Sally Beauty (SBH) 10-Q 4 May 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2017	Apr. 28, 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	Mar. 31, 2017
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		137,436,424
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

Consolidated Statements of Earn

Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Consolidated Statements of Earnings
Net sales	$ 966,470	$ 980,067	$ 1,966,080	$ 1,978,099
Cost of products sold and distribution expenses	478,364	492,593	986,266	996,576
Gross profit	488,106	487,474	979,814	981,523
Selling, general and administrative expenses	331,979	341,311	679,392	681,039
Depreciation and amortization	27,878	23,705	54,716	47,091
Restructuring charges	9,211		9,211
Operating earnings	119,038	122,458	236,495	253,393
Interest expense	26,848	26,971	53,646	90,914
Earnings before provision for income taxes	92,190	95,487	182,849	162,479
Provision for income taxes	35,198	35,328	70,031	60,077
Net earnings	$ 56,992	$ 60,159	$ 112,818	$ 102,402
Earnings per share:
Basic (in dollars per share)	$ 0.41	$ 0.41	$ 0.79	$ 0.69
Diluted (in dollars per share)	$ 0.40	$ 0.41	$ 0.79	$ 0.68
Weighted average shares:
Basic (in shares)	140,549	146,447	142,107	148,628
Diluted (in shares)	141,325	148,360	143,047	150,353

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Consolidated Statements of Comprehensive Income
Net earnings	$ 56,992	$ 60,159	$ 112,818	$ 102,402
Other comprehensive income (loss):
Foreign currency translation adjustments	8,026	8,149	(10,642)	(2,072)
Total other comprehensive income (loss), before tax	8,026	8,149	(10,642)	(2,072)
Other comprehensive income (loss), net of tax	8,026	8,149	(10,642)	(2,072)
Total comprehensive income	$ 65,018	$ 68,308	$ 102,176	$ 100,330

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Current assets:
Cash and cash equivalents	$ 49,119	$ 86,622
Trade accounts receivable, less allowance for doubtful accounts of $1,247 at March 31, 2017 and $1,407 at September 30, 2016	44,801	46,942
Accounts receivable, other	33,878	37,041
Inventory	917,291	907,337
Other current assets	41,551	54,861
Deferred income tax assets	39,897	40,024
Total current assets	1,126,537	1,172,827
Property and equipment, net of accumulated depreciation of $506,906 at March 31, 2017 and $467,865 at September 30, 2016	316,790	319,558
Goodwill	528,993	532,714
Intangible assets, excluding goodwill, net of accumulated amortization of $116,749 at March 31, 2017 and $110,713 at September 30, 2016	84,874	92,963
Other assets	13,593	14,001
Total assets	2,070,787	2,132,063
Current liabilities:
Current maturities of long-term debt	6,194	716
Accounts payable	272,283	271,376
Accrued liabilities	187,408	214,584
Income taxes payable	3,099	1,989
Total current liabilities	468,984	488,665
Long-term debt	1,784,026	1,783,294
Other liabilities	17,838	21,614
Deferred income tax liabilities, net	120,530	114,656
Total liabilities	2,391,378	2,408,229
Stockholders' deficit:
Common stock, $0.01 par value. Authorized 500,000 shares; 138,843 and 144,842 shares issued and 138,594 and 144,571 shares outstanding at March 31, 2017 and September 30, 2016, respectively	1,386	1,446
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued
Accumulated deficit	(211,284)	(177,561)
Accumulated other comprehensive loss, net of tax	(110,693)	(100,051)
Total stockholders' deficit	(320,591)	(276,166)
Total liabilities and stockholders' deficit	$ 2,070,787	$ 2,132,063

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Consolidated Balance Sheets
Trade accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,247	$ 1,407
Property and equipment, accumulated depreciation (in dollars)	506,906	467,865
Intangible assets, excluding goodwill, accumulated amortization (in dollars)	$ 116,749	$ 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	138,843	144,842
Common stock, shares outstanding	138,594	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	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities:
Net earnings	$ 112,818	$ 102,402
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	54,716	47,091
Share-based compensation expense	6,212	7,173
Amortization of deferred financing costs	1,577	1,679
Excess tax (benefit) shortfall from share-based compensation	351	(1,029)
Loss on extinguishment of debt		33,296
Deferred income taxes	4,321	14,441
Changes in (exclusive of effects of acquisitions):
Trade accounts receivable	1,376	2,172
Accounts receivable, other	2,898	7,769
Inventory	(14,805)	(17,048)
Other current assets	13,262	(2,856)
Other assets	(427)	(176)
Accounts payable and accrued liabilities	(21,656)	19,812
Income taxes payable	2,503	(352)
Other liabilities	(3,652)	(2,166)
Net cash provided by operating activities	159,494	212,208
Cash Flows from Investing Activities:
Capital expenditures	(49,341)	(73,650)
Proceeds from disposal of property and equipment	21	1,740
Acquisitions, net of cash acquired		(2,250)
Net cash used by investing activities	(49,320)	(74,160)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	136,000	912,000
Repayments of long-term debt	(130,844)	(938,154)
Repurchases of common stock	(168,880)	(162,367)
Debt issuance costs		(12,748)
Proceeds from exercises of stock options	16,683	10,731
Excess tax benefit (shortfall) from share-based compensation	(351)	1,029
Net cash used by financing activities	(147,392)	(189,509)
Effect of foreign exchange rate changes on cash and cash equivalents	(285)	(29)
Net decrease in cash and cash equivalents	(37,503)	(51,490)
Cash and cash equivalents, beginning of period	86,622	140,038
Cash and cash equivalents, end of period	49,119	88,548
Supplemental Cash Flow Information:
Interest paid	51,987	87,201	[1]
Income taxes paid	50,495	47,776
Capital expenditures incurred but not paid	$ 1,301	$ 3,520
[1]	For the six months ended March 31, 2016, 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	6 Months Ended
	Mar. 31, 2016USD ($)
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	6 Months Ended
	Mar. 31, 2017
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 products and supplies through its Sally Beauty Supply retail store and online operations in the U.S., Puerto Rico, Canada, Mexico, Chile, Colombia, Peru, the United Kingdom, Ireland, Belgium, France, Germany, the Netherlands and Spain. In addition, the Company distributes professional beauty products and supplies to salons and salon professionals through its Beauty Systems Group (“BSG”) professional-only store and online operations and through a commissioned direct sales force that services salons in the U.S. and Canada, and to franchisees 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 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 have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). 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 March 31, 2017 and September 30, 2016, its consolidated results of operations for the three and six months ended March 31, 2017 and 2016, and its consolidated cash flows for the six months ended March 31, 2017 and 2016. Certain amounts for the prior fiscal periods 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	6 Months Ended
	Mar. 31, 2017
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 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	6 Months Ended
	Mar. 31, 2017
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. Under the new 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 in 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 pronouncement and does not believe, based on the Company’s preliminary assessment, that its 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 . 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 the consideration to which the entity expects to be entitled in exchange for each of those goods and services. The new standard must be adopted using 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 adoption is permitted. The Company has not yet selected a transition method. 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. 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 must be applied prospectively and provides a narrower framework to be used to determine if a set of assets and activities constitutes a business compared to the framework under the prior guidance and is generally expected to result in greater consistency in the application of ASC Topic 805, Business Combinations . As permitted, the Company adopted ASU 2017-01 in the second 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 January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates step two of the two-step quantitative goodwill impairment test. ASU 2017-04 applies to an entity that elects to use the quantitative method to test goodwill for impairment, but ASU 2017-04 does not eliminate the option to use instead the qualitative method to test goodwill for impairment. Step two of the quantitative impairment test guidance measures the amount of impairment loss and is performed when an entity concludes, as a result of performing step one of the quantitative test, that potential impairment exists. As permitted, the Company adopted ASU 2017-04 in the second 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	6 Months Ended
	Mar. 31, 2017
Fair Value Measurements
Fair Value Measurements	4. Fair Value Measurements The Company’s financial instruments consist of cash equivalents, if any, trade and other accounts receivable, accounts payable, foreign currency derivative instruments and debt. The carrying amounts of cash equivalents, if any, 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. Consistent with the hierarchy contained in ASC 820, the Company categorized certain of its financial assets and liabilities as follows at March 31, 2017 and September 30, 2016 (in thousands): As of March 31, 2017 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) 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 11 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 $1,812.3 million at March 31, 2017 and $1,807.7 million at September 30, 2016, less unamortized debt issuance costs of $22.1 million at March 31, 2017 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 10 for more information about the Company’s debt.

