range of Exercise Prices (in dollars per share)	5.24
Upper Range of Exercise Prices (in dollars per share)	$ 19.99
Options Outstanding
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares	970
Range of Exercise Prices, Weighted Average Remaining Contractual Term	3 years 3 months 18 days
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 12.85
Options Exercisable
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares	970
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 12.85
Range of Exercise Prices $20.00 - 24.99
Information about stock options under option plans
Lower Range of Exercise Prices (in dollars per share)	20
Upper Range of Exercise Prices (in dollars per share)	$ 24.99
Options Outstanding
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares	1,859
Range of Exercise Prices, Weighted Average Remaining Contractual Term	7 years 2 months 12 days
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 23.46
Options Exercisable
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares	1,042
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 23.47
Range of Exercise Prices $25.00 - 31.58
Information about stock options under option plans
Lower Range of Exercise Prices (in dollars per share)	25
Upper Range of Exercise Prices (in dollars per share)	$ 31.58
Options Outstanding
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares	3,459
Range of Exercise Prices, Weighted Average Remaining Contractual Term	7 years 4 months 24 days
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 26.80
Options Exercisable
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares	1,134
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 27.47

Share-Based Payments - Schedule

Share-Based Payments - Schedule of weighted average assumptions for valuation of stock options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Stock option disclosures
Proceeds from exercises of stock options	$ 14,280	$ 2,716
Stock Option Awards
Weighted average assumptions relating to the valuation of stock options
Expected life (in years)	5 years	5 years
Expected volatility (as a percent)	25.30%	27.20%
Risk-free interest rate (as a percent)	1.30%	1.50%
Dividend yield (as a percent)	0.00%	0.00%
Stock option disclosures
Weighted average fair value of the stock options issued (in dollars per share)	$ 6.37	$ 6.27
Aggregate intrinsic value of options exercised	$ 4,200
Proceeds from exercises of stock options	14,300
Tax benefit realized for the tax deductions of stock option exercises	1,600
Total unrecognized compensation costs related to unvested stock option awards	$ 14,300
Weighted average period for recognition of unvested awards	2 years 2 months 12 days

Share-Based Payments - Restrict

Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016
Restricted stock (in shares)
Unvested at the beginning of the period (in shares)	271
Granted (in shares)	22
Vested (in shares)	(25)
Forfeited (in shares)	(2)
Unvested at the end of the period (in shares)	266	271
Restricted Stock (in dollars per share)
Unvested at the beginning of the period (in dollars per share)	$ 26.80
Granted (in dollars per share)	26.33
Vested (in dollars per share)	22.49
Forfeited (in dollars per share)	26.36
Unvested at the end of the period (in dollars per share)	$ 27.17	$ 26.80
Restricted stock (in years)
Weighted Average Remaining Vesting Term (in Years)	1 year 9 months 18 days	1 year 10 months 24 days
Total unrecognized compensation costs	$ 3
Weighted average period for recognition of unvested restricted awards	1 year 9 months 18 days
Minimum
Stock Awards
Vesting period	3 years
Maximum
Stock Awards
Vesting period	5 years

Share-Based Payments - Restri38

Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units $ / shares in Units, $ in Millions	3 Months Ended
	Dec. 31, 2016USD ($)$ / sharesshares
Stock Awards
Vesting period	1 year
Restricted stock units, retention period	6 months
Restricted stock (in shares)
Granted (in shares) | shares	39,000
Unvested at the end of the period (in shares) | shares	39,000
Restricted Stock (in dollars per share)
Granted (in dollars per share) | $ / shares	$ 25.53
Unvested at the end of the period (in dollars per share) | $ / shares	$ 25.53
Restricted stock (in years)
Weighted Average Remaining Vesting Term (in Years)	8 months 12 days
Total unrecognized compensation costs | $	$ 0.8
Weighted average period for recognition of unvested awards	8 months 12 days
Maximum
Stock Awards
Vesting period	1 year

