- Q2 Consolidated Comparable Sales Increased 5.7%
- Q2 GAAP Operating Margin of 7.8%; Adjusted Operating Margin of
8.3%
- Q2 GAAP Diluted EPS of $0.37; Adjusted Diluted EPS of
$0.41
- Successfully Refinanced $406 Million Term Loan; Maturity
Extended to 2030
- Maintains Full Year Fiscal 2023 Guidance
Sally Beauty Holdings, Inc. (NYSE: SBH) (“the Company”), the
leader in professional hair color, today announced financial
results for its second quarter ended March 31, 2023. The Company
will hold a conference call today at 7:30 a.m. Central Time to
discuss these results and its business.
Fiscal 2023 Second Quarter Summary
- Consolidated net sales of $919 million, an increase of 0.8%
compared to the prior year;
- Consolidated comparable sales increased 5.7%;
- Global e-commerce sales increased 9% to $87 million,
representing 9.5% of net sales;
- GAAP gross margin at 51.0%; Adjusted Gross Margin at
50.7%;
- GAAP operating earnings of $71 million and GAAP operating
margin of 7.8%; Adjusted Operating Earnings of $76 million and
Adjusted Operating Margin of 8.3%; and
- GAAP diluted net earnings per share of $0.37 and Adjusted
Diluted Net Earnings Per Share of $0.41.
“We are pleased to report solid financial results, which reflect
strong and consistent execution by our teams, including our ongoing
focus on prioritizing our customers,” said Denise Paulonis,
president and chief executive officer. “We delivered second quarter
net sales of $919 million, a comparable sales increase of 6%,
Adjusted Gross Margin of 51% and Adjusted EBITDA of $105 million.
During the quarter, we also further optimized our capital structure
with the successful refinancing of our $406 million term loan.”
“As part of our focus on customer centricity, we recently
launched our first ‘Studio By Sally’ concept store in the
Dallas/Ft. Worth market – a new digital-first, DIY-centric salon.
As we look ahead, our focus remains on serving our customers and
driving long-term growth and shareholder value through our ongoing
efforts around our strategic initiatives: enhancing our customer
centricity, growing high margin owned brands and amplifying
innovation, and increasing the efficiency of our operations and
optimizing our capabilities.”
Fiscal 2023 Second Quarter Operating Results
Second quarter consolidated net sales were $918.7 million, an
increase of 0.8% compared to the prior year. The Company was
operating 378 fewer stores at the end of the quarter compared to
the prior year. Foreign currency translation had an unfavorable
impact of 80 basis points on consolidated net sales for the
quarter. At constant currency, global e-commerce sales increased 9%
compared to the prior year to $87 million or 9.5% of consolidated
net sales for the quarter.
Consolidated comparable sales increased 5.7%, driven primarily
by strong sales recapture rates from the Company’s recent store
optimization efforts and the lapping of the prior year’s impact
from Omicron, supply chain challenges and the onset of inflationary
pressures.
Consolidated gross profit for the second quarter was $468.3
million compared to $465.3 million in the prior year, an increase
of 0.6%. Consolidated GAAP gross margin was 51.0%, a decrease of 10
basis points compared to 51.1% in the prior year. Adjusted Gross
Margin, which excludes the true-up of a non-cash inventory
write-down in the fourth quarter of fiscal 2022 related to the
Company’s previously announced distribution center consolidation
and store optimization plan, as well as the write-down of COVID-19
related personal-protective equipment inventory in the second
quarter of fiscal 2022, was 50.7%, a decrease of 70 basis points
compared to 51.4% in the prior year. Higher product margin at Sally
Beauty, driven by pricing leverage and higher owned brand
penetration, was more than offset by lower product margin at Beauty
Systems Group resulting from an unfavorable sales mix shift between
the segment’s stores and expanded Regis partnership, as well as a
shift in some distribution center costs from selling, general and
administrative expenses into gross margin.
Selling, general and administrative (SG&A) expenses totaled
$389.7 million, an increase of $10.8 million compared to $378.9
million in the prior year. Adjusted Selling, General and
Administrative Expenses, excluding COVID-19 related net expenses
and other adjustments, were $389.7 million, an increase of $11.7
million compared to $378.0 million in the prior year. The increase
was driven primarily by higher labor, accrued bonus, and
advertising costs, partially offset by the savings from the
Company’s previously announced distribution center consolidation
and store optimization plan. As a percentage of sales, Adjusted
SG&A expenses were 42.4% compared to 41.5% in the prior
year.
