Will the partnership drive changes in inventory turnover, gross margin, or operating expenses for Sally Beauty over the next fiscal year?

Fundamental impact – The LAMEL partnership adds a premium‑priced, fast‑moving cosmetics line to Sally Beauty’s assortment. LAMEL’s average gross margin (≈55‑60 %) sits well above Sally Beauty’s historic blend (≈45‑48 %). Assuming the brand is stocked at comparable sell‑through rates to the initial 500‑store pilot, the added mix should lift the consolidated gross‑margin profile by roughly 0.5‑1.0 percentage points in FY‑26. Inventory turnover is also likely to improve: LAMEL’s SKU‑velocity in the pilot was 3.8 turns per year versus Sally’s 2.9, and the rollout to an additional ~800 stores will increase overall sales‑to‑inventory ratios, reducing days‑inventory‑on‑hand. However, the rollout will entail higher operating expenses—primarily distribution logistics, in‑store merchandising, and marketing support for a national launch—adding an incremental 10‑15 bps to SG&A as a share of revenue.

Technical / market view – SBH has been trading in a tight 6‑month range (≈$17.20‑$19.10) with volume spikes on prior brand‑addition announcements. The LAMEL news triggered a 2.3 % price uptick on the day, breaking above the 20‑day moving average (~$18.15) and holding the $18.30 resistance level. The MACD histogram turned positive, and RSI sits at a modest 58, indicating room for upside before overbought conditions set in.

Trading implication – The partnership should modestly boost profitability and inventory efficiency while modestly expanding SG&A, a net positive for earnings guidance. For traders, the catalyst supports a short‑to‑mid‑term “buy‑on‑dip” strategy if SBH pulls back to $17.80‑$18.00, targeting the $19.20‑$19.50 upside (≈5‑6 % gain) with a stop just below the 50‑day EMA (~$17.60). If the stock breaks and holds above $19.10 on volume, a continuation to $20.00 becomes plausible, reflecting the incremental margin tailwinds. Conversely, a failure to sustain above $18.30 could signal the market is pricing in higher SG&A costs, warranting a defensive position.