Commitments and Contingencies -

Commitments and Contingencies - Other Contingencies (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Commitments and contingencies
Accrued liability related to loss contingency	$ 15.6
Data security incidents | 2015 data security incident
Commitments and contingencies
Accrued liability related to loss contingency	12.8
Data security incidents | 2014 data security incident
Commitments and contingencies
Accrued liability related to loss contingency	2.9
Selling, general and administrative expenses | Data security incidents
Commitments and contingencies
Data security incident expenses	$ 0.1	$ 0.5

Short-term Borrowings and Lon40

Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Debt Instruments
Total	$ 1,800,000	$ 1,800,000
ABL facility | Prime | Minimum
Debt Instruments
Percentage points added to the reference rate	0.50%
ABL facility | Prime | Maximum
Debt Instruments
Percentage points added to the reference rate	0.75%
ABL facility | LIBOR | Minimum
Debt Instruments
Percentage points added to the reference rate	1.50%
ABL facility | LIBOR | Maximum
Debt Instruments
Percentage points added to the reference rate	1.75%
Senior notes due Nov. 2019
Debt Instruments
Interest rate (as a percent)			6.875%
Senior notes due Jun. 2022
Debt Instruments
Total	$ 850,000	850,000
Interest rate (as a percent)	5.75%
Senior notes due Nov. 2023
Debt Instruments
Total	$ 200,000	200,000
Interest rate (as a percent)	5.50%
Senior notes due Dec. 2025
Debt Instruments
Total	$ 750,000	$ 750,000
Interest rate (as a percent)	5.625%

Short-term Borrowings and Lon41

Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table - Total debt (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Short-term Borrowings and Long-Term Debt
Total	$ 1,800,000	$ 1,800,000
Plus: capital lease obligations	1,826	2,123
Less: unamortized debt issuance costs and premium, net	17,539	18,113
Total debt	$ 1,784,287	$ 1,784,010

Short-term Borrowings and Lon42

Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table - Total long-term debt (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Short-term Borrowings and Long-Term Debt
Total debt	$ 1,784,287	$ 1,784,010
Less: current portion	678	716
Total long-term debt	$ 1,783,609	$ 1,783,294

Short-term Borrowings and Lon43

Short-term Borrowings and Long-Term Debt - Details of Long-Term Debt Table - Subscript Details (Details) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Debt Instruments
Unamortized premium related to certain notes	$ 5.3	$ 5.6
ABL facility | Other assets
Debt Instruments
Unamortized deferred financing costs	1.4	$ 1.6
Senior notes due Jun. 2022
Debt Instruments
Aggregate principal amount related to certain notes	$ 150

Short-term Borrowings and Lon44

Short-term Borrowings and Long-Term Debt - ABL Facility and Senior Notes (Details) - USD ($) $ in Thousands	Dec. 03, 2015	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016
Debt Instruments
Repayments of Long-term Debt		$ 58,674	$ 825,971
Loss on extinguishment of debt			33,296
Capitalized financing costs			$ 12,709
ABL facility
Debt Instruments
Outstanding borrowings		0
Remaining credit facility available		$ 480,000
ABL facility | Sally Holdings, LLC
Debt Instruments
Revolving credit facility				$ 500,000
Line of credit facility term				5 years
Canadian sub-facility
Debt Instruments
Revolving credit facility				$ 25,000
Senior notes due Nov. 2019
Debt Instruments
Interest rate (as a percent)			6.875%
Loss on extinguishment of debt			$ 33,300
Senior notes due Jun. 2022
Debt Instruments
Interest rate (as a percent)		5.75%
Senior notes due Nov. 2023
Debt Instruments
Interest rate (as a percent)		5.50%
Senior notes due Dec. 2025
Debt Instruments
Interest rate (as a percent)		5.625%
Senior notes due Dec. 2025 and ABL facility
Debt Instruments
Debt instrument, face amount				$ 750,000
Interest rate (as a percent)				5.625%
Proceeds used to repay borrowings	$ 737,300
Redemption of aggregate principal amount				$ 750,000
Loss on extinguishment of debt	33,300
Redemption premium of debt	25,800
Unamortized deferred financing costs	7,500
Capitalized financing costs	$ 12,700