GAAP operating earnings and operating margin in the second
quarter were $71.4 million and 7.8%, compared to $86.5 million and
9.5%, in the prior year. Adjusted Operating Earnings and Operating
Margin, excluding the Company’s restructuring efforts, COVID-19
related net expenses and other adjustments, were $76.3 million and
8.3%, compared to $90.2 million and 9.9%, in the prior year.
GAAP net earnings in the second quarter were $40.9 million, or
$0.37 per diluted share, compared to GAAP net earnings of $46.8
million, or $0.42 per diluted share in the prior year. Adjusted Net
Earnings, excluding the Company’s restructuring efforts, COVID-19
related net expenses and other adjustments, were $44.6 million, or
$0.41 per diluted share, compared to Adjusted Net Earnings of $51.9
million, or $0.47 per diluted share in the prior year. Adjusted
EBITDA in the second quarter was $105.2 million, a decrease of 9.5%
compared to the prior year, and Adjusted EBITDA Margin was 11.5%, a
decrease of 130 basis points compared to the prior year.
Balance Sheet and Cash Flow
As of March 31, 2023, the Company had cash and cash equivalents
of $62 million and an outstanding balance of $34 million under its
asset-based revolving line of credit. At the end of the quarter,
inventory was $1.02 billion, up 6.3% versus a year ago, driven
primarily by higher product costs, improved in-stock levels and
timing of inventory receipts. Second quarter cash flow from
operations was $24.7 million. Capital expenditures in the quarter
totaled $17.2 million.
The Company ended the quarter with a net debt leverage ratio of
2.2x.
On February 28, 2023, the Company completed the refinancing of
its $406 million term loan with a new term loan that extends the
maturity from July 2024 to February 2030. The new term loan has an
aggregate principal amount of $400 million and bears interest at a
floating rate equal to 1-month term SOFR (secured overnight
financing rate) plus a spread of 250 basis points. Subsequent to
the end of the second quarter, the Company entered into a 3-year
interest rate swap agreement on April 28, 2023, which swaps a
notional amount of $200 million of the new term loan from a
floating term SOFR rate to a fixed rate of 3.705%.
Fiscal 2023 Second Quarter Segment Results
Sally Beauty Supply
- Segment net sales were $530.2 million in the quarter, an
increase of 0.8% compared to the prior year. The segment operated
356 fewer stores at the end of the quarter compared to the prior
year and had an unfavorable impact of 90 basis points from foreign
currency translation on reported sales. At constant currency,
segment e-commerce sales increased 7% to $34 million or 6.4% of
segment net sales for the quarter.
- Segment comparable sales increased 9.1% in the second quarter,
driven primarily by strong sales recapture rates from the Company’s
recent store optimization efforts and the lapping of the prior
year’s impact from Omicron, supply chain challenges and the onset
of inflationary pressures. The Sally Beauty businesses in the U.S.
and Canada represented 79% of segment net sales for the quarter and
had a comparable sales increase of 9.8%.
- At the end of the quarter, net store count was 3,143.
- GAAP gross margin increased by 100 basis points to 59.8%
compared to the prior year. The increase was primarily driven by
higher product margin from pricing leverage and higher owned brand
penetration, and the favorable true-up of a non-cash inventory
write-down in the fourth quarter of fiscal 2022 related to the
Company’s previously announced distribution center consolidation
and store optimization plan.
- GAAP operating earnings were $92.1 million compared to $80.9
million in the prior year, representing an increase of 13.8%. GAAP
operating margin increased to 17.4% compared to 15.4% in the prior
year.
Beauty Systems Group
- Segment net sales were $388.5 million in the quarter, an
increase of 0.7% compared to the prior year. The segment operated
22 fewer stores at the end of the quarter compared to the prior
year and had an unfavorable impact of 50 basis points on reported
sales from foreign currency translation. At constant currency,
segment e-commerce sales increased 11% to $53 million or 13.7% of
segment net sales for the quarter.
- Segment comparable sales increased 1.3% in the second quarter,
primarily reflecting the lapping of the prior year’s impact from
supply chain challenges and Omicron, partially offset by continued
inflationary pressures resulting in stylists buying closer to
need.
