Bloomberg Businessweek Weekend - May 15th, 2026

19:41Carol Massar:Lots of good things to be looking forward to. The right amount of cash to keep investing in the business. So my hope is the market will catch up once there's a little less maybe worry about consumer discretionary. What about geographies? A particular strength in different parts of the country, particular weakness in other parts? What can you tell us? No, we've seen pretty consistent behavior across the U.S. I think what we always watch is we always watch border stores. We watch lower income stores. They might index a little bit lower than what we'll see across the fleet as a whole. But as the geographies go, not a lot of difference.

20:17Carol Massar:What I'm always curious, and we love, Denise, talking to folks like yourself, where you do have a great window into the consumer and different, you know, we say consumer, but there's all kinds of consumers, right? There are wealthier consumers, which can shrug off a lot of stuff. There are other consumers that, you know, middle income and so on that feel these higher energy prices, and it's an impact and you have to make some choices. Is there anything, though, that you're seeing within the different consumer segments that says to you that we could be headed for something more significant in terms of an economic slowdown?

20:51Carol Massar:Or is it just, you think, reactionary to higher energy prices? And if energy prices come down, things kind of go back to quote unquote normal. The best I can see is it feels a bit more reactionary right now. You know, overall consumer trends are pretty consistent. Transactions are healthy. So it's not as if customers are not coming in. You know, I think what we'd watch for, I watch for, is if grocery prices or other things started to tick back up and there was more pressure beyond just gas prices, we aren't seeing that yet. So I'm certainly hoping that this is a period in time and as we head through the summer, we will see things feel maybe a little bit better for that end customer.

21:30Carol Massar:If they don't, we serve our customer well with value. Our save while you skip the salon message can help drive hair color growth. We've got a great promotional offering and value offering for our stylists to be able to shop across color and care. And our business is generally resilient. You know, when we talk about comps at 1.3%, you know, we see good performance. We might not see real high highs, but we don't see real low lows because at the end of the day, we participate in categories that customers need. If you start coloring your hair, you generally don't stop. If you love your nails and you want to take care of them, you're going to do that.

22:06Carol Massar:If you want healthy hair, you're going to come and get styling treatments, you're going to get serums and masks, and we will keep being there for our customers. So top of mind, obviously, you want to watch what customers are up to, what salons are up to. But beyond that, in terms of the macro, what is top of mind for you, Denise, as you look at, you know, kind of so many things that are coming at folks that run companies just like you? You know, I'm really looking at the places where we can differentiate and where other companies can differentiate as well. So our e-commerce business is up 28 % in the Sally, a business in the US.

22:42Carol Massar:We just recently launched on TikTok shop, a really important place to be because that's where customers are and that's where they're engaging with beauty. And so the more we can respond to that or our licensed colorist on demand program, where once again, if that consumer is pressured and they need to learn how to color their hair at home, we've got a pro right there willing to help them walk along with them and help them have that be a successful journey. So things where we can drive growth while that customer might be feeling a little pinched. Yeah. Denise, talk a little bit more about finding those new customers and bringing them in through these channels.

23:14How do you know, you know, how do you follow the customer from that TikTok journey? And then maybe they end up in the store.

23:22Carol Massar:Yeah. So with the TikTok journey, you know, they'll definitely start on TikTok shop, but those orders are all fulfilled by us. So our ability to understand that customer and see their journey, we feel pretty good about. We've done work in black box work with some of our other marketplace partners, and we've seen about 75 % of those transactions through places like DoorDash should be incremental business to us, which we think is great news and is bringing a new customer into the Sally fold. Overall, our marketing campaigns with what we can do with performance marketing and then trace those activities back into our customer fold.

23:56Carol Massar:Our customer database, customer information management continues to get better to let us watch those trends. And we've seen new growth. We've seen new customer growth. We've seen reactivated customers picking up. And importantly, with our core customers, our good everyday shoppers, frequency is going up. So, you know, feel like all the engines are firing the right way around understanding our customer on the Sally side of the business. Hey, one thing I want to ask you a year ago, when you guys reported earnings, you extended your buyback program through September of 2029. What's your best use of cash right now in your view?

24:31Carol Massar:Yeah, we really are focused on three things. First and foremost, investing behind the business. So whether that is supporting our marketplaces, digital campaigns, our Sally Ignited store refresh that is starting, that is first and foremost. Secondly, we're managing to a really good debt position. So we have a targeted net leverage ratio of 1.5 to 2. We're at the 1.5 level. So we're still doing a little bit of pay down. And then we've committed to invest about 50 % of our free cash flow back into share buybacks. So, you know, we're really firing across all those dimensions and believe that, as you can see with the stock price today, you know, there's some good value for us to be purchasing there.