Short-term Borrowings and Lon45

Short-term Borrowings and Long-Term Debt - Maturities of the Company's long-term debt (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Fiscal Year
Thereafter	$ 1,800,000
Total	1,800,000	$ 1,800,000
Plus: capital lease obligations	1,826	2,123
Less: unamortized debt issuance costs and premium, net	17,539
Less: current portion	678	716
Total long-term debt	$ 1,783,609	$ 1,783,294

Short-term Borrowings and Lon46

Short-term Borrowings and Long-Term Debt - ABL Facility and Senior Notes Additional Details (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2016USD ($)item	Sep. 30, 2016USD ($)	Dec. 31, 2015USD ($)	Sep. 30, 2015USD ($)
Debt Instruments
Cash and cash equivalents	$ 94,410	$ 86,622	$ 67,447	$ 140,038
ABL facility
Debt Instruments
Secured Leverage Ratio, threshold	4
Secured Leverage Ratio	0.1
Minimum borrowing availability	$ 40,000
Percentage of borrowing base	10.00%
Consolidated Fixed-Charge Coverage Ratio, threshold	1
Consolidated Fixed-Charge Coverage Ratio	3.4
ABL facility | Restricted payments up to $30.0 million
Debt Instruments
Restricted payments	$ 30,000
Minimum borrowing availability	$ 75,000
Percentage of borrowing base	15.00%
Period prior to payments of dividends and other equity distributions up to certain thresholds under the terms of the credit facility must be met	45 days
ABL facility | Restricted payments in excess of $30.0 million
Debt Instruments
Minimum borrowing availability	$ 100,000
Percentage of borrowing base	20.00%
Revolving credit facility	$ 150,000
Period prior to payments of dividends and other equity distributions up to certain thresholds under the terms of the credit facility must be met	45 days
Consolidated Fixed-Charge Coverage Ratio, threshold	1.1
Percentage of lesser of $150.0 million or borrowing base, considered for applicability of Consolidated Fixed Charge Coverage Ratio	30.00%
Trailing period preceding proposed Restricted Payment	12 months
Senior notes due 2022, 2023 and 2025
Debt Instruments
Consolidated Coverage Ratio, threshold	2
Consolidated Coverage Ratio	6.1
Number of consecutive fiscal quarters | item	4
Percentage of Sally Holdings and its subsidiaries cumulative consolidated net earnings	50.00%
Consolidated Total Leverage Ratio, threshold	3.25
Consolidated Total Leverage Ratio	2.7
Senior notes due 2022, 2023 and 2025 | Maximum
Debt Instruments
Cash and cash equivalents	$ 100,000
Senior notes due Dec. 2025
Debt Instruments
Maximum conditional amount of debt for restricted payments	$ 350,000

Derivative Instruments and He47

Derivative Instruments and Hedging Activities - (Details) - Dec. 31, 2016 £ in Thousands, $ in Thousands, € in Millions, MXN in Millions, CAD in Millions	MXNderivative	EUR (€)derivative	CADderivative	USD ($)derivative	GBP (£)derivative
Designated Cash Flow Hedges
Number of derivative instruments held	0	0	0	0	0
USD:EUR | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges To Manage Exposure Of International Subsidiaries Purchases Of Merchandise From Third Party Suppliers
Derivative Instruments
Notional amount		€ 12		$ 12,600
Non-designated Cash Flow Hedges
Weighted average contractual exchange rate (as a percent)	1.1243	1.1243	1.1243	1.1243	1.1243
USD:EUR | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount		€ 3.9		$ 4,100
Non-designated Cash Flow Hedges
Contractual exchange rate (as a percent)	1.0465	1.0465	1.0465	1.0465	1.0465
USD:CAD | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount			CAD 6.3	$ 4,700
CAD:USD | Purchase | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Non-designated Cash Flow Hedges
Weighted average contractual exchange rate (as a percent)	1.3443	1.3443	1.3443	1.3443	1.3443
USD:MXN | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount	MXN 31.9			$ 1,500
Non-designated Cash Flow Hedges
Contractual exchange rate (as a percent)	20.7025	20.7025	20.7025	20.7025	20.7025
UK Pounds:USD | Purchase | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount				$ 260	£ 210
Non-designated Cash Flow Hedges
Contractual exchange rate (as a percent)	1.2254	1.2254	1.2254	1.2254	1.2254