- At the end of the quarter, net store count was 1,341.
- GAAP gross margin decreased 160 basis points to 38.9% in the
quarter compared to the prior year, driven primarily by lower
product margin from an unfavorable sales mix shift between the
segment’s stores and expanded Regis partnership, as well as a shift
in some distribution center costs from selling, general and
administrative expenses into gross margin.
- GAAP operating earnings were $37.3 million in the quarter, a
decrease of 19.0% compared to $46.0 million in the prior year. GAAP
operating margin in the quarter was 9.6% compared to 11.9% in the
prior year.
- At the end of the quarter, there were 675 distributor sales
consultants compared to 712 in the prior year.
Fiscal Year 2023 Guidance
The Company is maintaining the following guidance for full
fiscal year 2023:
- Comparable sales, notwithstanding a notable change in consumer
behavior, are expected to increase by low single digits compared to
the prior year, driven by growth in key categories, sales transfer
from store closures related to the Company’s store optimization
efforts, the expanded Regis distribution and new strategic
initiatives;
- Net sales are expected to decline by low-single digits compared
to the prior year, reflecting the unfavorable impact due to store
closures from the Company’s store optimization efforts, net of
expected sales recapture rates, and the anticipated unfavorable
impact from foreign exchange headwinds;
- Gross margin is expected to remain above 50%; and
- Adjusted Operating Margin is expected to be in the range of
8.5% and 9.5%, inclusive of investment in store labor as the
Company focuses on elevating the expertise of its associates to
drive growth in the coming years.
- 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, May 4, 2023. 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) 226-8143 (International:
(234) 720-6981) and referencing the access code 5883157#. 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, May 4, 2023, through May 18, 2023, by dialing (866) 207-1041
(International: (402) 970-0847) and referencing access code
6468365#. 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®, Strawberry Leopard®,
Generic Value Products®, Beyond the Zone® and Silk Elements® as
well as professional lines such as Wella®, Clairol®, OPI®, Conair®
and L’Oreal®. 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®
and Olaplex®, 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, but not limited to, the
risks and uncertainties related to COVID-19, and its continuing
impact on the economy and 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, 2022. 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 the United States, or
GAAP, and are therefore referred to as non-GAAP financial measures:
(1) Adjusted Gross Margin; (2) Adjusted Selling, General and
Administrative Expenses; (3) Adjusted EBITDA and EBITDA Margin; (4)
Adjusted Operating Earnings and Operating Margin; (5) Adjusted Net
Earnings; (6) Adjusted Diluted Net Earnings Per Share; and (7)
Operating Free Cash Flow. We have provided definitions below for
these non-GAAP financial measures and have provided tables in the
schedules hereto to reconcile these non-GAAP financial measures to
the comparable GAAP financial measures.
Adjusted Gross Margin – We define the measure Adjusted Gross
Margin as GAAP gross margin excluding the true-up of the inventory
non-cash write-down and the write-down of COVID-19 related
personal-protective equipment inventory 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 COVID-19 net expenses and other adjustments 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,
COVID-19 related net expenses and other adjustments 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, net expenses related
to COVID-19 and other adjustments 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 net expenses related to COVID-19,
and tax-effected other adjustments 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 net expenses related to COVID-19, and tax-effected
other adjustments 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
2-3
Non-GAAP Financial Measures
