Sally Beauty Holdings Reports First Quarter Fiscal 2024 Results
- Q1 cash flow from operations of $51 million
- Executed $20 million in share repurchases
- Maintains full year fiscal 2024 guidance
- Global e-commerce sales of $91 million
- GAAP gross margin of 50.2%
- GAAP operating earnings of $69 million
- Strategic initiatives for long-term growth
- 2.7% decrease in net sales
- 0.8% decline in comparable sales
- Decrease in gross profit
- Increase in SG&A expenses
Insights
The reported decline in consolidated net sales by 2.7% and a comparable sales decline of 0.8% for Sally Beauty Holdings, Inc. could signal a challenging retail environment, potentially impacted by broader economic factors such as consumer spending behavior. The gross margin contraction of 80 basis points year-over-year, despite lower distribution and freight costs, suggests pressure on profitability, likely due to an unfavorable sales mix and fixed cost absorption. This margin pressure is a critical metric for investors as it may influence future profitability and cash flow generation.
The operating cash flow of $51 million is a positive indicator of the company's ability to generate liquidity, which has supported its share repurchase program. However, investors should note the net debt leverage ratio of 2.2x, which provides insight into the company's debt management and financial leverage. The maintenance of full-year fiscal 2024 guidance suggests management confidence in their strategic initiatives, but investors should remain cautious given the current sales trends and macroeconomic uncertainties.
Despite the overall sales decline, the growth in e-commerce sales to 9.8% of net sales reflects a continued shift towards online shopping, a trend that has been accelerating in the retail sector. This shift requires ongoing adaptation and investment in digital capabilities, which Sally Beauty appears to be embracing. Additionally, the comparable sales increase of 0.7% in the Beauty Systems Group segment, driven by new brand innovation and improving salon demand, indicates resilience in professional channels and potential areas of growth.
The company's strategic focus on customer centricity and innovation could be a long-term driver of growth, but the short-term challenges of inflationary pressures and reduced consumer traffic need to be managed carefully. The company's ability to navigate these headwinds while executing its strategic initiatives will be crucial for its performance in the competitive beauty retail market.
Analyzing the segment-specific performance, the Sally Beauty Supply Segment's net sales decrease of 4.8% and the Beauty Systems Group Segment's flat sales year-over-year highlight the differing dynamics within the company's portfolio. The store optimization efforts, including the closure of stores, indicate a strategic shift towards more profitable operations, which could improve efficiency but may also impact market presence.
The capital expenditures of $30.6 million reflect ongoing investments in the business, which are essential for long-term growth but could strain short-term cash flow. The company's guidance for net sales and comparable sales to be approximately flat suggests a cautious outlook, likely factoring in the potential for continued consumer spending pressure. Investors should monitor how these investments and strategic shifts balance against the backdrop of a challenging retail environment.
-
Generated Q1 Cash Flow from Operations of
$51 Million -
Executed
in Share Repurchases$20 Million - Maintains Full Year Fiscal 2024 Guidance
Fiscal 2024 First Quarter Summary
-
Consolidated net sales of
, a decrease of$931 million 2.7% compared to the prior year; -
Consolidated comparable sales decline of
0.8% ; -
Global e-commerce sales of
, representing$91 million 9.8% of net sales; -
GAAP gross margin
50.2% ; -
GAAP operating earnings of
and GAAP operating margin of$69 million 7.4% ; Adjusted Operating Earnings of and Adjusted Operating Margin of$74 million 7.9% ; -
GAAP diluted net earnings per share of
and Adjusted Diluted Net Earnings Per Share of$0.35 ; and$0.39 -
Cash flow from operations of
and Operating Free Cash Flow of$51 million .$20 million
“We are pleased with our start to the year, delivering results in line with our expectations while continuing to make solid progress on our strategic initiatives to drive top line growth and improve profitability over the long-term,” said Denise Paulonis, president and chief executive officer. “During the quarter, our teams executed well as we continued to focus on customer centricity, and bringing innovation, education and new services to our customers. The business generated solid cash flow from operations of more than
Fiscal 2024 First Quarter Operating Results
First quarter consolidated net sales were
Consolidated comparable sales declined
Consolidated gross profit for the first quarter was
Selling, general and administrative (SG&A) expenses totaled
GAAP operating earnings and operating margin in the first quarter were
GAAP net earnings in the first quarter were
Balance Sheet and Cash Flow
As of December 31, 2023, the Company had cash and cash equivalents of
First quarter cash flow from operations was
Fiscal 2024 First Quarter Segment Results
Sally Beauty Supply
-
Segment net sales were
in the quarter, a decrease of$523.2 million 4.8% compared to the prior year, driven primarily by the lapping of the Company’s December 2022 store optimization efforts. The segment had a favorable impact of 160 basis points from foreign currency translation on reported sales. At constant currency, segment e-commerce sales were or$35 million 6.7% of segment net sales for the quarter. -
Segment comparable sales decreased
1.9% in the first quarter, primarily reflecting lower traffic and inflationary pressures that impacted consumer behavior. - At the end of the quarter, net store count was 3,143 compared to 3,146 in the prior year.
