{"id":13298,"date":"2024-06-11T14:15:09","date_gmt":"2024-06-11T14:15:09","guid":{"rendered":"https:\/\/www.l3corp.net\/wordpress\/?p=13298"},"modified":"2024-06-21T14:51:01","modified_gmt":"2024-06-21T14:51:01","slug":"sally-beauty-holdings-reports-second-quarter-fiscal-2024-results","status":"publish","type":"post","link":"https:\/\/www.l3corp.net\/wordpress\/2024\/sally-beauty-holdings-reports-second-quarter-fiscal-2024-results\/","title":{"rendered":"Sally Beauty Holdings Reports Second Quarter Fiscal 2024 Results"},"content":{"rendered":"<p>Original Article By:<a href=\"https:\/\/www.sallybeautyholdings.com\/investor-relations\/press-releases\/2024\/05-09-2024-114518933\"> Sally Beauty Holdings, Inc.<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-13484\" src=\"https:\/\/www.l3corp.net\/wordpress\/wp-content\/uploads\/2024\/06\/Sally-Beauty-2nd-Quarter-2024-300x158.png\" alt=\"\" width=\"300\" height=\"158\" srcset=\"https:\/\/www.l3corp.net\/wordpress\/wp-content\/uploads\/2024\/06\/Sally-Beauty-2nd-Quarter-2024-300x158.png 300w, https:\/\/www.l3corp.net\/wordpress\/wp-content\/uploads\/2024\/06\/Sally-Beauty-2nd-Quarter-2024-1024x538.png 1024w, https:\/\/www.l3corp.net\/wordpress\/wp-content\/uploads\/2024\/06\/Sally-Beauty-2nd-Quarter-2024-768x403.png 768w, https:\/\/www.l3corp.net\/wordpress\/wp-content\/uploads\/2024\/06\/Sally-Beauty-2nd-Quarter-2024.png 1200w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p>May 09, 2024<\/p>\n<div class=\"pr-body float100\">\n<div class=\"pr-headline float100\"><\/div>\n<ul class=\"bwlistdisc\">\n<li><i>Generated Q2 Cash Flow from Operations of\u00a0$37 Million<\/i><\/li>\n<li><i>Executed\u00a0$20 Million\u00a0in Share Repurchases<\/i><\/li>\n<li><i>Completed the Refinancing of the\u00a0$680 Million\u00a0Senior Unsecured Note Due 2025<\/i><\/li>\n<li><i>Updates Fiscal 2024 Guidance<\/i><\/li>\n<\/ul>\n<p>DENTON, Texas&#8211;(BUSINESS WIRE)&#8211; Sally Beauty Holdings, Inc. (NYSE: SBH) (\u201cthe Company\u201d), the leader in professional hair color, today announced financial results for its second quarter ended March 31, 2024. The Company will hold a conference call today at 7:30 a.m. Central Time to discuss these results and its business.<\/p>\n<p><b>Fiscal 2024 Second Quarter Summary<\/b><\/p>\n<ul class=\"bwlistdisc\">\n<li>Consolidated net sales of\u00a0$908 million, a decrease of 1.1% compared to the prior year;<\/li>\n<li>Consolidated comparable sales decline of 1.5%;<\/li>\n<li>Global e-commerce sales of\u00a0$90 million, representing 9.9% of net sales;<\/li>\n<li>GAAP gross margin 51.0%;<\/li>\n<li>GAAP operating earnings of\u00a0$60 million\u00a0and GAAP operating margin of 6.6%; Adjusted Operating Earnings of\u00a0$69 million\u00a0and Adjusted Operating Margin of 7.6%;<\/li>\n<li>GAAP diluted net earnings per share of\u00a0$0.27\u00a0and Adjusted Diluted Net Earnings Per Share of\u00a0$0.35; and<\/li>\n<li>Cash flow from operations of\u00a0$37 million\u00a0and Operating Free Cash Flow of\u00a0$23 million.<\/li>\n<\/ul>\n<p>\u201cOur second quarter performance reflects the benefits of expanded distribution, product innovation and the strengthening of salon demand trends in our Beauty Systems Group segment, offset by moderating traffic and customer purchasing patterns in our Sally Beauty segment resulting from the inflationary environment,\u201d said Denise Paulonis, president and chief executive officer. \u201cAmidst these cross-currents, our teams continued to advance our strategic initiatives and deliver engaging experiences for our customers as we focus on driving long-term growth and profitability.