Accumulated Stockholders' Defic

Accumulated Stockholders' Deficit	6 Months Ended
	Mar. 31, 2017
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 six months ended March 31, 2017 and 2016, the Company repurchased and subsequently retired approximately 6.9 million and 6.2 million shares, respectively, of its common stock under the 2014 Share Repurchase Program at an aggregate cost of $168.9 million and $162.4 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 March 31, 2017 and September 30, 2016, accumulated other comprehensive loss consists of cumulative foreign currency translation adjustments of $110.7 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	6 Months Ended
	Mar. 31, 2017
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 Six Months Ended 2017 2016 2017 2016 Net earnings $ $ $ $ Weighted average basic shares Dilutive securities: Stock option and stock award programs Weighted average diluted shares Earnings per share: Basic $ $ $ $ Diluted $ $ $ $ At March 31, 2017 and 2016, options to purchase 5,063,081 shares and 66,573 shares, respectively, of the Company’s common stock were outstanding but not included in the computations of diluted earnings per share for the three months ended March 31, 2017 and 2016, respectively, since these options were anti-dilutive. At March 31, 2017 and 2016, options to purchase 3,306,460 shares and 1,240,603 shares, respectively, of the Company’s common stock were outstanding but not included in the computations of diluted earnings per share for the six months ended March 31, 2017 and 2016, respectively, 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 price per share for the Company’s common stock during the period.

Share-Based Payments

Share-Based Payments	6 Months Ended
	Mar. 31, 2017
Share-Based Payments
Share-Based Payments	7. Share-Based Payments The Company from time to time may grant, subject to approval by the Company’s Board of Directors, 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 Six Months Ended 2017 2016 2017 2016 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 over a specified period of time. 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 six months ended March 31, 2017 and 2016, 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 six months ended March 31, 2017 and 2016, the Company has estimated and recognized compensation expense for each award based on the percentage of the performance targets that the Company deems probable of achievement. The Company’s assessment of the compensation expense, if any, to be ultimately recognized in connection with its performance unit awards is based on currently available information. The compensation expense, if any, ultimately recognized may be significantly different from such estimates. 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 six months ended March 31, 2017: Performance Unit Awards Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 $ Granted Vested — — Forfeited ) Unvested at March 31, 2017 $ The maximum compensation expense to be potentially recognized in connection with all outstanding performance unit awards is approximately $11.5 million, including $1.4 million of cumulative expense recognized prior to March 31, 2017. 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 recipient becomes eligible for retirement, if earlier, in connection with employees eligible to continue vesting awards upon retirement (“retirement-eligible employees”) under the provisions of the 2010 Plan. Stock Option Awards The Company granted approximately 1.5 million service-based stock options to employees during both the six months ended March 31, 2017 and the six months ended March 31, 2016. 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 March 31, 2017 and 2016, respectively, in connection with retirement-eligible employees. Each option has an exercise price equal to the closing market price of the Company’s common stock on the date of grant and has a maximum term of 10 years. Options generally vest ratably over a three or four year period and are generally subject to forfeiture if employment terminates prior to completion of the vesting period, 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 six months ended March 31, 2017: Number of Weighted Weighted Aggregate Outstanding at September 30, 2016 $ $ Granted Exercised ) Forfeited or expired ) Outstanding at March 31, 2017 $ $ Exercisable at March 31, 2017 $ $ The following table summarizes additional information about service-based stock options outstanding at March 31, 2017 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 over a period ending on the date a recipient becomes retirement-eligible, if earlier. The weighted average assumptions relating to the valuation of the Company’s stock options are as follows: Six months ended 2017 2016 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 six months ended March 31, 2017 and 2016 was $6.37 and $6.32 per option, respectively. The aggregate intrinsic value of options exercised during the six months ended March 31, 2017 was $7.2 million. The cash proceeds from these option exercises were $16.7 million and the tax benefit realized from these option exercises was $2.8 million. At March 31, 2017, unrecognized compensation expense related to unvested stock option awards is approximately $11.5 million and is expected to be recognized over the weighted average period of 2.0 years. Restricted Stock Awards The Company granted approximately 22,000 and 40,000 service-based restricted share awards to its employees during the six months ended March 31, 2017 and 2016, respectively. 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 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 recipient 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 six months ended March 31, 2017: Restricted Stock Awards Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 $ Granted Vested ) Forfeited ) Unvested at March 31, 2017 $ At March 31, 2017, unrecognized compensation expense related to unvested restricted stock awards is approximately $2.3 million and is expected to be recognized over the weighted average period of 1.6 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 generally subject to forfeiture if service terminates prior to the vesting of the units. Recipients have no voting rights with respect to unvested RSUs. Under the 2010 Plan, the Company may settle some or all of the vested deferred stock units with shares of the Company’s common stock or in cash. The Company granted approximately 39,000 and 27,000 service-based RSUs to its non-employee directors during the six months ended March 31, 2017 and 2016, respectively. 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 six months ended March 31, 2017: Restricted Stock Units Number of Shares Weighted Average Weighted Average Unvested at September 30, 2016 — $ — — Granted Vested — — Forfeited — — Unvested at March 31, 2017 $ At March 31, 2017, unrecognized compensation expense related to unvested RSUs is approximately $0.5 million and is expected to be recognized over the weighted average period of 0.5 years.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets
Goodwill and Intangible Assets	8. Goodwill and Intangible Assets During the three months ended March 31, 2017, the Company completed its annual assessment for impairment of goodwill. No impairment losses were recognized in the current or prior periods presented in connection with the Company’s goodwill. During the three months ended March 31, 2017, the Company also completed its annual assessment for impairment of intangible assets, other than goodwill, including indefinite-lived intangible assets. There were no material impairment losses recognized in the current or prior periods presented in connection with the Company’s intangible assets. For the three months ended March 31, 2017 and 2016, amortization expense was $3.2 million and $3.4 million, respectively, and, for both the six months ended March 31, 2017 and the six months ended March 31, 2016, amortization expense was $6.8 million.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Mar. 31, 2017
Commitments and Contingencies
Commitments and Contingencies	9. 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. As of September 30, 2016, the Company had an aggregate accrued liability relating to the data security incidents of $15.6 million. During the six months ended March 31, 2017 and 2016, selling, general and administrative expenses reflect expenses of less than $0.1 million and $1.2 million, respectively, related to the data security incidents. In addition, during the three months ended March 31, 2017, the Company made payments against prior assessments by two payment card networks in connection with the data security incidents in the aggregate amount of $12.7 million. Accordingly, as of March 31, 2017, the Company had a remaining accrued liability relating to the data security incidents of $2.9 million. 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. Estimates related to these claims may continue to change as new information becomes available or circumstances change. Please see Note 15 for more information about the data security incidents. 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 March 31, 2017, the scope of these additional costs and expenses, or a range thereof, beyond amounts management has determined to be probable, cannot be reasonably estimated and, while the Company does not anticipate these additional costs and expenses or liabilities would have a material adverse impact on its 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	6 Months Ended
	Mar. 31, 2017
Short-term Borrowings and Long-term Debt
Short-term Borrowings and Long-term Debt	10. Short-term Borrowings and Long-term Debt 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. The ABL facility matures in July 2018. At March 31, 2017, there were borrowings of $5.5 million outstanding under the ABL facility and the Company had $474.5 million available for borrowing under the ABL facility, including the Canadian sub-facility. Details of long-term debt as of March 31, 2017 and September 30, 2016 are as follows (dollars in thousands): March 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 March 31, 2017 and September 30, 2016, unamortized debt issuance costs of $1.1 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 $5.1 million and $5.6 million as of March 31, 2017 and September 30, 2016, respectively, related to notes with an aggregate principal amount of $150.0 million of the senior notes due June 2022. Maturities of the Company’s long-term debt are as follows as of March 31, 2017 (in thousands): Twelve months ending March 31: 2018-2022 $ Thereafter $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net Less: current maturities Total long-term debt $