-
GAAP gross margin decreased by 30 basis points to
58.6% compared to the prior year. The decrease was driven primarily by an unfavorable sales mix shift between Sally US (higher margin) and Sally international (lower margin), and unfavorable fixed cost absorption, partially offset by lower distribution and freight costs from supply chain efficiencies. -
GAAP operating earnings were
compared to$77.6 million in the prior year, representing a decrease of$99.2 million 21.7% . GAAP operating margin decreased to14.8% compared to18.0% in the prior year.
Beauty Systems Group
-
Segment net sales were
in the quarter, essentially flat to the prior year. The segment operated 20 fewer stores at the end of the quarter compared to the prior year. At constant currency, segment e-commerce sales were$408.1 million or$56 million 13.8% of segment net sales for the quarter. -
Segment comparable sales increased
0.7% in the first quarter, primarily reflecting expanded distribution, new brand innovation and improving salon demand trends. - At the end of the quarter, net store count was 1,332.
-
GAAP gross margin decreased 110 basis points to
39.4% in the quarter compared to the prior year. Excluding the prior year’s true-up of the non-cash inventory write-down as part of the Company’s previously announced distribution center consolidation and store optimization plan, Adjusted Gross Margin decreased 40 basis points to39.4% compared to the prior year. The decrease was driven primarily by unfavorable fixed cost absorption and shrink expense, partially offset by lower distribution and freight costs from supply chain efficiencies and higher product margin. -
GAAP operating earnings were
in the quarter, a decrease of$44.6 million 10.1% compared to in the prior year. GAAP operating margin in the quarter was$49.6 million 10.9% compared to12.2% in the prior year. - At the end of the quarter, there were 656 distributor sales consultants compared to 688 in the prior year.
Fiscal Year 2024 Guidance
The Company is maintaining the following guidance for the full fiscal year 2024:
- Net sales and comparable sales are expected to be approximately flat compared to the prior year, reflecting growth from the Company’s strategic initiatives, offset by anticipated pressure on consumer spending;
-
Gross Margin is expected to remain above
50% ; -
Adjusted Operating Margin is expected to be at least
9.0% ; -
Operating Cash Flow is expected to be at least
; and$260 million -
Capital expenditures are expected to be approximately
.$100 million
* |
The Company does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of the Company’s control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. |
Conference Call and Where You Can Find Additional Information
The Company will hold a conference call and audio webcast today to discuss its financial results and its business at approximately 7:30 a.m. Central Time today, February 1, 2024. During the conference call, the Company may discuss and answer one or more questions concerning business and financial matters and trends affecting the Company. The Company’s responses to these questions, as well as other matters discussed during the conference call, may contain or constitute material information that has not been previously disclosed. Simultaneous to the conference call, an audio webcast of the call will be available via a link on the Company’s website, sallybeautyholdings.com/investor-relations. The conference call can be accessed by dialing (877) 336-4440 (International: (409) 207-6984) and referencing the access code 2134081#. The teleconference will be held in a “listen-only” mode for all participants other than the Company’s current sell-side and buy-side investment professionals. A replay of the earnings conference call will be available starting at 10:30 a.m. Central Time, February 1, 2024, through February 15, 2024, by dialing (866) 207-1041 (International: (402) 970-0847) and referencing access code 6387048#. Also, a website replay will be available on sallybeautyholdings.com/investor-relations.
About Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc. (NYSE: SBH), as the leader in professional hair color, sells and distributes professional beauty supplies globally through its Sally Beauty Supply and Beauty Systems Group businesses. Sally Beauty Supply stores offer up to 7,000 products for hair color, hair care, nails, and skin care through proprietary brands such as Ion®, Bondbar®, Strawberry Leopard®, Generic Value Products®, Inspired by Nature® and Silk Elements® as well as professional lines such as Wella®, Clairol®, OPI®, L’Oreal®, Wahl® and Babyliss Pro®. Beauty Systems Group stores, branded as CosmoProf® or Armstrong McCall® stores, along with its outside sales consultants, sell up to 8,000 professionally branded products including Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico®, Amika® and Moroccannoil®, intended for use in salons and for resale by salons to retail consumers. For more information about Sally Beauty Holdings, Inc., please visit https://www.sallybeautyholdings.com/.
Cautionary Notice Regarding Forward-Looking Statements
Statements in this news release and the schedules hereto 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, those described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended September 30, 2023. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements.
Use of Non-GAAP Financial Measures
This news release and the schedules hereto include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in
Adjusted Gross Margin – We define the measure Adjusted Gross Margin as GAAP gross margin excluding the true-up of the inventory write-down related to the Company’s distribution center consolidation and store optimization plan for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted Selling, General and Administrative Expenses – We define the measure Adjusted Selling, General and Administrative Expenses as GAAP selling, general and administrative expenses excluding costs related to the Company’s fuel for growth initiative and other expenses, and COVID-19 net expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted EBITDA and EBITDA Margin – We define the measure Adjusted EBITDA as GAAP net earnings before depreciation and amortization, interest expense, income taxes, share-based compensation, costs related to the Company’s restructuring plans, costs related to the Company’s fuel for growth initiative and other expenses, and COVID-19 related net expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of net sales.
Adjusted Operating Earnings and Operating Margin – Adjusted operating earnings are GAAP operating earnings that exclude costs related to the Company’s restructuring plans, costs related to the Company’s fuel for growth initiative and other expenses, and net expenses related to COVID-19 for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Operating Margin is Adjusted Operating Earnings as a percentage of net sales.
Adjusted Net Earnings – Adjusted net earnings is GAAP net earnings that exclude tax-effected costs related to the Company’s restructuring plans, tax-effected expenses related to the Company’s fuel for growth initiative and other costs, and tax-effected net expenses related to COVID-19 for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted Diluted Net Earnings Per Share – Adjusted diluted net earnings per share is GAAP diluted earnings per share that exclude tax-effected costs related to the Company’s restructuring plans, tax-effected expenses related to the Company’s fuel for growth initiative and other costs, and tax-effected net expenses related to COVID-19 for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Operating Free Cash Flow – We define the measure Operating Free Cash Flow as GAAP net cash provided by operating activities less payments for capital expenditures (net). We believe Operating Free Cash Flow is an important liquidity measure that provides useful information to investors about the amount of cash generated from operations after taking into account payments for capital expenditures (net).
