Company: SBH
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001193125-25-280122
Chunk: 70

Company: Sally Beauty Holdings, Inc.
Filing Date: 2025-11-13
Form: 10-K
Item: Item 6
Chunk 70
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.5 million, $3.3 million, and $1.3 million, respectively, into interest expense on our consolidated statements of earnings related to the interest rate swap. At September 30, 2025, we expect to reclassify net gains of approximately $0.1 million out of AOCL and into interest expense over the next 12 months.Interest Rate CapsIn July 2017, we purchased two interest rate caps with an initial aggregate notional amount of $550 million (the “interest rate caps”) to mitigate the exposure to higher interest rates in connection with our prior term loan due 2024. The interest rate caps were comprised of individual caplets and were designated as cash flow hedges. Accordingly, the changes in fair value of the interest rate caps were recorded quarterly, net of income tax, and included in AOCL. During fiscal year 2023, we early settled both interest rate caps due to the forecasted transactions, which were being hedged, no longer occurring as a result of the repayment of our prior term loan. For fiscal year 2023, we recognized income of $2.8 million into interest expense on our consolidated statements of earnings related to the caps.Non-Designated Cash Flow HedgesWe also use foreign exchange contracts to mitigate our exposure to exchange rate changes in connection with certain intercompany balances not permanently invested. At September 30, 2025, we held forwards, which expire on various 

F-24

Sally Beauty Holdings, Inc. and SubsidiariesNotes to Consolidated Financial StatementsFiscal Years ended September 30, 2025, 2024, and 2023 

dates during the first four months of fiscal year 2026, with a notional amount, based upon exchange rates at September 30, 2025, as follows (in thousands):

         Notional Currency
          
         Notional Amount

         Canadian Dollar
          
         $
         11,401

         Euro

         17,714

         British Pound

         39,955

         Mexican Peso

         5,298

         Total
          
         $
         74,368

       We record changes in fair value and realized gains or losses related to the foreign currency forwards into selling, general and administrative expenses. The effects of these foreign exchange contracts on our consolidated financial statements were a net gain of $0.1 million for fiscal year 2025 and net losses of $1.1 million and $2.2 million for