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities	6 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities	11. 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) 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 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 March 31, 2017, our exposure to interest rate fluctuations relates to interest payments, if any, under the ABL facility and the Company held no derivative instruments in connection therewith. As of March 31, 2017, 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 March 31, 2017, 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 March 31, 2017, the Company holds foreign currency forward contracts that enable it to sell approximately €8.0 million ($8.5 million, at the March 31, 2017 exchange rate) at a weighted average contractual EUR-USD exchange rate of 1.1267. The foreign currency forward contracts discussed in this paragraph are with a single counterparty and expire ratably through September 15, 2017. The Company also uses foreign exchange contracts to manage the exposure to the U.S. dollar resulting from purchases of merchandise, primarily from third-party suppliers, by the Company’s subsidiary in Mexico. Such subsidiary’s functional currency is the Mexican Peso. As such, at March 31, 2017, the Company holds foreign currency forward contracts that enables it to sell approximately MXN370.0 million ($19.8 million, at the March 31, 2017 exchange rate) at a weighted average contractual USD-MXN exchange rate of 21.7629. The foreign currency forward contracts discussed in this paragraph are with a single counterparty (not the same counterparty as that on the forward contracts discussed in the preceding paragraph) and expire ratably through September 29, 2017. In addition, the Company 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 March 31, 2017, the Company holds: (a) a foreign currency forward contract that enables it to sell approximately €6.5 million ($7.0 million, at the March 31, 2017 exchange rate) at a contractual EUR-USD exchange rate of 1.0732, (b) a foreign currency forward contract that enables it to sell approximately CAD7.3 million ($5.5 million, at the March 31, 2017 exchange rate) at a contractual USD-CAD exchange rate of 1.3305, (c) a foreign currency forward contract that enables it to buy approximately CAD3.5 million ($2.6 million, at the March 31, 2017 exchange rate) at a contractual USD-CAD exchange rate of 1.3291 and (d) a foreign currency forward contract that enables it to buy approximately £0.2 million ($0.3 million, at the March 31, 2017 exchange rate) at a contractual GBP-USD exchange rate of 1.2510. All the foreign currency forward contracts discussed in this paragraph are with a single counterparty (not the same counterparty as that on the forward contracts discussed in the two preceding paragraphs) and expire on or before June 30, 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. Selling, general and administrative expenses reflect a net loss of $2.4 million and $1.6 million for the three months ended March 31, 2017 and 2016, respectively, and, for the six months ended March 31, 2017 and March 31, 2016, a net loss of $0.6 million 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 and their classification on the Company’s consolidated balance sheets as of March 31, 2017 and September 30, 2016 (in thousands): Asset Derivatives Liability Derivatives Classification March 31, September 30, Classification March 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 March 31, 2017 and 2016 (in thousands): Derivatives Designated as Hedging Amount of Gain or (Loss) Recognized Amount of Gain or (Loss) Reclassified from None Classification of Gain or Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging (Loss) Recognized into Three Months Ended March 31, Instruments Income 2017 2016 Foreign exchange contracts Selling, general and administrative expenses $ ) $ ) The table below presents the effect of the Company’s derivative financial instruments on the Company’s consolidated statements of earnings for the six months ended March 31, 2017 and 2016 (in thousands): Derivatives Designated as Hedging Amount of Gain or (Loss) Recognized Amount of Gain or (Loss) Reclassified from None Classification of Gain or Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging (Loss) Recognized into Six Months Ended March 31, Instruments Income 2017 2016 Foreign exchange contracts Selling, general and administrative expenses $ ) $ ) Credit-risk-related Contingent Features At March 31, 2017, the aggregate fair value of all foreign exchange contracts held which consisted of derivative instruments in a liability position was $2.5 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	6 Months Ended
	Mar. 31, 2017
Business Segments
Business Segments	12. Business Segments The Company’s business is organized into two operating and reporting segments: (i) Sally Beauty Supply, a domestic and international chain of retail stores and a consumer-facing ecommerce website that offers professional beauty products and supplies to both retail customers and salon professionals primarily in North America, Puerto Rico, and parts of Europe and South America and (ii) Beauty Systems Group (“BSG”), including its franchise-based business Armstrong McCall, a full service distributor of beauty products and supplies that offers professional beauty products directly to salons and salon professionals through its professional-only stores, ecommerce websites and its own sales force 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 and six months ended March 31, 2017 and 2016. Segment data for the three and six months ended March 31, 2017 and 2016 is as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 (a) 2017 2016 (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) ) ) ) ) Restructuring charges ) — ) — Share-based compensation expense ) ) ) ) Interest expense (c) ) ) ) ) Earnings before provision for income taxes $ $ $ $ (a) Certain amounts for the prior fiscal periods 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 six months ended March 31, 2016, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company’s December 2015 redemption of certain senior notes.

Parent, Issuers, Guarantor and

Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements	6 Months Ended
	Mar. 31, 2017
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements	13. Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements The following consolidating financial information presents the condensed consolidating balance sheets as of March 31, 2017 and September 30, 2016, the related condensed consolidating statements of earnings and comprehensive income for the three and six months ended March 31, 2017 and 2016, and the condensed consolidating statements of cash flows for the six months ended March 31, 2017 and 2016 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. Condensed Consolidating Balance Sheet March 31, 2017 (In thousands) 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 September 30, 2016 (In thousands) 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 Statement of Earnings and Comprehensive Income (In thousands) 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 — — Restructuring charges — — — — Operating earnings (loss) ) ) — Interest expense (income) — — ) — 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, net of tax — — — — Total comprehensive income (loss) $ $ $ $ $ ) $ Condensed Consolidating Statement of Earnings and Comprehensive Income (In thousands) 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, net of tax — — — — Total comprehensive income (loss) $ $ $ $ $ ) $ Condensed Consolidating Statement of Earnings and Comprehensive Income (In thousands) 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 — — Restructuring charges — — — — Operating earnings (loss) ) ) — Interest expense (income) — ) — 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 (In thousands) 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 Cash Flows (In thousands) Parent Sally Holdings Guarantor Non- 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 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 (In thousands) Parent Sally Holdings Guarantor Non- 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 in cash and cash equivalents — ) ) ) — ) Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period$ — $ — $ $ $ — $