We believe that these non-GAAP financial measures provide valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses; providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry.
We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and Board of Directors also use these non-GAAP measures as supplemental measures to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe that these non-GAAP measures also provide meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. These non-GAAP measures should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies.
Supplemental Schedules |
|
Segment Information |
1 |
Non-GAAP Financial Measures Reconciliations |
2 |
Non-GAAP Financial Measures Reconciliations; Adjusted EBITDA and |
|
Operating Free Cash Flow |
3 |
Store Count and Comparable Sales |
4 |
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Earnings | ||||||||||
(In thousands, except per share data) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended December 31, | ||||||||||
|
2023 |
|
|
2022 |
|
Percentage Change |
||||
Net sales | $ |
931,302 |
|
$ |
957,055 |
|
(2.7 |
)% |
||
Cost of products sold |
|
464,126 |
|
|
468,481 |
|
(0.9 |
)% |
||
Gross profit |
|
467,176 |
|
|
488,574 |
|
(4.4 |
)% |
||
Selling, general and administrative expenses |
|
398,138 |
|
|
391,580 |
|
1.7 |
% |
||
Restructuring |
|
(85 |
) |
|
10,406 |
|
(100.8 |
)% |
||
Operating earnings |
|
69,123 |
|
|
86,588 |
|
(20.2 |
)% |
||
Interest expense |
|
17,314 |
|
|
17,923 |
|
(3.4 |
)% |
||
Earnings before provision for income taxes |
|
51,809 |
|
|
68,665 |
|
(24.5 |
)% |
||
Provision for income taxes |
|
13,419 |
|
|
18,328 |
|
(26.8 |
)% |
||
Net earnings | $ |
38,390 |
|
$ |
50,337 |
|
(23.7 |
)% |
||
Earnings per share: | ||||||||||
Basic | $ |
0.36 |
|
$ |
0.47 |
|
(23.4 |
)% |
||
Diluted | $ |
0.35 |
|
$ |
0.46 |
|
(23.9 |
)% |
||
Weighted average shares: | ||||||||||
Basic |
|
105,948 |
|
|
107,140 |
|
||||
Diluted |
|
108,718 |
|
|
109,460 |
|
||||
Basis Point Change |
||||||||||
Comparison as a percentage of net sales | ||||||||||
Consolidated gross margin |
|
50.2 |
% |
|
51.0 |
% |
(80 |
) |
||
Selling, general and administrative expenses |
|
42.8 |
% |
|
40.9 |
% |
190 |
|
||
Consolidated operating margin |
|
7.4 |
% |
|
9.0 |
% |
(160 |
) |
||
Effective tax rate |
|
25.9 |
% |
|
26.7 |
% |
(80 |
) |
||
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
December 31, 2023 |
September 30, 2023 |
||||||
Cash and cash equivalents | $ |
120,999 |
$ |
123,001 |
|||
Trade and other accounts receivable |
|
78,489 |
|
75,875 |
|||
Inventory |
|
1,007,628 |
|
975,218 |
|||
Other current assets |
|
55,748 |
|
53,903 |
|||
Total current assets |
|
1,262,864 |
|
1,227,997 |
|||
Property and equipment, net |
|
284,899 |
|
297,779 |
|||
Operating lease assets |
|
551,639 |
|
570,657 |
|||
Goodwill and other intangible assets |
|
591,872 |
|
588,252 |
|||
Other assets |
|
40,112 |
|
40,565 |
|||
Total assets | $ |
2,731,386 |
$ |
2,725,250 |
|||
Current maturities of long-term debt | $ |
4,168 |
$ |
4,173 |
|||
Accounts payable |
|
267,479 |
|
258,884 |
|||
Accrued liabilities |
|
139,573 |
|
163,366 |
|||
Current operating lease liabilities |
|
147,069 |
|
150,479 |
|||
Income taxes payable |
|
14,780 |
|
2,355 |
|||
Total current liabilities |
|
573,069 |
|
579,257 |
|||
Long-term debt, including capital leases |
|
1,065,299 |
|
1,065,811 |
|||
Long-term operating lease liabilities |
|
438,928 |
|
455,071 |
|||
Other liabilities |
|
22,465 |
|
23,139 |
|||
Deferred income tax liabilities, net |
|
90,285 |
|
93,224 |
|||
Total liabilities |
|
2,190,046 |
|
2,216,502 |
|||
Total stockholders’ equity |
|
541,340 |
|
508,748 |
|||
Total liabilities and stockholders’ equity | $ |
2,731,386 |