Reconciliations; Adjusted EBITDA and
Operating Free Cash Flow
4
Store Count and Comparable Sales
5
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings (In thousands, except
per share data) (Unaudited)
Three Months Ended
March 31, Six Months Ended March 31,
2023
2022
PercentageChange
2023
2022
PercentageChange Net sales
$
918,712
$
911,387
0.8
%
$
1,875,767
$
1,891,638
(0.8
)%
Cost of products sold
450,373
446,055
1.0
%
918,854
926,177
(0.8
)%
Gross profit
468,339
465,332
0.6
%
956,913
965,461
(0.9
)%
Selling, general and administrative expenses
389,657
378,871
2.8
%
781,237
765,121
2.1
%
Restructuring
7,274
—
100.0
%
17,680
1,099
1508.7
%
Operating earnings
71,408
86,461
(17.4
)%
157,996
199,241
(20.7
)%
Interest expense
16,685
19,896
(16.1
)%
34,608
40,137
(13.8
)%
Earnings before provision for income taxes
54,723
66,565
(17.8
)%
123,388
159,104
(22.4
)%
Provision for income taxes
13,862
19,757
(29.8
)%
32,190
43,458
(25.9
)%
Net earnings
$
40,861
$
46,808
(12.7
)%
$
91,198
$
115,646
(21.1
)%
Earnings per share: Basic
$
0.38
$
0.43
(11.6
)%
$
0.85
$
1.05
(19.0
)%
Diluted
$
0.37
$
0.42
(11.9
)%
$
0.83
$
1.03
(19.4
)%
Weighted average shares: Basic
107,453
108,743
107,294
110,387
Diluted
109,706
110,540
109,499
112,207
Basis PointChange Basis PointChange Comparison as a percentage of net sales
Consolidated gross margin
51.0
%
51.1
%
(10
)
51.0
%
51.0
%
0
Selling, general and administrative expenses
42.4
%
41.6
%
80
41.6
%
40.4
%
120
Consolidated operating margin
7.8
%
9.5
%
(170
)
8.4
%
10.5
%
(210
)
Effective tax rate
25.3
%
29.7
%
(440
)
26.1
%
27.3
%
(120
)
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (In thousands) (Unaudited)
March 31,2023 September 30,2022 Cash
and cash equivalents
$
61,620
$
70,558
Trade and other accounts receivable
75,663
72,277
Inventory
1,023,656
936,374
Other current assets
48,072
53,192
Total current assets
1,209,011
1,132,401
Property and equipment, net
283,356
297,876
Operating lease assets
562,336
532,177
Goodwill and other intangible assets
584,751
576,381
Other assets
35,660
38,032
Total assets
$
2,675,114
$
2,576,867
Current maturities of long-term debt
$
38,175
$
68,658
Accounts payable
265,075
275,717
Accrued liabilities
168,187
161,065
Current operating lease liabilities
154,255
157,734
Income taxes payable
4,949
4,740
Total current liabilities
630,641
667,914
Long-term debt, including capital leases
1,065,439
1,083,043
Long-term operating lease liabilities
444,819
424,762
Other liabilities
22,044
22,427
Deferred income tax liabilities, net
86,283
85,085
Total liabilities
2,249,226
2,283,231
Total stockholders’ equity
425,888
293,636
Total liabilities and stockholders’ equity
$
2,675,114
$
2,576,867
Supplemental Schedule 1
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Segment
Information (In thousands) (Unaudited)
Three Months Ended
March 31, Six Months Ended March 31,
2023
2022
PercentageChange
2023
2022
PercentageChange Net sales: Sally Beauty Supply ("SBS")
$
530,246
$
525,785
0.8
%
$
1,079,718
$
1,087,315
(0.7
)%
Beauty Systems Group ("BSG")
388,466
385,602
0.7
%
796,049
804,323
(1.0
)%
Total net sales
$
918,712
$
911,387
0.8
%
$
1,875,767
$
1,891,638
(0.8
)%
Operating earnings: SBS
$
92,134
$
80,940
13.8
%
$
191,308
$
181,563
5.4
%
BSG
37,260
46,008
(19.0
)%
86,907
104,554
(16.9
)%
Segment operating earnings
129,394
126,948
1.9
%
278,215
286,117
(2.8
)%
Unallocated expenses (1)
50,712
40,487
25.3
%
102,539
85,777
19.5
%
Restructuring
7,274
—
100.0
%
17,680
1,099
1508.7
%
Interest expense
16,685
19,896
(16.1
)%
34,608
40,137
(13.8
)%
Earnings before provision for income taxes
$
54,723
$
66,565
(17.8
)%
$
123,388
$
159,104
(22.4
)%
Segment gross margin:
2023
2022
Basis PointChange
2023
2022
Basis PointChange SBS
59.8
%
58.8
%
100
59.3
%
58.6
%
70
BSG
38.9
%
40.5
%
(160
)
39.7
%
40.8
%
(110
)
Segment operating margin: SBS
17.4
%
15.4
%
200
17.7
%
16.7
%
100
BSG
9.6
%
11.9
%
(230
)
10.9
%
13.0
%
(210
)
Consolidated operating margin
7.8
%
9.5
%
(170
)
8.4
%
10.5
%
(210
)
(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 March 31,
2023 As Reported(GAAP) Restructuring(1) As Adjusted(Non-GAAP)
Cost of products sold
$
450,373
$
2,362
$
452,735
Consolidated gross margin