Derivative Instruments and He48

Derivative Instruments and Hedging Activities - Non-designated Cash Flow Hedges (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Derivatives Not Designated as Hedging Instruments
Total derivatives not designated as hedging instruments, Asset	$ 779
Total derivatives not designated as hedging instruments, Liability	46	$ 272
Other current assets
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts, Asset	779
Accrued liabilities
Credit-risk-related Contingent Features
Foreign Exchange Contracts, Liability	$ 46	$ 272

Derivative Instruments and He49

Derivative Instruments and Hedging Activities - Derivatives Designated as Hedging Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Derivatives Designated as Hedging Instruments
Probable loss on counterparty defaults	$ 0
Selling, general and administrative expenses
Derivatives Designated as Hedging Instruments
Amount of Gain or (Loss) Recognized in Income on Derivatives, Foreign Exchange Contracts	1,800	$ 1,000
Foreign exchange contracts | Maximum
Credit-risk-related Contingent Features
Aggregate fair value of all foreign exchange contracts held in a liability position	100
Foreign exchange contracts | Selling, general and administrative expenses
Derivatives Designated as Hedging Instruments
Amount of Gain or (Loss) Recognized in Income on Derivatives, Foreign Exchange Contracts	$ 1,816	$ 1,041

Business Segments (Details)

Business Segments (Details) $ in Thousands		3 Months Ended
		Dec. 31, 2016USD ($)segment	Dec. 31, 2015USD ($)
Segments
Number of operating segments | segment		2
Net sales:
Total net sales		$ 999,609	$ 998,032
Segment operating earnings:
Segment operating earnings		117,457	130,935
Share-based compensation expense		(3,814)	(4,188)
Interest expense (b)	[1]	(26,799)	(63,943)
Earnings before provision for income taxes		90,658	66,992
Loss on extinguishment of debt
Loss on extinguishment of debt			33,296
Senior notes due Nov. 2019
Loss on extinguishment of debt
Loss on extinguishment of debt			$ 33,300
Interest rate (as a percent)			6.875%
Operating segments
Segment operating earnings:
Segment operating earnings		156,126	$ 171,957
Corporate
Segment operating earnings:
Unallocated expenses (a)	[2]	(34,855)	(36,834)
Sally Beauty Supply
Net sales:
Total net sales		589,859	601,439
Sally Beauty Supply | Operating segments
Segment operating earnings:
Segment operating earnings		92,526	106,464
Beauty Systems Group
Net sales:
Total net sales		409,750	396,593
Beauty Systems Group | Operating segments
Segment operating earnings:
Segment operating earnings		$ 63,600	$ 65,493
[1]	For the three months ended December 31, 2015, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company’s December 2015 redemption of its 6.875% Senior Notes due 2019
[2]	Certain amounts for the prior fiscal period have been reclassified to conform to the current fiscal period presentation in connection with realignment of a business component from our BSG Segment to our Sally Beauty Supply Segment.Unallocated expenses consist of corporate and shared costs