$ |
2,725,250 |
|||
Supplemental Schedule 1 | ||||||||||
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES | ||||||||||
Segment Information | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended December 31, | ||||||||||
|
2023 |
|
|
2022 |
|
Percentage Change |
||||
Net sales: | ||||||||||
Sally Beauty Supply ("SBS") | $ |
523,238 |
|
$ |
549,472 |
|
(4.8 |
)% |
||
Beauty Systems Group ("BSG") |
|
408,064 |
|
|
407,583 |
|
0.1 |
% |
||
Total net sales | $ |
931,302 |
|
$ |
957,055 |
|
(2.7 |
)% |
||
Operating earnings: | ||||||||||
SBS | $ |
77,629 |
|
$ |
99,174 |
|
(21.7 |
)% |
||
BSG |
|
44,627 |
|
|
49,647 |
|
(10.1 |
)% |
||
Segment operating earnings |
|
122,256 |
|
|
148,821 |
|
(17.9 |
)% |
||
Unallocated expenses (1) |
|
53,218 |
|
|
51,827 |
|
2.7 |
% |
||
Restructuring |
|
(85 |
) |
|
10,406 |
|
(100.8 |
)% |
||
Interest expense |
|
17,314 |
|
|
17,923 |
|
(3.4 |
)% |
||
Earnings before provision for income taxes | $ |
51,809 |
|
$ |
68,665 |
|
(24.5 |
)% |
||
Segment gross margin: |
|
2023 |
|
|
2022 |
|
Basis Point Change |
|||
SBS |
|
58.6 |
% |
|
58.9 |
% |
(30 |
) |
||
BSG |
|
39.4 |
% |
|
40.5 |
% |
(110 |
) |
||
Segment operating margin: | ||||||||||
SBS |
|
14.8 |
% |
|
18.0 |
% |
(320 |
) |
||
BSG |
|
10.9 |
% |
|
12.2 |
% |
(130 |
) |
||
Consolidated operating margin |
|
7.4 |
% |
|
9.0 |
% |
(160 |
) |
||
(1) Unallocated expenses, including share-based compensation expense, consist of corporate and shared costs and are included in selling, general and administrative expenses. | ||||||||||
Supplemental Schedule 2 |
|||||||||||||||
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES | |||||||||||||||
Non-GAAP Financial Measures Reconciliations | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, 2023 | |||||||||||||||
As Reported (GAAP) |
Restructuring (1) | Fuel for Growth and Other (2) |
As Adjusted (Non-GAAP) |
||||||||||||
Cost of products sold | $ |
464,126 |
|
$ |
— |
|
$ |
— |
|
$ |
464,126 |
|
|||
Consolidated gross margin |
|
50.2 |
% |
|
50.2 |
% |
|||||||||
Selling, general and administrative expenses |
|
398,138 |
|
|
— |
|
|
(4,881 |
) |
|
393,257 |
|
|||
SG&A expenses, as a percentage of sales |
|
42.8 |
% |
|
42.2 |
% |
|||||||||
Operating earnings |
|
69,123 |
|
|
(85 |
) |
|
4,881 |
|
|
73,919 |
|
|||
Operating margin |
|
7.4 |
% |
|
7.9 |
% |
|||||||||
Interest expense |
|
17,314 |
|
|
— |
|
|
— |
|
|
17,314 |
|
|||
Earnings before provision for income taxes |
|
51,809 |
|
|
(85 |
) |
|
4,881 |
|
|
56,605 |
|
|||
Provision for income taxes (4) |
|
13,419 |
|
|
(21 |
) |
|
1,254 |
|
|
14,652 |
|
|||
Net earnings | $ |
38,390 |
|
$ |
(64 |
) |
$ |
3,627 |
|
$ |
41,953 |
|
|||
Earnings per share: | |||||||||||||||
Basic | $ |
0.36 |
|
$ |
(0.00 |
) |
$ |
0.04 |
|
$ |
0.40 |
|
|||
Diluted | $ |
0.35 |
|
$ |
(0.00 |
) |
$ |
0.04 |
|
$ |
0.39 |
|
|||
Three Months Ended December 31, 2022 | |||||||||||||||
As Reported (GAAP) |
Restructuring (1) | COVID-19 (3) | As Adjusted (Non-GAAP) |
||||||||||||
Cost of products sold | $ |
468,481 |
|
$ |
2,681 |
|
$ |
— |
|
$ |
471,162 |
|
|||
Consolidated gross margin |
|
51.0 |
% |
|
50.8 |
% |
|||||||||
Selling, general and administrative expenses |
|
391,580 |
|
|
— |
|
|
(1,052 |
) |
|
390,528 |
|
|||
SG&A expenses, as a percentage of sales |
|
40.9 |
% |
|
40.8 |
% |
|||||||||
Operating earnings |
|
86,588 |
|
|
7,725 |
|
|
1,052 |
|
|
95,365 |
|
|||
Operating margin |
|
9.0 |
% |
|
10.0 |
% |
|||||||||
Interest expense |
|
17,923 |
|
|
— |
|
|
— |
|
|
17,923 |
|
|||
Earnings before provision for income taxes |
|
68,665 |
|
|
7,725 |
|
|
1,052 |
|
|
77,442 |
|
|||
Provision for income taxes (4) |
|
18,328 |
|
|
1,976 |
|
|
270 |
|
|
20,574 |
|
|||
Net earnings | $ |
50,337 |
|
$ |
5,749 |
|
$ |
782 |
|
$ |
56,868 |
|
|||
Earnings per share: | |||||||||||||||
Basic | $ |
0.47 |
|
$ |
0.05 |
|
$ |
0.01 |
|
$ |
0.53 |
|
|||
Diluted | $ |
0.46 |
|
$ |