25:09Carol Massar:But most importantly, we have the cash we need to invest in the business. And that's going to be our primary objective go forward. And what about in terms of the labor force? We just came off of a jobs report on Friday, and this is really important. And we think about this in terms of what the Fed may or may not do if we see weakness in the labor market. We didn't get that on Friday necessarily. But what about when you need workers? Are you able to fill them? Are you holding off on hiring in terms of maybe managing costs a little bit? What's your position? Yeah, out in the field in both our stores and our distribution centers, we are able to hire as we need to.

25:44Carol Massar:We've actually seen turnover slow. So voluntary turnover has gone down, which is great for us because that drives retention and good understanding of our customers and our business amongst our store teams. In our support center, we are always frugal in terms of how we manage headcount and cost. We'll continue to do that. But we don't have any plans to either stop hiring or to ramp up hiring. I think we're going to be pretty status quo in the near term. In other words, low hire, low fire. Exactly. No robots coming. Elon wants to put robots everywhere. You know, we love AI. We're driving it hard in personalization and on the marketing side of our house.

26:23Carol Massar:But at the moment, we need every person that we've got to keep growing our business. That was Denise Polonis, president and CEO of Sally Beauty Holdings. All right. So I feel like, you know, that Fed survey for 2025 and concerns and anxiety that certainly consumers were feeling. And we heard from Denise really about the lower income consumer or middle income, you know, what they are feeling and feeling stretched. But at the same time, first of all, a couple things. We did get U.S. retail sales this past week, and they advanced for a third month in April, pointing to some signs of consumer resilience despite those sharply higher gasoline prices.

26:56Carol Massar:So we saw the value of retail purchases. Remember, it's the value. So if things are more expensive, maybe this bucket gets larger. This report suggesting higher than usual tax refunds and a stock market rally that helped provide a financial cushion against mounting inflationary pressures. But it's unclear how long that will sustain robust demand. And this is kind of, I feel like, the debate that we keep trying to find out about because it does feel like we hear in some instances that consumers are feeling really stretched. It's interesting, though, because that's certainly part of it. But as the saying goes, watch what consumers do, not what they say.

27:30So, you know, you can look at surveys, you can look at the data and those those could tell different stories. There's also the anecdotal stuff that you and I have based on some reporting that we were able to do. We actually spent some time after their investor day with the leadership of a firm. It's the Buy Now, Pay Later firm. Rob O 'Hara was there. He's chief financial officer. Max Levchin, the chairman, CEO and founder, is part of the PayPal mafia. He was at this event that we went to. And also Michael Linford, the chief operating officer. And we wanted to ask about the consumer and how the consumer is doing.

28:00And Michael basically said, from our vantage point, from our data, the consumer is looking really good.

28:06Carol Massar:And we pushed him, to be fair, right? Like they talked about the macro. And then we kind of came back and be like, really? Because that's not always what we hear. And you saw it even in some of the company earnings reports. It was interesting to hear in the context of higher inflation and higher gas prices. Yeah, exactly. Exactly. I will say one measure of one of the reports this week of consumer sentiment at its lowest on record. And many economists expect spending growth to be sluggish should inflation persist. Corporate executives have already flagged some consumers have begun to pull back.

28:37Carol Massar:And that's what we found off of earnings. But we continue to see it in some of the stories that crossed the Bloomberg. Still ahead on Bloomberg Business Week, cats like you have never seen it or heard it before. We catch up with the directors of the new Tony-nominated revival. And we also have joining with us, I'm not going to give it away, one big fan who's actually seen it a couple of times. It was fun to do that with him. Stick around, everybody. This is Bloomberg.

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31:04Complete disclosures available at public.com slash disclosures. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say, Alexa, play Bloomberg 1130.

31:44If you've been paying attention to us over the past couple of years, then by now you've seen Cats the Jellicle Ball. Because close to two years ago, we were having a conversation with Chris Rauser of Bloomberg Pursuits about how the costumes were made. It was based on a story from James Tarmy. If you missed it, be sure to check it out on the terminal or at Bloomberg.com. Back then, our team called it a viral new show. I remember Chris saying to us that we absolutely had to see it.