Restructuring Plan

Restructuring Plan	6 Months Ended
	Mar. 31, 2017
Restructuring Plan
Restructuring Plan	14. Restructuring Plan In January 2017, the Company’s Board of Directors (the “Board”) approved a comprehensive restructuring plan (the “Restructuring Plan”) for the Company’s businesses that included a number of organizational efficiency initiatives and other cost reduction opportunities. The Restructuring Plan comprises the closure of four administrative offices in the U.S. and Canada, reductions in both salaried and hourly workforce and certain other cost reduction activities. The Company had initially estimated that it would incur total aggregate charges of approximately $12 million to $14 million in connection with the Restructuring Plan. On April 27, 2017, the Company expanded the restructuring initiatives contemplated by the Restructuring Plan and it now estimates that it will incur total aggregate charges of approximately $14 million to $16 million. The remaining costs of between approximately $5.0 million and $7.0 million relate to the planned facility closures and to other cost reduction activities, and are expected to be recognized during the second half of the Company’s fiscal year ending September 30, 2017. The remaining estimated costs are associated with Sally Beauty Supply (approximately $4.0 million) and BSG (approximately $3.0 million). Certain information about the Restructuring Plan as of March 31, 2017 is as follows (in thousands): Restructuring Activity Liability at Expenses (1) Cost Paid Liability at Employee terminations $ — $ $ $ Facility closures — — — — Other — Total $ — $ $ $ (1) Expenses include costs incurred in connection with Sally Beauty Supply ($5.8 million), BSG ($2.6 million) and corporate ($0.8 million) activities. (2) Unpaid costs are included in Accrued liabilities in our Consolidated Balance Sheet at March 31, 2017.

Subsequent Event

Subsequent Event	6 Months Ended
	Mar. 31, 2017
Subsequent Event
Subsequent Event	15. Subsequent Event In April 2017, the Company entered into agreements pursuant to which all existing claims and assessments by certain payment card networks were settled. The Company expects to incur additional costs and expenses related to the data security incidents in the future, including assessments by other payment card networks, and will assess any additional potential losses in connection with the data security incidents as new information becomes available or circumstances change.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Mar. 31, 2017
Fair Value Measurements
Schedule of financial assets and liabilities by fair value hierarchy	Consistent with the hierarchy contained in ASC 820, the Company categorized certain of its financial assets and liabilities as follows at March 31, 2017 and September 30, 2016 (in thousands): As of March 31, 2017 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) 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 11 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 $1,812.3 million at March 31, 2017 and $1,807.7 million at September 30, 2016, less unamortized debt issuance costs of $22.1 million at March 31, 2017 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 10 for more information about the Company’s debt.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Mar. 31, 2017
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 Six Months Ended 2017 2016 2017 2016 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)	6 Months Ended
	Mar. 31, 2017
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 Six Months Ended 2017 2016 2017 2016 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 March 31, 2017 $
Summary of activity for stock option awards	Number of Weighted Weighted Aggregate Outstanding at September 30, 2016 $ $ Granted Exercised ) Forfeited or expired ) Outstanding at March 31, 2017 $ $ Exercisable at March 31, 2017 $ $
Summary of stock options by range of exercise prices	The following table summarizes additional information about service-based stock options outstanding at March 31, 2017 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	Six months ended 2017 2016 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 March 31, 2017 $
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 March 31, 2017 $

Short-term Borrowings and Lon26

Short-term Borrowings and Long-term Debt (Tables)	6 Months Ended
	Mar. 31, 2017
Short-term Borrowings and Long-term Debt
Summary of long-term debt	Details of long-term debt as of March 31, 2017 and September 30, 2016 are as follows (dollars in thousands): March 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 March 31, 2017 and September 30, 2016, unamortized debt issuance costs of $1.1 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 $5.1 million and $5.6 million as of March 31, 2017 and September 30, 2016, respectively, related to 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 March 31, 2017 (in thousands): Twelve months ending March 31: 2018-2022 $ Thereafter $ Plus: capital lease obligations Less: unamortized debt issuance costs and premium, net Less: current maturities Total long-term debt $

Derivative Instruments and He27

Derivative Instruments and Hedging Activities (Tables)	6 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities
Schedule of fair value of derivative financial instruments and their classification on consolidated balance sheets	The table below presents the fair value of the Company’s derivative financial instruments and their classification on the Company’s consolidated balance sheets as of March 31, 2017 and September 30, 2016 (in thousands): Asset Derivatives Liability Derivatives Classification March 31, September 30, Classification March 31, September 30, Derivatives designated as hedging instruments: None Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets $ $ — Accrued liabilities $ $ $ $ — $ $
Schedule of derivative financial instruments on consolidated statements 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 March 31, 2017 and 2016 (in thousands): Derivatives Designated as Hedging Amount of Gain or (Loss) Recognized Amount of Gain or (Loss) Reclassified from None Classification of Gain or Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging (Loss) Recognized into Three Months Ended March 31, Instruments Income 2017 2016 Foreign exchange contracts Selling, general and administrative expenses $ ) $ ) The table below presents the effect of the Company’s derivative financial instruments on the Company’s consolidated statements of earnings for the six months ended March 31, 2017 and 2016 (in thousands): Derivatives Designated as Hedging Amount of Gain or (Loss) Recognized Amount of Gain or (Loss) Reclassified from None Classification of Gain or Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging (Loss) Recognized into Six Months Ended March 31, Instruments Income 2017 2016 Foreign exchange contracts Selling, general and administrative expenses $ ) $ )

Business Segments (Tables)

Business Segments (Tables)	6 Months Ended
	Mar. 31, 2017
Business Segments
Schedule of segment data	Segment data for the three and six months ended March 31, 2017 and 2016 is as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 (a) 2017 2016 (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) ) ) ) ) Restructuring charges ) — ) — Share-based compensation expense ) ) ) ) Interest expense (c) ) ) ) ) Earnings before provision for income taxes $ $ $ $ (a) Certain amounts for the prior fiscal periods 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 six months ended March 31, 2016, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company’s December 2015 redemption of certain senior notes.

Parent, Issuers, Guarantor an29

Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements (Tables)	6 Months Ended
	Mar. 31, 2017
Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements
Schedule of Condensed Consolidating Balance Sheet	Condensed Consolidating Balance Sheet March 31, 2017 (In thousands) 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 September 30, 2016 (In thousands) 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 (In thousands) 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 — — Restructuring charges — — — — Operating earnings (loss) ) ) — Interest expense (income) — — ) — 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, net of tax — — — — Total comprehensive income (loss) $ $ $ $ $ ) $ Condensed Consolidating Statement of Earnings and Comprehensive Income (In thousands) 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, net of tax — — — — Total comprehensive income (loss) $ $ $ $ $ ) $ Condensed Consolidating Statement of Earnings and Comprehensive Income (In thousands) 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 — — Restructuring charges — — — — Operating earnings (loss) ) ) — Interest expense (income) — ) — 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 (In thousands) 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 (In thousands) Parent Sally Holdings Guarantor Non- 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 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 (In thousands) Parent Sally Holdings Guarantor Non- 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 in cash and cash equivalents — ) ) ) — ) Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period$ — $ — $ $ $ — $

Restructuring Plan (Tables)

Restructuring Plan (Tables)	6 Months Ended
	Mar. 31, 2017
Restructuring Plan
Schedule of restructuring plan	Certain information about the Restructuring Plan as of March 31, 2017 is as follows (in thousands): Restructuring Activity Liability at Expenses (1) Cost Paid Liability at Employee terminations $ — $ $ $ Facility closures — — — — Other — Total $ — $ $ $ (1) Expenses include costs incurred in connection with Sally Beauty Supply ($5.8 million), BSG ($2.6 million) and corporate ($0.8 million) activities. (2) Unpaid costs are included in Accrued liabilities in our Consolidated Balance Sheet at March 31, 2017.