0.05 |
|
$ |
0.01 |
|
$ |
0.52 |
|
|||
(1) For the three months ended December 31, 2023 and 2022, restructuring represents expenses and adjustments incurred primarily in connection with our Distribution Center Consolidation and Store Optimization Plan, including |
|||||||||||||||
(2) Fuel for Growth and other represents expenses related to consulting services and severance expenses. | |||||||||||||||
(3) For the three months ended December 31, 2022, COVID-19 expenses related to use taxes around the donation of personal protection merchandise. | |||||||||||||||
(4) The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized. | |||||||||||||||
Supplemental Schedule 3 | ||||||||||
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES | ||||||||||
Non-GAAP Financial Measures Reconciliations, Continued | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended December 31, | ||||||||||
Adjusted EBITDA: |
|
2023 |
|
|
2022 |
|
Percentage Change |
|||
Net earnings | $ |
38,390 |
|
$ |
50,337 |
|
(23.7 |
)% |
||
Add: | ||||||||||
Depreciation and amortization |
|
28,063 |
|
|
25,285 |
|
11.0 |
% |
||
Interest expense |
|
17,314 |
|
|
17,923 |
|
(3.4 |
)% |
||
Provision for income taxes |
|
13,419 |
|
|
18,328 |
|
(26.8 |
)% |
||
EBITDA (non-GAAP) |
|
97,186 |
|
|
111,873 |
|
(13.1 |
)% |
||
Share-based compensation |
|
5,118 |
|
|
5,135 |
|
(0.3 |
)% |
||
Restructuring |
|
(85 |
) |
|
7,725 |
|
(101.1 |
)% |
||
Fuel for Growth and Other |
|
4,881 |
|
|
— |
|
100.0 |
% |
||
COVID-19 |
|
— |
|
|
1,052 |
|
(100.0 |
)% |
||
Adjusted EBITDA (non-GAAP) | $ |
107,100 |
|
$ |
125,785 |
|
(14.9 |
)% |
||
Basis Point Change |
||||||||||
Adjusted EBITDA as a percentage of net sales | ||||||||||
Adjusted EBITDA margin |
|
11.5 |
% |
|
13.1 |
% |
(160 |
) |
||
Operating Free Cash Flow: |
|
2023 |
|
|
2022 |
|
Percentage Change |
|||
Net cash provided by operating activities | $ |
51,020 |
|
$ |
54,951 |
|
(7.2 |
)% |
||
Less: | ||||||||||
Payments for property and equipment, net |
|
30,551 |
|
|
25,007 |
|
22.2 |
% |
||
Operating free cash flow (non-GAAP) | $ |
20,469 |
|
$ |
29,944 |
|
(31.6 |
)% |
||
Supplemental Schedule 4 |
||||||||
|
||||||||
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
|
||||||||
As of December 31, | ||||||||
2023 |
2022 |
Change | ||||||
Number of stores: | ||||||||
SBS stores | 3,143 |
|
3,146 |
|
(3 |
) |
||
Franchise stores | — |
|
- |
|
- |
|
||
Total SBS | 3,143 |
|
3,146 |
|
(3 |
) |
||
BSG: | ||||||||
Company-operated stores | 1,200 |
|
1,220 |
|
(20 |
) |
||
Franchise stores | 132 |
|
132 |
|
— |
|
||
Total BSG | 1,332 |
|
1,352 |
|
(20 |
) |
||
Total consolidated | 4,475 |
|
4,498 |
|
(23 |
) |
||
Number of BSG distributor sales consultants (1) | 656 |
|
688 |
|
(32 |
) |
||
(1) BSG distributor sales consultants (DSC) include 185 and 191 sales consultants employed by our franchisees at December 31, 2023 and 2022, respectively. | ||||||||
Three Months Ended December 31, | ||||||||
2023 |
2022 |
Basis Point Change |
||||||
Comparable sales growth (decline): | ||||||||
SBS | (1.9 |
)% |
3.0 |
% |
(490 |
) |
||
BSG | 0.7 |
% |
(1.5 |
)% |
220 |
|
||
Consolidated | (0.8 |
)% |
1.1 |
% |
(190 |
) |
||
Our comparable sales include sales from stores that have been operating for 14 months or longer as of the last day of a month and e-commerce revenue. Additionally, our comparable sales include sales to franchisees and full service sales. Our comparable sales excludes the effect of changes in foreign exchange rates and sales from stores relocated until 14 months after the relocation. Revenue from acquisitions are excluded from our comparable sales calculation until 14 months after the acquisition. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240201910240/en/
Jeff Harkins
Investor Relations
940-297-3877
jharkins@sallybeauty.com
Source: Sally Beauty Holdings, Inc.
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