32:06Carol Massar:He did. Now The Hollywood Reporter is out calling it, quote, this season's must-see Broadway revival. We've got with us Bill Rauch and Jalen Levingstead. They are co-directors of Cats, the Jellicle Ball. Bill is also artistic director at the Perlman Performing Arts Center. Also with us is our own Chris Rauch, Bloomberg Pursuits editor-at-large. Chris, as we said, he's also the guy that we reach out to when we need to go somewhere and figure out what to go see. Welcome, welcome, congratulations. How did this first come together? Did you guys call Andrew Lloyd Webber? How does this happen? Eventually, we absolutely did.

32:43Carol Massar:But how did it start to, there's always either people sitting around a table thinking, oh my God, what if we just did this? We both have our own stories about that. About 30 years ago, I began to think about Andrew Lloyd Webber's musical Cats in a gay context. I thought about the possibility of Grizabella being an older gay man and a gay bar singing the song memory And that was the seed but over time We realized of course. It's not a bar. It's a ball and Grizabella is not a gay man Grizabella is a transgender woman and that is in fact What cats the jillicle well became yeah, I mean it really started with that that Impulse from bill and we were connected after I had started to have some really in jest conversations with a roommate of mine about what if there was a production of Cats where no one was an actual cat.

33:36And there weren't ears and there weren't tails. It sounds sacrilegious, but you kind of love it. And you just kind of called each other cat in the way that you did in the 20th century. Look at that cat. Look at that cool cat. That's a sly cat right there. And I was like, well, it's already kind of in the American vernacular. I bet there's a cultural context that you could put the show in. But I just assumed Andrew Lloyd Webber would never let such a radical change happen with the show. And then we were connected soon after that because the casting director of that show was like, you need to talk to Bill because Bill is also thinking along the exact same lines.

34:10So who calls Andrew Lloyd Webber? We really, it was a group of us who figured out how to do the show in the context of Ballroom. and we began to reach out to people in Andrew's company. And each person we talked to said, we think it's fantastic. We love the idea. It's going to be up to Andrew. And that was like a good year-long process. And eventually Andrew said yes. Can you talk a little bit more about how perfectly the world of Ballroom overlaps with structurally how Cats works? Because Cats, if you've seen it, it's not a linear plot line. It's essentially like a narrator announcer saying, and look at this character and like that is very much how ballroom works and with the additional script work that they did it were it maps almost perfectly into it i've talked to so many people who say cats has never worked this well including elaine page right it's been very exciting we've had uh lots of cats alum both people who have been on stage and off stage who really relate to the show there's people who have historically hated the musical and and really enjoy themselves and people who feel a lot of fidelity towards the original musical and enjoy themselves at the show as well.

35:24So there's a lot of that happening. It's very fascinating. But, yeah, I do think that there is this kind of beautiful marriage between ballroom culture and cats. Some of the themes of cats that have always been there, themes of family, themes of tribe, themes of competition and one-upmanship and who's going to get the grand prize by the end of the night. You know, if you go to a ball, it is all centered around a competition wherein identity is made pageant. And I think that the mix between that and just working with the original T.S. Eliot poetry and really finding new ways to interpret these humans, not as cats, but as humans in the ballroom scene.

36:10There are all these ways that the show ended up dancing with ballroom. That was really surprising. One of the most fun aspects of the whole project was matching each song about each character with different categories in ballroom. And that was, from early on, so many of them just completely locked into place and made perfect sense. So it does feel like T.S. Eliot meant this all along. And Andrew Lloyd Webber, it was just waiting to be excavated in this way. How do you take a production like this that was so successful downtown and bring it to Broadway? well I think one of the things you have to do first is to make a commitment to not copy and pasting an experience like is it a different I mean Chris you've seen it both it's different right it's enhanced I mean when you take something to Broadway you enhance it and it really is amped up and do you get new producers on it there needs to be additional funding or the costumes get amped up because that's a big

37:12Carol Massar:part right of this it's the amping up you're talking about We have two lead producers who are extraordinary and many, many co-producers. But the biggest thing we struggled with was how to make it work in a proscenium. Because at PAC NYC, it's a very immersive space. It's very, very flexible. There are cabaret tables. The runway was 50 feet long. So essentially on Broadway, we have twice as many audience members, but only half the space. And what was great about the exercise of figuring out how to tell the story on a Broadway stage is that it forced more focus, and it allowed us to dig into the story in an even deeper way.

37:50And I would say that by the end of Off-Broadway, we were able to say, what really works about this? What is the thing that if we had to take it somewhere else, people would go, but I can't lose this. And to my surprise, I really would have assumed that it was the 50-foot-long runway. And I think that's the expectation of the thing that you think you might miss. But the truth is, what felt life or death for this production was making sure that the audience felt like they were in a different relationship with each other. And that feels even more amplified on Broadway because you're on Broadway and you can't believe you're hooping and hollering next to people on Broadway.