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Liabilities
Unamortized debt issuance costs	$ 16,964	$ 18,113
Fair value measurement on recurring basis | Total
Assets
Total assets	460
Liabilities
Long-term debt (b)	1,831,934	1,899,748
Total liabilities	1,834,420	1,900,020
Foreign exchange contracts | Fair value measurement on recurring basis | Total
Assets
Foreign exchange contracts (a)	460
Liabilities
Foreign exchange contracts (a)	2,486	272
Level 1 | Fair value measurement on recurring basis
Liabilities
Long-term debt (b)	1,824,750	1,897,625
Total liabilities	1,824,750	1,897,625
Level 2 | Fair value measurement on recurring basis
Assets
Total assets	460
Liabilities
Long-term debt (b)	7,184	2,123
Total liabilities	9,670	2,395
Level 2 | Foreign exchange contracts | Fair value measurement on recurring basis
Assets
Foreign exchange contracts (a)	460
Liabilities
Foreign exchange contracts (a)	2,486	272
ABL facility
Liabilities
Long-term debt (b)	1,812,300	1,807,700
Unamortized debt issuance costs	$ 22,100	$ 23,700

Accumulated Stockholders' Def32

Accumulated Stockholders' Deficit - Share Repurchase Program (Details) - 2014 Share Repurchase Program - USD ($) shares in Millions, $ in Millions	1 Months Ended	6 Months Ended
	Aug. 31, 2014	Mar. 31, 2017	Mar. 31, 2016
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)		6.9	6.2
Cost of repurchase and retirement of common stock		$ 168.9	$ 162.4

Accumulated Stockholders' Def33

Accumulated Stockholders' Deficit - Accumulated other comprehensive loss (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Accumulated Stockholders' Equity (Deficit)
Accumulated other comprehensive loss	$ 110,693	$ 100,051
Foreign currency translation adjustments
Accumulated Stockholders' Equity (Deficit)
Accumulated other comprehensive loss	110,700	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		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share Reconciliation:
Net earnings	$ 56,992	$ 60,159	$ 112,818	$ 102,402
Weighted average basic shares	140,549,000	146,447,000	142,107,000	148,628,000
Dilutive securities:
Stock option and stock award programs (in shares)	776,000	1,913,000	940,000	1,725,000
Weighted average diluted shares	141,325,000	148,360,000	143,047,000	150,353,000
Earnings per share:
Basic (in dollars per share)	$ 0.41	$ 0.41	$ 0.79	$ 0.69
Diluted (in dollars per share)	$ 0.40	$ 0.41	$ 0.79	$ 0.68
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)	5,063,081	66,573	3,306,460	1,240,603

Share-Based Payments (Details)

Share-Based Payments (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Share-Based Payments
Common stock approved for issuance under share-based compensation plan (in shares)	29.8		29.8
Share-based compensation expense (in dollars)	$ 2,398	$ 2,985	$ 6,212	$ 7,173
Income tax benefit related to share-based compensation expense	$ 887	$ 1,118	$ 2,326	$ 2,707

Share-Based Payments - Performa

Share-Based Payments - Performance-Based Awards (Details) - performance units $ / shares in Units, $ in Millions	6 Months Ended		12 Months Ended
	Mar. 31, 2017USD ($)item$ / sharesshares	Mar. 31, 2016shares	Sep. 30, 2016$ / sharesshares
Share-Based Payments
Expected life (in years)	3 years
Number of performance targets | item	2
Performance Unit Awards (in shares)
Unvested at the beginning of the period (in shares) | shares	132,000
Granted (in shares) | shares	146,000	152,000
Forfeited (in shares) | shares	(44,000)
Unvested at the end of the period (in shares) | shares	234,000		132,000
Performance Unit 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	24.30
Unvested at the end of the period (in dollars per share) | $ / shares	$ 24.59		$ 23.45
Performance Unit Awards (in years)
Weighted Average Remaining Vesting Term (in Years)	2 years		2 years
Compensation expense Potentially recognized | $	$ 11.5
Cumulative compensation expense recognized prior to period | $	$ 1.4
Minimum
Share-Based Payments
Percentage of target shares	0.00%
Maximum
Share-Based Payments
Percentage of target shares	200.00%

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	6 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Share-Based Payments
Accelerated expense related to certain retirement eligible employees (in dollars)	$ 1,300	$ 1,100
Stock Options, Number of Outstanding Options
Outstanding at the beginning of the period (in shares)		5,584
Granted (in shares)		1,457	1,500
Exercised (in shares)		(892)
Forfeited or expired (in shares)		(332)
Outstanding at the end of the period (in shares)		5,817		5,584
Exercisable at the end of the period (in shares)		2,894
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)		18.70
Forfeited or expired (in dollars per share)		25.90
Outstanding at the end of the period (in dollars per share)		24.10		$ 22.95
Exercisable at the end of the period (in dollars per share)		$ 22.50
Stock Options, Weighted Average Remaining Contractual Term
Weighted average remaining contractual term (in years)		6 years 3 months 18 days		6 years 1 month 6 days
Exercisable at the end of the period (in years)		4 years 8 months 12 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)		5,074		$ 19,615
Exercisable at the end of the period (in dollars)		$ 5,074
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	6 Months Ended
	Mar. 31, 2017$ / sharesshares
Options Outstanding
Range of Exercise Prices, Number of Options Outstanding (in shares) | shares	5,817
Range of Exercise Prices, Weighted Average Remaining Contractual Term	6 years 3 months 18 days
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 24.10
Options Exercisable
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares	2,894
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 22.50
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	754
Range of Exercise Prices, Weighted Average Remaining Contractual Term	3 years 2 months 12 days
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 13.71
Options Exercisable
Range of Exercise Prices, Number of Options Exercisable (in shares) | shares	754
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 13.71
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	1,757
Range of Exercise Prices, Weighted Average Remaining Contractual Term	6 years 6 months
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	1,008
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	3,306
Range of Exercise Prices, Weighted Average Remaining Contractual Term	6 years 10 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	1,132
Range of Exercise Prices, Weighted Average Exercise Price (in dollars per share)	$ 27.48

Share-Based Payments - Schedule

Share-Based Payments - Schedule of weighted average assumptions for valuation of stock options (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Stock option disclosures
Proceeds from exercises of stock options	$ 16,683	$ 10,731
Stock Option Awards
Weighted average assumptions relating to the valuation of stock options
Expected life (in years)	5 years	5 years
Expected volatility for the Company's common stock (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	$ 6.32
Aggregate intrinsic value of options exercised	$ 7,200
Proceeds from exercises of stock options	16,700
Tax benefit realized for the tax deductions of stock option exercises	2,800
Total unrecognized compensation expenses related to unvested awards	$ 11,500
Weighted average period for recognition of unvested awards	2 years

Share-Based Payments - Restrict

Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards - USD ($) $ / shares in Units, $ in Millions	6 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Restricted stock (in shares)
Unvested at the beginning of the period (in shares)	271,000
Granted (in shares)	22,000	40,000
Vested (in shares)	(31,000)
Forfeited (in shares)	(13,000)
Unvested at the end of the period (in shares)	249,000		271,000
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)	23.52
Forfeited (in dollars per share)	27.77
Unvested at the end of the period (in dollars per share)	$ 27.11		$ 26.80
Restricted stock (in years)
Weighted Average Remaining Vesting Term (in Years)	1 year 7 months 6 days		1 year 10 months 24 days
Total unrecognized compensation expenses related to unvested awards	$ 2.3
Weighted average period for recognition of unvested awards	1 year 7 months 6 days
Minimum
Stock Awards
Vesting period	3 years
Maximum
Stock Awards
Vesting period	5 years