\u201d<\/p>\n<p>Paulonis added, \u201cWe further optimized our balance sheet by refinancing our\u00a0$680 million\u00a0senior unsecured note due 2025, which extended the maturity to 2032. We also generated solid cash flow from operations of\u00a0$37 million\u00a0in the quarter, allowing us to return value to shareholders through our share repurchase program.\u201d<\/p>\n<p><b>Fiscal 2024 Second Quarter Operating Results<\/b><\/p>\n<p>Second quarter consolidated net sales were\u00a0$908.4 million, a decrease of 1.1% compared to the prior year. Foreign currency translation had a favorable impact of 50 basis points on consolidated net sales for the quarter. At constant currency, global e-commerce sales were\u00a0$90 million\u00a0or 9.9% of consolidated net sales for the quarter.<\/p>\n<p>Consolidated comparable sales declined 1.5%, primarily reflecting soft traffic and consumer purchasing trends at Sally Beauty driven by the inflationary environment, partially offset by expanded distribution, product innovation and improving salon demand trends at Beauty Systems Group.<\/p>\n<p>Consolidated gross profit for the second quarter was\u00a0$463.1 million\u00a0compared to\u00a0$468.3 million\u00a0in the prior year, a decrease of 1.1%. Consolidated GAAP gross margin was 51.0%, which was flat to the prior year<b><\/b>of 51.0%. Excluding the prior year\u2019s true-up of the non-cash inventory write-down as part of the Company\u2019s previously announced distribution center consolidation and store optimization plan, Adjusted Gross Margin was 51.0%, an increase of 30 basis points compared to 50.7% in the prior year. The increase was driven primarily by lower distribution and freight costs from supply chain efficiencies, partially offset by an unfavorable sales mix shift between Sally Beauty (higher margin) and Beauty Systems Group (lower margin).<\/p>\n<p>Selling, general and administrative (SG&amp;A) expenses totaled\u00a0$403.4 million, an increase of\u00a0$13.8 million\u00a0compared to the prior year. Adjusted Selling, General and Administrative Expenses, excluding costs related to the Company\u2019s fuel for growth initiative and other expenses, totaled\u00a0$394.5 million, an increase of\u00a0$4.8 million\u00a0compared to the prior year. The increase was driven primarily by higher labor costs and rent expense, partially offset by lower accrued bonus expense. As a percentage of sales, Adjusted SG&amp;A expenses were 43.4% compared to 42.4% in the prior year.<\/p>\n<p>GAAP operating earnings and operating margin in the second quarter were\u00a0$59.6 million\u00a0and 6.6%, compared to\u00a0$71.4 million\u00a0and 7.8%, in the prior year. Adjusted Operating Earnings and Operating Margin, excluding the costs related to the Company\u2019s fuel for growth initiative, restructuring efforts, and other expenses, were\u00a0$68.6 million\u00a0and 7.6%, compared to\u00a0$76.3 million\u00a0and 8.3%, in the prior year.<\/p>\n<p>GAAP net earnings in the second quarter were\u00a0$29.2 million, or\u00a0$0.27\u00a0per diluted share, compared to GAAP net earnings of\u00a0$40.9 million, or\u00a0$0.37\u00a0per diluted share in the prior year. Adjusted Net Earnings, excluding the costs related to the Company\u2019s fuel for growth initiative, loss on debt extinguishment, restructuring efforts, and other expenses, were\u00a0$37.8 million, or\u00a0$0.35\u00a0per diluted share, compared to Adjusted Net Earnings of\u00a0$44.6 million, or\u00a0$0.41\u00a0per diluted share in the prior year. Adjusted EBITDA in the second quarter was\u00a0$99.5<b><\/b>million, a decrease of 5.4% compared to the prior year, and Adjusted EBITDA Margin was 11.0%, a decrease of 50 basis points compared to the prior year.