WELCOME TO THE NEW SALLY. NEW L LOOK. K. N NEW E EXPER ERIEN - PowerPoint PPT Presentation

WELCOME TO THE NEW SALLY. NEW L LOOK. K. N NEW E EXPER ERIEN ENCE. E. Sally Beauty Holdings, Inc. Fis iscal l 2020 2020 F First Qu Quar arter Ear arnin ings C Call all February 6, 6, 2020 2020

Forward-Looking Statements and Non-GAAP Financial Measures Statements in this presentation which are not purely historical facts or which depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “can,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “will,” “would,” “anticipates,” “potential,” “confident,” “optimistic,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters. Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including, but not limited to, the risks and uncertainties described in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended September 30, 2019, as filed with the Securities and Exchange Commission. Consequently, all forward-looking statements in this presentation are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements. This presentation includes certain financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States, or GAAP, and are therefore referred to as non-GAAP financial measures. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures is provided in the appendix of this presentation. Sally Beauty Holdings, Inc.

Financial Recap of the Quarter SSS Global Operating SBH -0.3% Higher E-commerce Earnings & SBS -1.1% SG&A BSG +1.2% & Sales Up EPS as Expected Highest 27.6% vs PY Declined Revenue Ever Sally Beauty Holdings, Inc.

Loyalty and Digital Capabilities New Sally Mobile App 16M+ Active Members Refreshed Sally E-commerce Site Refreshed BSG E-commerce Site

Additional Digital Capabilities Same Day Delivery ColorView Technology via the Sally Mobile App ColorView Kiosk Technology in Stores

Our Transformation Reflects the Industry Sally Beauty Holdings’ Playbook Changing Retail and Beauty Sector Playing to win with Increased competition our customers: Hair in the retail beauty Color & Care space Increased investment Improving our in stores and retail technology fundamentals Transformation Plan Customers desire for Advancing our more convenient digital commerce omni-channel capabilities shopping experience Continuing to drive Rising labor costs and costs out of the tighter job market business

Playing to Win in Color & Care: Building on Product Sally Beauty Holdings, Inc.

Real Estate – Store Update Third Ave., Upper East Side MANHATTAN STORE CONCEPT STORE Sally Beauty Holdings, Inc.

Playing to Win in Color & Care: Building on Product Maria Nila Olaplex No. 6 & No. 7 Sally Beauty Holdings, Inc.

Our Transformation Plan is Built Based on Priorities Bric icks & Mo Mortar t to O Omnic nichann nnel R el Retaile iler 19 22 18 20 21 Segr gregated, d, S Slow D w Distribu ibutio ion N Node des t to F Flex exible ible R Reple plenis nishm hment 18 19 20 21 22 Core e Retail O il Oper eratio ions ns F From B Brut ute F e Force Ma Manua nual P l Process t to T Tec echn hnolo logy-Ena nable bled 18 20 21 22 19 Old S d Scho hool “ l “Sup upply ply” Ma ” Market etin ing t to Reset et D Digit ital C l Conf nfid iden ence B Brand nding ing 18 19 20 22 21 Produ duct Designe igner t to P Produc uct B Brand nd B Build ilder er 19 20 21 22 18 Unde derinv invested ed S Store E Exper perien ience t to R Refreshe hed S d Store E e Expe perie ienc nce 20 21 19 22 18 Sally Beauty Holdings, Inc.

Q1 Financial Recap Gross Adjusted SSS SG&A% Margin EPS (0.3%) 38.6% 48.4% $0.47 (1) SBS down; Compared to PY: BSG up Down 20 bps Up 150 bps Decrease of 17.5% (1) Adjusted EPS is a non-GAAP measure. See Appendix for a reconciliation of this non-GAAP measure. Sally Beauty Holdings, Inc.

FY20 Full-Year Financial Guidance Total EPS & Adj. Revenue Up Adj. OE Flat EPS Up 1%-2%; to PY LSD – MSD SSS Up (Lower end of the range) 0.5%-1.5% Maintained Modified Maintained Sally Beauty Holdings, Inc.

Non-GAAP Financial Measures Reconciliations (In thousands, except per share data) Appendix (Unaudited) Three Months Ended December 31, 2019 As Reported As Adjusted Restructuring (1) (GAAP) (Non-GAAP) Selling, general and administrative expenses $ 377,930 $ - $ 377,930 SG&A expenses, as a percentage of sales 38.6% 38.6% Operating earnings 94,387 2,531 96,918 Operating margin 9.6% 9.9% Earnings before provision for income taxes 72,846 2,531 75,377 Provision for income taxes (2) 19,631 581 20,212 Net earnings $ 53,215 $ 1,950 $ 55,165 Earnings per share: Basic $ 0.46 $ 0.02 $ 0.48 Diluted $ 0.45 $ 0.02 $ 0.47 Three Months Ended December 31, 2018 As Reported As Adjusted Restructuring (1) (GAAP) (Non-GAAP) Selling, general and administrative expenses $ 366,987 $ - $ 366,987 SG&A expenses, as a percentage of sales 37.1% 37.1% Operating earnings 109,738 3,980 113,718 Operating margin 11.1% 11.5% Earnings before provision for income taxes 85,249 3,980 89,229 Provision for income taxes (2) 19,522 728 20,250 Net earnings $ 65,727 $ 3,252 $ 68,979 Earnings per share: Basic $ 0.55 $ 0.03 $ 0.57 Diluted $ 0.54 $ 0.03 $ 0.57 (1) For the three months ended December 31, 2019, restructuring represents costs and expenses incurred primarily in connection with the Project Surge plan. For the three months ended December 31, 2018, restructuring represents costs and expenses incurred in connection with the 2018 Restructuring Plan. (2) The income tax provision associated with restructuring for the three months ended December Sally Beauty Holdings, Inc. 31, 2019 and 2018, was calculated using a 23.0% and 18.3% tax rate, respectively, since realization of a tax benefit for portions of these expenses are currently not deemed probable.