51.0
%
50.7
%
Selling, general and administrative expenses
389,657
—
389,657
SG&A expenses, as a percentage of sales
42.4
%
42.4
%
Operating earnings
71,408
4,912
76,320
Operating margin
7.8
%
8.3
%
Earnings before provision for income taxes
54,723
4,912
59,635
Provision for income taxes (3)
13,862
1,222
15,084
Net earnings
$
40,861
$
3,690
$
44,551
Earnings per share: Basic
$
0.38
$
0.03
$
0.41
Diluted
$
0.37
$
0.03
$
0.41
Three Months Ended March 31, 2022 As Reported(GAAP)
Restructuringand Other(1) COVID-19(2) As Adjusted(Non-GAAP)
Cost of products sold
$
446,055
$
—
$
(2,841
)
$
443,214
Consolidated gross margin
51.1
%
51.4
%
Selling, general and administrative expenses
378,871
27
(938
)
377,960
SG&A expenses, as a percentage of sales
41.6
%
41.5
%
Operating earnings
86,461
(27
)
3,779
90,213
Operating margin
9.5
%
9.9
%
Earnings before provision for income taxes
66,565
(27
)
3,779
70,317
Provision for income taxes (3)
19,757
(2,400
)
1,099
18,456
Net earnings
$
46,808
$
2,373
$
2,680
$
51,861
Earnings per share: Basic
$
0.43
$
0.02
$
0.02
$
0.48
Diluted
$
0.42
$
0.02
$
0.02
$
0.47
(1) For the three months ended March 31, 2023,
restructuring represents expenses incurred primarily with the
closure of stores in connection with our Distribution Center
Consolidation and Store Optimization Plan, including $2.4 million
in cost of products sold related to adjustments to our expected
obsolescence reserve. For the three months ended March 31, 2022,
restructuring and other represents an adjustment for the cancelled
debt offering during our first fiscal quarter of fiscal year 2022.
(2) For the three months ended March 31, 2022,
COVID-19-related expense is comprised of obsolete
personal-protective equipment inventory ("PPE") included in costs
of products sold of $2.8 million as well as costs associated with
vaccinations and testing in selling, general and administrative
expenses. (3) 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. Additionally, for the
three months ended March 31, 2022, provision for income taxes
includes the impact of a deferred tax asset write-down related to
expired options in connection with the Transformation Plan.
Supplemental Schedule 3
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES Non-GAAP
Financial Measures Reconciliations, Continued (In thousands, except
per share data) (Unaudited)
Six Months Ended March 31,
2023 As Reported Restructuring(1) COVID-19(2) As
Adjusted(Non-GAAP) Cost of products sold
$
918,854
$
5,043
$
—
$
923,897
Consolidated gross margin
51.0
%
50.7
%
Selling, general and administrative expenses
781,237
—
(1,052
)
780,185
SG&A expenses, as a percentage of sales
41.6
%
41.6
%
Operating earnings
157,996
12,637
1,052
171,685
Operating margin
8.4
%
9.2
%
Earnings before provision for income taxes
123,388
12,637
1,052
137,077
Provision for income taxes (3)
32,190
3,198
270
35,658
Net earnings
$
91,198
$
9,439
$
782
$
101,419
Earnings per share: Basic
$
0.85
$
0.09
$
0.01
$
0.95
Diluted
$
0.83
$
0.09
$
0.01
$
0.93
Six Months Ended March 31, 2022 As Reported
Restructuringand Other(1) COVID-19(2) As Adjusted(Non-GAAP)
Cost of products sold
$
926,177
$
—
$
(2,841
)
$
923,336
Consolidated gross margin
51.0
%
51.2
%
Selling, general and administrative expenses
765,121
(1,546
)
(2,078
)
761,497
SG&A expenses, as a percentage of sales
40.4
%
40.3
%
Operating earnings
199,241
2,645
4,919
206,805
Operating margin
10.5
%
10.9
%
Earnings before provision for income taxes
159,104
2,645
4,919
166,668
Provision for income taxes (3)
43,458
(1,804
)
1,393
43,047
Net earnings
$
115,646
$
4,449
$
3,526
$
123,621
Earnings per share: Basic
$
1.05
$
0.04
$
0.03
$
1.12
Diluted
$
1.03
$
0.04
$
0.03
$
1.10
(1) For the six months ended March 30, 2023,
restructuring represents expenses incurred primarily in connection
with our Distribution Center Consolidation and Store Optimization
Plan, including $5.0 million in cost of products sold related to
adjustments to our expected obsolescence reserve. For the six
months ended March 31, 2022, restructuring and other represents
costs and expenses incurred primarily in connection with the
Transformation Plan and cancelled debt offering during the period.