<\/p>\n<p><b>Balance Sheet and Cash Flow<\/b><\/p>\n<p>As of March 31, 2024, the Company had cash and cash equivalents of\u00a0$97 million\u00a0and a\u00a0$62 million\u00a0balance outstanding under its asset-based revolving line of credit. At the end of the quarter, inventory was\u00a0$1.04 billion, up 1.6% versus a year ago. The Company ended the quarter with a net debt leverage ratio of 2.2x.<\/p>\n<p>During the second quarter, the Company issued a new\u00a0$600 million\u00a08-year senior unsecured note due 2032. The net proceeds from the transaction, in combination with existing cash and a modest draw under the Company\u2019s asset-based revolving line of credit, were used to refinance the Company\u2019s\u00a0$680 million\u00a05.625% senior unsecured note due 2025. The new senior unsecured note was issued with a coupon rate of 6.75%.<\/p>\n<p>Second quarter cash flow from operations was\u00a0$36.9 million. Capital expenditures in the quarter totaled\u00a0$14.1 million. During the quarter, the Company repurchased 1.5 million shares under its share repurchase program at an aggregate cost of\u00a0$20 million.<\/p>\n<p><b>Fiscal 2024 Second Quarter Segment Results<\/b><\/p>\n<p><b>Sally Beauty Supply<\/b><\/p>\n<ul class=\"bwlistdisc\">\n<li>Segment net sales were\u00a0$513.2 million\u00a0in the quarter, a decrease of 3.2% compared to the prior year. The segment had a favorable impact of 90 basis points from foreign currency translation on reported sales. At constant currency, segment e-commerce sales were\u00a0$34 million\u00a0or 6.6% of segment net sales for the quarter.<\/li>\n<li>Segment comparable sales decreased 4.0% in the second quarter, primarily reflecting soft traffic and customer purchasing trends driven by the inflationary environment.<\/li>\n<li>At the end of the quarter, segment store count was 3,134 compared to 3,143 in the prior year.<\/li>\n<li>GAAP gross margin increased by 10 basis points to 59.9% compared to the prior year. The increase was driven primarily by lower distribution and freight costs from supply chain efficiencies, partially offset by the prior year\u2019s true-up of the non-cash inventory write-down as part of the Company\u2019s previously announced distribution center consolidation and store optimization plan.<\/li>\n<li>GAAP operating earnings were\u00a0$76.8 million\u00a0compared to\u00a0$92.1 million\u00a0in the prior year. GAAP operating margin decreased to 15.0% compared to 17.4% in the prior year.<\/li>\n<\/ul>\n<p><b>Beauty Systems Group<\/b><\/p>\n<ul class=\"bwlistdisc\">\n<li>Segment net sales were\u00a0$395.1 million\u00a0in the quarter, an increase of 1.7% compared to the prior year. At constant currency, segment e-commerce sales were\u00a0$56 million\u00a0or 14.1% of segment net sales for the quarter.<\/li>\n<li>Segment comparable sales increased 2.0% in the second quarter, primarily reflecting expanded distribution, product innovation and improving salon demand trends.<\/li>\n<li>At the end of the quarter, net store count was 1,334 compared to 1,341 in the prior year.<\/li>\n<li>GAAP gross margin increased 50 basis points to 39.4% in the quarter compared to the prior year. The increase was driven primarily by lower distribution and freight costs from supply chain efficiencies, partially offset by lower product margin due to a higher take rate on promotions and brand mix.