Share-Based Payments - Restri41

Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Stock Awards
Restricted stock units, retention period	6 months
Restricted stock (in shares)
Granted (in shares)	39,000	27,000
Unvested at the end of the period (in shares)	39,000
Restricted Stock (in dollars per share)
Granted (in dollars per share)	$ 25.53
Unvested at the end of the period (in dollars per share)	$ 25.53
Restricted stock (in years)
Weighted Average Remaining Vesting Term (in Years)	6 months
Total unrecognized compensation expenses related to unvested awards	$ 0.5
Weighted average period for recognition of unvested awards	6 months
Maximum
Stock Awards
Vesting period	1 year

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Goodwill and Intangible Assets
Impairment losses in connection with the goodwill	$ 0	$ 0	$ 0	$ 0
Impairment losses in connection with the intangible assets	0	0	0	0
Amortization expense	$ 3.2	$ 3.4	$ 6.8	$ 6.8

Commitments and Contingencies -

Commitments and Contingencies - Other Contingencies (Details) - Data security incidents $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2017USD ($)plaintiff	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	Sep. 30, 2016USD ($)
Commitments and contingencies
Number of payment card networks which made claims against the company | plaintiff	2
Accrued liability related to loss contingency	$ 2.9	$ 2.9		$ 15.6
Accrued liability Payment	$ 12.7
Selling, general and administrative expenses
Commitments and contingencies
Data security incident expenses		$ 0.1	$ 1.2

Short-term Borrowings and Lon44

Short-term Borrowings and Long-term Debt - ABL Facility and Canadian sub-facility (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2016	Mar. 31, 2017
ABL facility
Debt Instruments
Outstanding borrowings		$ 5.5
Remaining credit facility available		$ 474.5
ABL facility | Sally Holdings, LLC
Debt Instruments
Revolving credit facility	$ 500
Line of credit facility term	5 years
Canadian sub-facility
Debt Instruments
Revolving credit facility	$ 25

Short-term Borrowings and Lon45

Short-term Borrowings and Long-term Debt - Details of Long-term Debt Table (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Debt Instruments
Total	$ 1,805,500	$ 1,800,000
ABL facility
Debt Instruments
Total	$ 5,500
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 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 Lon46

Short-term Borrowings and Long-term Debt - Details of Long-term Debt Table - Total debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Short-term Borrowings and Long-term Debt
Total	$ 1,805,500	$ 1,800,000
Plus: capital lease obligations	1,684	2,123
Less: unamortized debt issuance costs and premium, net	16,964	18,113
Total debt	$ 1,790,220	$ 1,784,010

Short-term Borrowings and Lon47

Short-term Borrowings and Long-term Debt - Details of Long-term Debt Table - Total long-term debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Short-term Borrowings and Long-term Debt
Total debt	$ 1,790,220	$ 1,784,010
Less: current maturities	6,194	716
Total long-term debt	$ 1,784,026	$ 1,783,294

Short-term Borrowings and Lon48

Short-term Borrowings and Long-term Debt - Details of Long-term Debt Table - Subscript Details (Details) - USD ($) $ in Millions	Mar. 31, 2017	Sep. 30, 2016
Debt Instruments
Unamortized premium related to certain notes	$ 5.1	$ 5.6
ABL facility | Other assets
Debt Instruments
Unamortized deferred financing costs	1.1	$ 1.6
Senior notes due Jun. 2022
Debt Instruments
Aggregate principal amount related to certain notes	$ 150

Short-term Borrowings and Lon49

Short-term Borrowings and Long-term Debt - Maturities of the Company's long-term debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Fiscal Year
2018-2022	$ 5,500
Thereafter	1,800,000
Total	1,805,500	$ 1,800,000
Plus: capital lease obligations	1,684	2,123
Less: unamortized debt issuance costs and premium, net	16,964
Less: current maturities	6,194	716
Total long-term debt	$ 1,784,026	$ 1,783,294

Derivative Instruments and He50

Derivative Instruments and Hedging Activities - (Details) - Mar. 31, 2017 € in Millions, £ in Millions, MXN in Millions, CAD in Millions, $ in Millions	MXNderivative	EUR (€)derivative	GBP (£)derivative	USD ($)derivative	CADderivative
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		€ 8		$ 8.5
USD:EUR | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount		€ 6.5		$ 7
EUR:USD | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges To Manage Exposure Of International Subsidiaries Purchases Of Merchandise From Third Party Suppliers
Non-designated Cash Flow Hedges
Weighted average contractual exchange rate (as a percent)	1.1267	1.1267	1.1267	1.1267	1.1267
EUR:USD | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Non-designated Cash Flow Hedges
Contractual exchange rate (as a percent)	1.0732	1.0732	1.0732	1.0732	1.0732
USD:CAD | Sale | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount				$ 5.5	CAD 7.3
Non-designated Cash Flow Hedges
Contractual exchange rate (as a percent)	1.3291	1.3291	1.3291	1.3291	1.3291
USD:CAD | Purchase | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Non-designated Cash Flow Hedges
Contractual exchange rate (as a percent)	1.3305	1.3305	1.3305	1.3305	1.3305
CAD:USD | Purchase | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount				$ 2.6	CAD 3.5
USD:MXN | 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	MXN 370			$ 19.8
Non-designated Cash Flow Hedges
Weighted average contractual exchange rate (as a percent)	21.7629	21.7629	21.7629	21.7629	21.7629
GBP:USD | Purchase | Derivatives not designated as hedging instruments | Cash Flow Hedges In Connection With Intercompany Balances
Derivative Instruments
Notional amount			£ 0.2	$ 0.3
Non-designated Cash Flow Hedges
Contractual exchange rate (as a percent)	1.2510	1.2510	1.2510	1.2510	1.2510

Derivative Instruments and He51

Derivative Instruments and Hedging Activities - Non-designated Cash Flow Hedges (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Derivatives Not Designated as Hedging Instruments
Total derivatives not designated as hedging instruments, Asset	$ 460
Total derivatives not designated as hedging instruments, Liability	2,486	$ 272
Other current assets
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts, Asset	460
Accrued liabilities
Credit-risk-related Contingent Features
Foreign Exchange Contracts, Liability	$ 2,486	$ 272

Derivative Instruments and He52

Derivative Instruments and Hedging Activities - Derivatives Designated as Hedging Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
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	$ 2,400	$ 1,600	600	$ 600
Foreign exchange contracts | Maximum
Credit-risk-related Contingent Features
Aggregate fair value of all foreign exchange contracts held in a liability position	2,500		2,500
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	$ (2,447)	$ (1,640)	$ (632)	$ (599)

Business Segments (Details)

Business Segments (Details) $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)segment	Mar. 31, 2016USD ($)
Segments
Number of operating segments | segment				2
Net sales:
Total net sales		$ 966,470	$ 980,067	$ 1,966,080	$ 1,978,099
Segment operating earnings:
Segment operating earnings		119,038	122,458	236,495	253,393
Restructuring charges		(9,211)		(9,211)
Share-based compensation expense		(2,398)	(2,985)	(6,212)	(7,173)
Interest expense (c)	[1]	(26,848)	(26,971)	(53,646)	(90,914)
Earnings before provision for income taxes		92,190	95,487	182,849	162,479
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
Operating segments
Segment operating earnings:
Segment operating earnings		159,542	163,379	315,668	335,336
Corporate
Segment operating earnings:
Unallocated expenses (b)	[2]	(28,895)	(37,936)	(63,750)	(74,770)
Sally Beauty Supply
Net sales:
Total net sales		575,994	592,998	1,165,853	1,194,437
Segment operating earnings:
Restructuring charges		(5,800)
Sally Beauty Supply | Operating segments
Segment operating earnings:
Segment operating earnings		96,839	102,420	189,365	208,884
Beauty Systems Group
Net sales:
Total net sales		390,476	387,069	800,227	783,662
Segment operating earnings:
Restructuring charges		(2,600)
Beauty Systems Group | Operating segments
Segment operating earnings:
Segment operating earnings		$ 62,703	$ 60,959	$ 126,303	$ 126,452
[1]	For the six months ended March 31, 2016, interest expense includes a loss on extinguishment of debt of $33.3 million in connection with the Company’s December 2015 redemption of certain senior notes.
[2]	Unallocated expenses consist of corporate and shared costs.