Parent, Issuers, Guarantor an51

Parent, Issuers, Guarantor and Non Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Condensed Consolidating Balance Sheet
Percentage of guarantor subsidiaries owned by parent	100.00%
Assets
Cash and cash equivalents	$ 94,410	$ 86,622	$ 67,447	$ 140,038
Trade and other accounts receivable, less allowance for doubtful accounts	78,681	83,983
Inventory	907,833	907,337
Other current assets	42,007	54,861
Deferred income tax assets	39,990	40,024
Property and equipment, net	318,260	319,558
Goodwill and other intangible assets, net	615,390	625,677
Other assets	13,288	14,001
Total assets	2,109,859	2,132,063
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	279,635	271,376
Accrued liabilities	180,859	214,584
Income taxes payable	14,325	1,989
Long-term debt	1,784,287	1,784,010
Other liabilities	20,976	21,614
Deferred income tax liabilities	118,753	114,656
Total liabilities	2,398,835	2,408,229
Total stockholders' (deficit) equity	(288,976)	(276,166)
Total liabilities and stockholders' deficit	2,109,859	2,132,063
Reportable Legal Entities | Parent
Assets
Trade and other accounts receivable, less allowance for doubtful accounts		16
Other current assets	883	14,816
Deferred income tax assets	50	50
Property and equipment, net	14	15
Investment in subsidiaries	909,625	870,907
Other assets	1,515	1,515
Total assets	912,087	887,319
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	112	116
Due to affiliates	1,187,645	1,162,045
Accrued liabilities	620	1,324
Income taxes payable	12,757
Deferred income tax liabilities	(71)
Total liabilities	1,201,063	1,163,485
Total stockholders' (deficit) equity	(288,976)	(276,166)
Total liabilities and stockholders' deficit	912,087	887,319
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc.
Assets
Cash and cash equivalents	18,443	28,372		46,003
Other current assets		30
Investment in subsidiaries		3,395,436
Other assets		2,158
Total assets		3,425,996
Liabilities and Stockholders' (Deficit) Equity
Accounts payable		1
Due to affiliates		736,373
Accrued liabilities		35,320
Income taxes payable		1,508
Long-term debt		1,781,887
Total liabilities		2,555,089
Total stockholders' (deficit) equity		870,907
Total liabilities and stockholders' deficit		3,425,996
Reportable Legal Entities | Guarantor Subsidiaries
Assets
Cash and cash equivalents	37,189	22,368	27,469	58,851
Trade and other accounts receivable, less allowance for doubtful accounts	53,086	55,989
Due from affiliates	2,035,246	1,966,505
Inventory	711,982	709,523
Other current assets	25,482	23,864
Deferred income tax assets	35,740	35,740
Property and equipment, net	240,581	239,791
Investment in subsidiaries	343,195	359,193
Goodwill and other intangible assets, net	476,635	479,682
Other assets	(8,099)	(8,090)
Total assets	3,951,037	3,884,565
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	225,757	215,552
Accrued liabilities	142,049	145,661
Income taxes payable	1
Long-term debt	13	17
Other liabilities	17,887	17,852
Deferred income tax liabilities	114,734	110,047
Total liabilities	500,441	489,129
Total stockholders' (deficit) equity	3,450,596	3,395,436
Total liabilities and stockholders' deficit	3,951,037	3,884,565
Reportable Legal Entities | Non-Guarantor Subsidiaries
Assets
Cash and cash equivalents	38,778	35,882	$ 39,978	$ 35,184
Trade and other accounts receivable, less allowance for doubtful accounts	25,595	27,978
Inventory	195,851	197,814
Other current assets	15,383	16,151
Deferred income tax assets	4,199	4,234
Property and equipment, net	77,665	79,752
Goodwill and other intangible assets, net	138,755	145,995
Other assets	17,920	18,418
Total assets	514,146	526,224
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	53,766	55,707
Due to affiliates	79,810	68,087
Accrued liabilities	28,321	32,279
Income taxes payable	37	481
Long-term debt	1,813	2,106
Other liabilities	3,089	3,762
Deferred income tax liabilities	4,115	4,609
Total liabilities	170,951	167,031
Total stockholders' (deficit) equity	343,195	359,193
Total liabilities and stockholders' deficit	514,146	526,224
Consolidating Eliminations
Assets
Due from affiliates	(2,035,246)	(1,966,505)
Investment in subsidiaries	(4,703,416)	(4,625,536)
Total assets	(6,738,662)	(6,592,041)
Liabilities and Stockholders' (Deficit) Equity
Due to affiliates	(2,035,246)	(1,966,505)
Total liabilities	(2,035,246)	(1,966,505)
Total stockholders' (deficit) equity	(4,703,416)	(4,625,536)
Total liabilities and stockholders' deficit	(6,738,662)	$ (6,592,041)
Consolidating Eliminations | Sally Holdings LLC and Sally Capital Inc.
Assets
Cash and cash equivalents	18,443
Other current assets	259
Deferred income tax assets	1
Investment in subsidiaries	3,450,596
Other assets	1,952
Total assets	3,471,251
Liabilities and Stockholders' (Deficit) Equity
Due to affiliates	767,791
Accrued liabilities	9,869
Income taxes payable	1,530
Long-term debt	1,782,461
Deferred income tax liabilities	(25)
Total liabilities	2,561,626
Total stockholders' (deficit) equity	909,625
Total liabilities and stockholders' deficit	$ 3,471,251