<\/li>\n<li>GAAP operating earnings were\u00a0$43.0 million\u00a0in the quarter compared to\u00a0$37.3 million\u00a0in the prior year. GAAP operating margin in the quarter was 10.9% compared to 9.6% in the prior year.<\/li>\n<li>At the end of the quarter, there were 654 distributor sales consultants compared to 675 in the prior year.<\/li>\n<\/ul>\n<p><b>Fiscal Year 2024 Guidance<\/b><\/p>\n<p>The Company is updating its full year guidance by adjusting its full year operating margin outlook to reflect the Company\u2019s second quarter results, as follows:<\/p>\n<ul class=\"bwlistdisc\">\n<li>The Company continues to expect net sales and comparable sales to be approximately flat compared to the prior year;<\/li>\n<li>Gross Margin is now expected to be in the range of 50.5% to 51.0%;<\/li>\n<li>Adjusted Operating Margin is now expected to be approximately 8.5%;<\/li>\n<li>Operating Cash Flow is now expected to be approximately\u00a0$240 million; and<\/li>\n<li>Capital expenditures are expected to be approximately\u00a0$100 million.<\/li>\n<\/ul>\n<div class=\"auto-scroll\">\n<table class=\"bwtablemarginb bwblockalignl\" cellspacing=\"0\">\n<tbody>\n<tr>\n<td class=\"bwvertalignt\" colspan=\"1\" rowspan=\"1\">*<\/td>\n<td colspan=\"1\" rowspan=\"1\"><\/td>\n<td class=\"bwvertalignt bwpadl0\" colspan=\"1\" rowspan=\"1\">\n<p class=\"bwcellpmargin\">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\u2019s 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.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><b>Conference Call and Where You Can Find Additional Information<\/b><\/p>\n<p>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, May 9, 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\u2019s 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\u2019s website,\u00a0<a href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=https%3A%2F%2Furl.avanan.click%2Fv2%2F___https%3A%2Fwww.sallybeautyholdings.com%2Finvestor-relations___.YXAzOmJsdWVzaGlydDphOm86YmIxMGEwZTE5NjkzOTc5MDljNTg3NDAxNDA1MzkyNjI6Njo1MmNlOmI0OTBjOWVmMTZiMjBhNjRmZWZjMzI2OWMyNmIzY2RmNTE3MjYyNjlmMDFjYTFjNGQ4ZTRjZjljOTYyY2ZiYjM6cDpU&amp;esheet=53979442&amp;newsitemid=20240509744268&amp;lan=en-US&amp;anchor=sallybeautyholdings.com%2Finvestor-relations&amp;index=1&amp;md5=91857fb9ad1beb805c52923f8ee8e2e7\" rel=\"nofollow\" shape=\"rect\">sallybeautyholdings.com\/investor-relations<\/a>. The conference call can be accessed by dialing (877) 336-4440 (International: (409) 207-6984) and referencing the access code 2198500#. The teleconference will be held in a \u201clisten-only\u201d mode for all participants other than the Company\u2019s current sell-side and buy-side investment professionals. A replay of the earnings conference call will be available starting at 11:30 a.m. Central Time, May 9, 2024, through May 23, 2024, by dialing (866) 207-1041 (International: (402) 970-0847) and referencing access code 3810288#. Also, a website replay will be available on\u00a0<a href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=https%3A%2F%2Furl.avanan.click%2Fv2%2F___https%3A%2Fwww.sallybeautyholdings.com%2Finvestor-relations___.YXAzOmJsdWVzaGlydDphOm86YmIxMGEwZTE5NjkzOTc5MDljNTg3NDAxNDA1MzkyNjI6Njo1MmNlOmI0OTBjOWVmMTZiMjBhNjRmZWZjMzI2OWMyNmIzY2RmNTE3MjYyNjlmMDFjYTFjNGQ4ZTRjZjljOTYyY2ZiYjM6cDpU&amp;esheet=53979442&amp;newsitemid=20240509744268&amp;lan=en-US&amp;anchor=sallybeautyholdings.com%2Finvestor-relations&amp;index=2&amp;md5=24e27b0fc6010e7ed8cb6d2314f19a1a\" rel=\"nofollow\" shape=\"rect\">sallybeautyholdings.com\/investor-relations<\/a>.