Parent, Issuers, Guarantor an54

Parent, Issuers, Guarantor and Non Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016	Mar. 31, 2016	Sep. 30, 2015
Condensed Consolidating Balance Sheet
Percentage of guarantor subsidiaries owned by parent	100.00%
Assets
Cash and cash equivalents	$ 49,119	$ 86,622	$ 88,548	$ 140,038
Trade and other accounts receivable, less allowance for doubtful accounts	78,679	83,983
Inventory	917,291	907,337
Other current assets	41,551	54,861
Deferred income tax assets	39,897	40,024
Property and equipment, net	316,790	319,558
Goodwill and other intangible assets, net	613,867	625,677
Other assets	13,593	14,001
Total assets	2,070,787	2,132,063
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	272,283	271,376
Accrued liabilities	187,408	214,584
Income taxes payable	3,099	1,989
Long-term debt	1,790,220	1,784,010
Other liabilities	17,838	21,614
Deferred income tax liabilities	120,530	114,656
Total liabilities	2,391,378	2,408,229
Total stockholders' (deficit) equity	(320,591)	(276,166)
Total liabilities and stockholders' deficit	2,070,787	2,132,063
Reportable Legal Entities | Parent
Assets
Trade and other accounts receivable, less allowance for doubtful accounts		16
Other current assets	1,887	14,816
Deferred income tax assets	50	50
Property and equipment, net	20	15
Investment in subsidiaries	976,369	870,907
Other assets	1,516	1,515
Total assets	979,842	887,319
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	87	116
Due to affiliates	1,298,540	1,162,045
Accrued liabilities	308	1,324
Income taxes payable	1,673
Deferred income tax liabilities	(175)
Total liabilities	1,300,433	1,163,485
Total stockholders' (deficit) equity	(320,591)	(276,166)
Total liabilities and stockholders' deficit	979,842	887,319
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc.
Assets
Cash and cash equivalents	10	28,372		46,003
Other current assets	161	30
Investment in subsidiaries	3,533,887	3,395,436
Other assets	1,769	2,158
Total assets	3,535,827	3,425,996
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	22	1
Due to affiliates	731,360	736,373
Accrued liabilities	37,904	35,320
Income taxes payable	1,620	1,508
Long-term debt	1,788,536	1,781,887
Deferred income tax liabilities	16
Total liabilities	2,559,458	2,555,089
Total stockholders' (deficit) equity	976,369	870,907
Total liabilities and stockholders' deficit	3,535,827	3,425,996
Reportable Legal Entities | Guarantor Subsidiaries
Assets
Cash and cash equivalents	13,431	22,368	55,215	58,851
Trade and other accounts receivable, less allowance for doubtful accounts	53,317	55,989
Due from affiliates	2,109,731	1,966,505
Inventory	709,676	709,523
Other current assets	25,107	23,864
Deferred income tax assets	35,740	35,740
Property and equipment, net	237,216	239,791
Investment in subsidiaries	351,302	359,193
Goodwill and other intangible assets, net	474,028	479,682
Other assets	(8,111)	(8,090)
Total assets	4,001,437	3,884,565
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	218,661	215,552
Accrued liabilities	118,296	145,661
Long-term debt	8	17
Other liabilities	14,244	17,852
Deferred income tax liabilities	116,341	110,047
Total liabilities	467,550	489,129
Total stockholders' (deficit) equity	3,533,887	3,395,436
Total liabilities and stockholders' deficit	4,001,437	3,884,565
Reportable Legal Entities | Non-Guarantor Subsidiaries
Assets
Cash and cash equivalents	35,678	35,882	$ 33,333	$ 35,184
Trade and other accounts receivable, less allowance for doubtful accounts	25,362	27,978
Inventory	207,615	197,814
Other current assets	14,396	16,151
Deferred income tax assets	4,107	4,234
Property and equipment, net	79,554	79,752
Goodwill and other intangible assets, net	139,839	145,995
Other assets	18,419	18,418
Total assets	524,970	526,224
Liabilities and Stockholders' (Deficit) Equity
Accounts payable	53,513	55,707
Due to affiliates	79,831	68,087
Accrued liabilities	30,900	32,279
Income taxes payable	(194)	481
Long-term debt	1,676	2,106
Other liabilities	3,594	3,762
Deferred income tax liabilities	4,348	4,609
Total liabilities	173,668	167,031
Total stockholders' (deficit) equity	351,302	359,193
Total liabilities and stockholders' deficit	524,970	526,224
Consolidating Eliminations
Assets
Due from affiliates	(2,109,731)	(1,966,505)
Investment in subsidiaries	(4,861,558)	(4,625,536)
Total assets	(6,971,289)	(6,592,041)
Liabilities and Stockholders' (Deficit) Equity
Due to affiliates	(2,109,731)	(1,966,505)
Total liabilities	(2,109,731)	(1,966,505)
Total stockholders' (deficit) equity	(4,861,558)	(4,625,536)
Total liabilities and stockholders' deficit	$ (6,971,289)	$ (6,592,041)