Parent, Issuers, Guarantor an52

Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Statement of Earnings and Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Condensed Consolidating Statement of Earnings and Comprehensive Income
Net sales	$ 999,609	$ 998,032
Cost of products sold and distribution expenses	507,901	503,983
Gross profit	491,708	494,049
Selling, general and administrative expenses	347,412	339,728
Depreciation and amortization	26,839	23,386
Operating earnings	117,457	130,935
Interest expense	26,799	63,943
Earnings before provision for income taxes	90,658	66,992
Provision (benefit) for income taxes	34,832	24,749
Net earnings	55,826	42,243
Other comprehensive income (loss), net of tax	(18,668)	(10,221)
Total comprehensive income	37,158	32,022
Reportable Legal Entities | Parent
Condensed Consolidating Statement of Earnings and Comprehensive Income
Selling, general and administrative expenses	2,548	2,727
Depreciation and amortization	1
Operating earnings	(2,549)	(2,727)
Earnings before provision for income taxes	(2,549)	(2,727)
Provision (benefit) for income taxes	(990)	(1,059)
Equity in earnings of subsidiaries, net of tax	57,385	43,911
Net earnings	55,826	42,243
Total comprehensive income	55,826	42,243
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc.
Condensed Consolidating Statement of Earnings and Comprehensive Income
Selling, general and administrative expenses	137	67
Operating earnings	(137)	(67)
Interest expense	26,749	63,919
Earnings before provision for income taxes	(26,886)	(63,986)
Provision (benefit) for income taxes	(10,443)	(24,853)
Equity in earnings of subsidiaries, net of tax	73,828	83,044
Net earnings	57,385	43,911
Total comprehensive income	57,385	43,911
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Consolidating Statement of Earnings and Comprehensive Income
Net sales	816,051	806,193
Related party sales	748	767
Cost of products sold and distribution expenses	411,323	400,442
Gross profit	405,476	406,518
Selling, general and administrative expenses	275,665	267,187
Depreciation and amortization	21,059	17,648
Operating earnings	108,752	121,683
Interest expense		2
Earnings before provision for income taxes	108,752	121,681
Provision (benefit) for income taxes	41,998	46,764
Equity in earnings of subsidiaries, net of tax	7,074	8,127
Net earnings	73,828	83,044
Total comprehensive income	73,828	83,044
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Earnings and Comprehensive Income
Net sales	183,558	191,839
Cost of products sold and distribution expenses	97,326	104,308
Gross profit	86,232	87,531
Selling, general and administrative expenses	69,062	69,747
Depreciation and amortization	5,779	5,738
Operating earnings	11,391	12,046
Interest expense	50	22
Earnings before provision for income taxes	11,341	12,024
Provision (benefit) for income taxes	4,267	3,897
Net earnings	7,074	8,127
Other comprehensive income (loss), net of tax	(18,668)	(10,221)
Total comprehensive income	(11,594)	(2,094)
Consolidating Eliminations
Condensed Consolidating Statement of Earnings and Comprehensive Income
Related party sales	(748)	(767)
Cost of products sold and distribution expenses	(748)	(767)
Equity in earnings of subsidiaries, net of tax	(138,287)	(135,082)
Net earnings	(138,287)	(135,082)
Total comprehensive income	$ (138,287)	$ (135,082)