<\/p>\n<p><b>About Sally Beauty Holdings, Inc.<\/b><\/p>\n<p>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\u00ae, Bondbar\u00ae, Strawberry Leopard\u00ae, Generic Value Products\u00ae, Inspired by Nature\u00ae and Silk Elements\u00ae as well as professional lines such as Wella\u00ae, Clairol\u00ae, OPI\u00ae, L\u2019Oreal\u00ae, Wahl\u00ae and Babyliss Pro\u00ae. Beauty Systems Group stores, branded as CosmoProf\u00ae or Armstrong McCall\u00ae stores, along with its outside sales consultants, sell up to 8,000 professionally branded products including Paul Mitchell\u00ae, Wella\u00ae, Matrix\u00ae, Schwarzkopf\u00ae, Kenra\u00ae, Goldwell\u00ae, Joico\u00ae, Amika\u00ae and Moroccannoil\u00ae, intended for use in salons and for resale by salons to retail consumers. For more information about Sally Beauty Holdings, Inc., please visit\u00a0<a href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=https%3A%2F%2Fwww.sallybeautyholdings.com%2F&amp;esheet=53979442&amp;newsitemid=20240509744268&amp;lan=en-US&amp;anchor=https%3A%2F%2Fwww.sallybeautyholdings.com%2F&amp;index=3&amp;md5=5bd7c5f3ea976d7054fed8c712cdda50\" rel=\"nofollow\" shape=\"rect\">https:\/\/www.sallybeautyholdings.com\/<\/a>.<\/p>\n<p><b>Cautionary Notice Regarding Forward-Looking Statements<\/b><\/p>\n<p>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 \u201cbelieves,\u201d \u201cprojects,\u201d \u201cexpects,\u201d \u201ccan,\u201d \u201cmay,\u201d \u201cestimates,\u201d \u201cshould,\u201d \u201cplans,\u201d \u201ctargets,\u201d \u201cintends,\u201d \u201ccould,\u201d \u201cwill,\u201d \u201cwould,\u201d \u201canticipates,\u201d \u201cpotential,\u201d \u201cconfident,\u201d \u201coptimistic,\u201d 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.<\/p>\n<p>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.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Original Article By: Sally Beauty Holdings, Inc. May 09, 2024 Generated Q2 Cash Flow from Operations of\u00a0$37 Million Executed\u00a0$20 Million\u00a0in Share Repurchases Completed the Refinancing of the\u00a0$680 Million\u00a0Senior Unsecured Note Due 2025 Updates Fiscal 2024 Guidance DENTON, Texas&#8211;(BUSINESS WIRE)&#8211; Sally<\/p>\n","protected":false},"author":15,"featured_media":13484,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"footnotes":"","_jetpack_memberships_contains_paid_content":false},"categories":[507],"tags":[],"jetpack_featured_media_url":"https:\/\/www.l3corp.net\/wordpress\/wp-content\/uploads\/2024\/06\/Sally-Beauty-2nd-Quarter-2024.png","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paJlAd-3su","_links":{"self":[{"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/posts\/13298"}],"collection":[{"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/comments?post=13298"}],"version-history":[{"count":3,"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/posts\/13298\/revisions"}],"predecessor-version":[{"id":13486,"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/posts\/13298\/revisions\/13486"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/media\/13484"}],"wp:attachment":[{"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/media?parent=13298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/categories?post=13298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.l3corp.net\/wordpress\/wp-json\/wp\/v2\/tags?post=13298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}