Parent, Issuers, Guarantor an55

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		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Condensed Consolidating Statement of Earnings and Comprehensive Income
Net sales	$ 966,470	$ 980,067	$ 1,966,080	$ 1,978,099
Cost of products sold and distribution expenses	478,364	492,593	986,266	996,576
Gross profit	488,106	487,474	979,814	981,523
Selling, general and administrative expenses	331,979	341,311	679,392	681,039
Depreciation and amortization	27,878	23,705	54,716	47,091
Restructuring charges	9,211		9,211
Operating earnings	119,038	122,458	236,495	253,393
Interest expense (income)	26,848	26,971	53,646	90,914
Earnings before provision for income taxes	92,190	95,487	182,849	162,479
Provision (benefit) for income taxes	35,198	35,328	70,031	60,077
Net earnings	56,992	60,159	112,818	102,402
Other comprehensive income (loss), net of tax	8,026	8,149	(10,642)	(2,072)
Total comprehensive income	65,018	68,308	102,176	100,330
Reportable Legal Entities | Parent
Condensed Consolidating Statement of Earnings and Comprehensive Income
Selling, general and administrative expenses	2,822	2,849	5,370	5,576
Depreciation and amortization	1	1	2	1
Operating earnings	(2,823)	(2,850)	(5,372)	(5,577)
Earnings before provision for income taxes	(2,823)	(2,850)	(5,372)	(5,577)
Provision (benefit) for income taxes	(1,097)	(1,107)	(2,087)	(2,166)
Equity in earnings of subsidiaries, net of tax	58,718	61,902	116,103	105,813
Net earnings	56,992	60,159	112,818	102,402
Total comprehensive income	56,992	60,159	112,818	102,402
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc.
Condensed Consolidating Statement of Earnings and Comprehensive Income
Selling, general and administrative expenses	194	103	331	170
Operating earnings	(194)	(103)	(331)	(170)
Interest expense (income)	26,859	26,947	53,608	90,866
Earnings before provision for income taxes	(27,053)	(27,050)	(53,939)	(91,036)
Provision (benefit) for income taxes	(10,507)	(10,506)	(20,950)	(35,359)
Equity in earnings of subsidiaries, net of tax	75,264	78,446	149,092	161,490
Net earnings	58,718	61,902	116,103	105,813
Total comprehensive income	58,718	61,902	116,103	105,813
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Consolidating Statement of Earnings and Comprehensive Income
Net sales	798,631	809,735	1,614,682	1,615,928
Related party sales	595	615	1,343	1,382
Cost of products sold and distribution expenses	391,398	401,517	802,721	801,959
Gross profit	407,828	408,833	813,304	815,351
Selling, general and administrative expenses	255,675	268,880	531,340	536,067
Depreciation and amortization	21,959	18,003	43,018	35,651
Restructuring charges	9,211		9,211
Operating earnings	120,983	121,950	229,735	243,633
Interest expense (income)		2	(1)	4
Earnings before provision for income taxes	120,983	121,948	229,736	243,629
Provision (benefit) for income taxes	45,799	45,059	87,798	91,823
Equity in earnings of subsidiaries, net of tax	80	1,557	7,154	9,684
Net earnings	75,264	78,446	149,092	161,490
Total comprehensive income	75,264	78,446	149,092	161,490
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Earnings and Comprehensive Income
Net sales	167,839	170,332	351,398	362,171
Cost of products sold and distribution expenses	87,561	91,691	184,888	195,999
Gross profit	80,278	78,641	166,510	166,172
Selling, general and administrative expenses	73,288	69,479	142,351	139,226
Depreciation and amortization	5,918	5,701	11,696	11,439
Operating earnings	1,072	3,461	12,463	15,507
Interest expense (income)	(11)	22	39	44
Earnings before provision for income taxes	1,083	3,439	12,424	15,463
Provision (benefit) for income taxes	1,003	1,882	5,270	5,779
Net earnings	80	1,557	7,154	9,684
Other comprehensive income (loss), net of tax	8,026	8,149	(10,642)	(2,072)
Total comprehensive income	8,106	9,706	(3,488)	7,612
Consolidating Eliminations
Condensed Consolidating Statement of Earnings and Comprehensive Income
Related party sales	(595)	(615)	(1,343)	(1,382)
Cost of products sold and distribution expenses	(595)	(615)	(1,343)	(1,382)
Equity in earnings of subsidiaries, net of tax	(134,062)	(141,905)	(272,349)	(276,987)
Net earnings	(134,062)	(141,905)	(272,349)	(276,987)
Total comprehensive income	$ (134,062)	$ (141,905)	$ (272,349)	$ (276,987)

Parent, Issuers, Guarantor an56

Parent, Issuers, Guarantor and Non-Guarantor Condensed Consolidated Financial Statements - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	$ 159,494	$ 212,208
Cash Flows from Investing Activities:
Capital expenditures, net of proceeds from sale of property and equipment	(49,320)	(71,910)
Acquisitions, net of cash acquired		(2,250)
Net cash used by investing activities	(49,320)	(74,160)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	136,000	912,000
Repayments of long-term debt	(130,844)	(938,154)
Repurchases of common stock	(168,880)	(162,367)
Debt issuance costs		(12,748)
Proceeds from exercises of stock options	16,683	10,731
Excess tax benefit/shortfall from share-based compensation	(351)	1,029
Net cash used by financing activities	(147,392)	(189,509)
Effect of foreign exchange rate changes on cash and cash equivalents	(285)	(29)
Net decrease in cash and cash equivalents	(37,503)	(51,490)
Cash and cash equivalents, beginning of period	86,622	140,038
Cash and cash equivalents, end of period	49,119	88,548
Reportable Legal Entities | Parent
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	16,061	150,609
Cash Flows from Investing Activities:
Capital expenditures, net of proceeds from sale of property and equipment	(8)	(2)
Net cash used by investing activities	(8)	(2)
Cash Flows from Financing Activities:
Repurchases of common stock	(168,880)	(162,367)
Proceeds from exercises of stock options	16,683	10,731
Due to affiliates	136,495
Excess tax benefit/shortfall from share-based compensation	(351)	1,029
Net cash used by financing activities	(16,053)	(150,607)
Reportable Legal Entities | Sally Holdings LLC and Sally Capital Inc.
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	(28,849)	(7,470)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	136,000	912,000
Repayments of long-term debt	(130,500)	(937,785)
Debt issuance costs		(12,748)
Due to affiliates	(5,013)
Net cash used by financing activities	487	(38,533)
Net decrease in cash and cash equivalents	(28,362)	(46,003)
Cash and cash equivalents, beginning of period	28,372	46,003
Cash and cash equivalents, end of period	10
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	171,472	59,202
Cash Flows from Investing Activities:
Capital expenditures, net of proceeds from sale of property and equipment	(37,174)	(60,542)
Acquisitions, net of cash acquired		(2,250)
Due from affiliates	(143,226)
Net cash used by investing activities	(180,400)	(62,792)
Cash Flows from Financing Activities:
Repayments of long-term debt	(9)	(46)
Net cash used by financing activities	(9)	(46)
Net decrease in cash and cash equivalents	(8,937)	(3,636)
Cash and cash equivalents, beginning of period	22,368	58,851
Cash and cash equivalents, end of period	13,431	55,215
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Cash Flows
Net cash provided (used) by operating activities	810	9,867
Cash Flows from Investing Activities:
Capital expenditures, net of proceeds from sale of property and equipment	(12,138)	(11,366)
Net cash used by investing activities	(12,138)	(11,366)
Cash Flows from Financing Activities:
Repayments of long-term debt	(335)	(323)
Due to affiliates	11,744
Net cash used by financing activities	11,409	(323)
Effect of foreign exchange rate changes on cash and cash equivalents	(285)	(29)
Net decrease in cash and cash equivalents	(204)	(1,851)
Cash and cash equivalents, beginning of period	35,882	35,184
Cash and cash equivalents, end of period	35,678	$ 33,333
Consolidating Eliminations
Cash Flows from Investing Activities:
Due from affiliates	143,226
Net cash used by investing activities	143,226
Cash Flows from Financing Activities:
Due to affiliates	(143,226)
Net cash used by financing activities	$ (143,226)

Restructuring Plan (Details)

Restructuring Plan (Details) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Jan. 31, 2017USD ($)Office	Mar. 31, 2017USD ($)	Mar. 31, 2017USD ($)	Sep. 30, 2017USD ($)	Apr. 27, 2017USD ($)
Restructuring Plan
Number of administrative offices closed | Office	4
Changes in restructuring reserve
Expenses		$ 9,211	$ 9,211
Cost paid		6,562
Restructuring reserve, ending balance		2,649	2,649
Minimum
Restructuring Plan
Total estimated aggregate charges	$ 12,000				$ 14,000
Maximum
Restructuring Plan
Total estimated aggregate charges	$ 14,000				16,000
Employee terminations
Changes in restructuring reserve
Expenses		8,483
Cost paid		6,322
Restructuring reserve, ending balance		2,161	2,161
Facility closures
Restructuring Plan
Estimated remaining cost				$ 5,000
Other
Restructuring Plan
Estimated remaining cost				$ 7,000
Changes in restructuring reserve
Expenses		728
Cost paid		240
Restructuring reserve, ending balance		488	$ 488
Sally Beauty Supply
Restructuring Plan
Estimated remaining cost					4,000
Changes in restructuring reserve
Expenses		5,800
Beauty Systems Group
Restructuring Plan
Estimated remaining cost					$ 3,000
Changes in restructuring reserve
Expenses		2,600
Corporate
Changes in restructuring reserve
Expenses		$ 800