38:26Were you hooping and hollering? Well, speaking of life and death, it is not an easy time to take a musical to Broadway. I mean, was this anxiety provoking? Can you talk about how much it was capitalized for or how risky it felt to take it from your theater to this huge stage? I think the final numbers on the capitalization are not known even to us. But it was not cheap. It's not cheap to do a 23-actor-on-stage musical on Broadway in today's economy. But there was just such passionate belief in the project from the get-go from our producers yeah I will say I mean you say this all the time us being able to accomplish the show in the proscenium means that the show gets to have a longer life means that we don't make something that's so expensive that we can't eventually take it on the road or take it to another country or so there's always the negotiation between like what is the budget what is the scale how do we accomplish this without an audience ever knowing.

39:29Carol Massar:All right, I'm just going to... Do not call me out, Carol. Just call me out. You're not just Google. No. I Googled proscenium. Yeah, because I think... No, no, no, but I was doing the same thing. I was going to do it, and I'm like, so what exactly is that? A traditional Broadway theater where most of the audience is sitting in what we think of as the audience, and most of the action happens on a stage behind the proscenium arch, behind the picture of the proscenium arch. So our job was to break that proscenium as much as we could. We have 80 audience members on stage. We have the actors out in the audience all the time.

40:05And to really make it that everybody's in one room together.

40:08Carol Massar:Well, and not to go back to the original Cats, but let's go there. But that's how you could actually sit on the side of the stage. And I also remember when it opened. I saw it a couple times. Yeah, I did too. It was my first Broadway show. But the Cats coming down the aisle and stuff. So it's really wonderful when you can figure out how to do that. And that's embedded into ballroom as well, right? Even that element of Cats from the original in terms of actors everywhere, that's the exact same kind of energy you want to create at a ball. So even down to that detail, we're in conversation with what was already in the event of Cats from the very beginning.

40:44Jalen mentioned taking the show on the road. And I just want to say one of the things we are so proud of is if you are somebody from the ballroom world or if you think ballroom means waltzing and foxtrotting, like whatever your degree of knowledge, if you love cats, if you've never been exposed to cats, everybody of all ages loves this show. And we can say that. It is a joy bomb. And we are so proud to be sharing it. And so we wanted to have a good long life from Broadway and we want to take it out on the road and get as many people to see it as possible.

41:17Carol Massar:How many times have you seen it? I saw it twice downtown. So far. twice on town and then once on Broadway the first time I went I got a group ticket discount and brought 50 gay guys from Brooklyn wow try that on Broadway when Temptress is about to hit the big big moment and I just looked around the theater the theater was full of people waiting for her to go so yeah it was really magical so from the PAC, the Pearlman Performing Arts Center is part of your goal to create shows that move on from there? Or how does this fit into that project for you? Our mission at PACNYC is to bring people together in that historic site at the World Trade Center.

42:02We want to bring people together from as many different communities as possible to be in community together in our theaters. And we believe in every project we do. So when one can have a longer life, it is an absolute gift. It's not the only measure of success at all, but it is one lovely measure of success. I have to go see it

42:23Carol Massar:I have to go see it What did Andrew say? What did Andrew Lerber say when you got him on the phone? Oh, he really was just tickled by the amount of joy and like he often anytime at least I'm talking to him and he's talking about the show that's the first thing he mentions is it's just so joyful, isn't it? Has he come to see it? Oh, many times. Oh, he has? Yes, yes. In fact, one of his great quotes is I've never been in a theater with as much love as I've been in for Catch the Jellicle Ball. And it's been thrilling to watch him receive the lyrics and the poetry in a new way through this lens as well.

42:57Carol Massar:I feel like that's what arts and culture, like arts is about, right? Like you take something and just, it evolves, right? And I don't know, a rebirth or an innovative way. I don't know. It's just pretty cool stuff. A revival. A revival. That's right. But it evolves. And these guys are nominated for a Tony for it. You are. That's revival, yeah. Congratulations. Nine Tony nominations. That's a pretty big deal. That's a pretty big deal. So Chris, next time will you take Tim and me? Yeah. You guys will get a group discount. That was Chris Rauser, Bloomberg Pursuits Editor-at-Large with Bill Rauch and Jalen Levingston, co-directors of Cats, The Jellicle Ball.

43:30Bill, also Artistic Director at the Perlman Performing Arts Center.

43:34Carol Massar:And that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us. I'm Tim Steneberg. And I'm Carol Masser. Have a good and safe weekend, everyone. This is the Bloomberg Business Week Daily Podcast. available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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