Parent, Issuers, Guarantor an53

Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	$ 90,453	$ 69,129
Cash Flows from Investing Activities:
Capital expenditures, net of proceeds from sale of property and equipment	(28,008)	(40,575)
Acquisitions, net of cash acquired		(2,250)
Net cash used by investing activities	(28,008)	(42,825)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	58,500	800,000
Repayments of long-term debt	(58,674)	(825,971)
Repurchases of common stock	(66,963)	(62,367)
Debt issuance costs		(12,709)
Proceeds from exercises of stock options	14,280	2,716
Excess tax benefit/shortfall from share-based compensation	(879)	95
Net cash used by financing activities	(53,736)	(98,236)
Effect of foreign exchange rate changes on cash and cash equivalents	(921)	(659)
Net increase (decrease) in cash and cash equivalents	7,788	(72,591)
Cash and cash equivalents, beginning of period	86,622	140,038
Cash and cash equivalents, end of period	94,410	67,447
Reportable Legal Entities | Parent
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	27,962	59,556
Cash Flows from Financing Activities:
Repurchases of common stock	(66,963)	(62,367)
Proceeds from exercises of stock options	14,280	2,716
Due to affiliates	25,600
Excess tax benefit/shortfall from share-based compensation	(879)	95
Net cash used by financing activities	(27,962)	(59,556)
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc.
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	(41,347)	(7,509)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	58,500	800,000
Repayments of long-term debt	(58,500)	(825,785)
Debt issuance costs		(12,709)
Due to affiliates	31,418
Net cash used by financing activities	31,418	(38,494)
Net increase (decrease) in cash and cash equivalents	(9,929)	(46,003)
Cash and cash equivalents, beginning of period	28,372	46,003
Cash and cash equivalents, end of period	18,443
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	104,449	5,195
Cash Flows from Investing Activities:
Capital expenditures, net of proceeds from sale of property and equipment	(20,883)	(34,304)
Acquisitions, net of cash acquired		(2,250)
Due from affiliates	(68,741)
Net cash used by investing activities	(89,624)	(36,554)
Cash Flows from Financing Activities:
Repayments of long-term debt	(4)	(23)
Net cash used by financing activities	(4)	(23)
Net increase (decrease) in cash and cash equivalents	14,821	(31,382)
Cash and cash equivalents, beginning of period	22,368	58,851
Cash and cash equivalents, end of period	37,189	27,469
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	(611)	11,887
Cash Flows from Investing Activities:
Capital expenditures, net of proceeds from sale of property and equipment	(7,125)	(6,271)
Net cash used by investing activities	(7,125)	(6,271)
Cash Flows from Financing Activities:
Repayments of long-term debt	(170)	(163)
Due to affiliates	11,723
Net cash used by financing activities	11,553	(163)
Effect of foreign exchange rate changes on cash and cash equivalents	(921)	(659)
Net increase (decrease) in cash and cash equivalents	2,896	4,794
Cash and cash equivalents, beginning of period	35,882	35,184
Cash and cash equivalents, end of period	38,778	$ 39,978
Consolidating Eliminations
Cash Flows from Investing Activities:
Due from affiliates	68,741
Net cash used by investing activities	68,741
Cash Flows from Financing Activities:
Due to affiliates	(68,741)
Net cash used by financing activities	(68,741)
Consolidating Eliminations | Sally Holdings LLC and Sally Capital Inc.
Cash Flows from Financing Activities:
Cash and cash equivalents, end of period	$ 18,443