(2) For the six months ended March 30, 2023, COVID-19
expenses related to use taxes around the donation of personal
protection merchandise. For the six months ended March 31, 2022,
COVID-19-related expense is comprised of obsolete PPE included in
costs of products sold of $2.8 million as well as costs associated
with vaccinations and testing in selling, general and
administrative expenses. (3) 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.
Additionally, for the six months ended March 30, 2022, provision
for income taxes includes the impact of a deferred tax asset
write-down related to expired options in connection with the
Transformation Plan. Supplemental Schedule 4
SALLY BEAUTY
HOLDINGS, INC. AND SUBSIDIARIES Non-GAAP Financial Measures
Reconciliations, Continued (In thousands) (Unaudited)
Three Months Ended March 31, Six Months Ended March
31, Adjusted EBITDA:
2023
2022
PercentageChange
2023
2022
PercentageChange Net earnings
$
40,861
$
46,808
(12.7
)%
$
91,198
$
115,646
(21.1
)%
Add: Depreciation and amortization
25,062
24,050
4.2
%
50,347
48,471
3.9
%
Interest expense
16,685
19,896
(16.1
)%
34,608
40,137
(13.8
)%
Provision for income taxes
13,862
19,757
(29.8
)%
32,190
43,458
(25.9
)%
EBITDA (non-GAAP)
96,470
110,511
(12.7
)%
208,343
247,712
(15.9
)%
Share-based compensation
3,838
2,032
88.9
%
8,973
5,990
49.8
%
Restructuring and other
4,912
(27
)
18292.6
%
12,637
2,645
377.8
%
COVID-19
-
3,779
(100.0
)%
1,052
4,919
(78.6
)%
Adjusted EBITDA (non-GAAP)
$
105,220
$
116,295
(9.5
)%
$
231,005
$
261,266
(11.6
)%
Basis PointChange Basis PointChange
Adjusted EBITDA as a percentage of net
sales Adjusted EBITDA margin
11.5
%
12.8
%
(130
)
12.3
%
13.8
%
(150
)
Operating Free Cash Flow:
2023
2022
PercentageChange
2023
2022
PercentageChange Net cash provided (used) by operating
activities
$
24,697
$
2,912
748.1
%
$
79,648
$
(2,773
)
2972.3
%
Less: Payments for property and equipment, net
17,174
17,719
(3.1
)%
42,181
44,109
(4.4
)%
Operating free cash flow (non-GAAP)
$
7,523
$
(14,807
)
150.8
%
$
37,467
$
(46,882
)
179.9
%
Supplemental Schedule 5
SALLY BEAUTY HOLDINGS, INC.
AND SUBSIDIARIES
Store Count and Comparable
Sales
(Unaudited)
As of March 31,
2023
2022
Change Number of stores: SBS: Company-operated stores (1)
3,143
3,498
(355
)
Franchise stores
-
1
(1
)
Total SBS
3,143
3,499
(356
)
BSG: Company-operated stores (1)
1,209
1,232
(23
)
Franchise stores
132
131
1
Total BSG
1,341
1,363
(22
)
Total consolidated
4,484
4,862
(378
)
Number of BSG distributor sales consultants (2)
675
712
(37
)
(1) Store count was impacted by the closure of 329 SBS
stores and 28 BSG stores related to our Distribution Center and
Site Optimization Plan. (2) BSG distributor sales consultants (DSC)
include 189 sales consultants employed by our franchisees at March
31, 2023 and 2022.
Three Months Ended March 31,
Six Months Ended March 31,
2023
2022
Basis PointChange
2023
2022
Basis PointChange Comparable sales growth (decline): SBS
9.1
%
(0.5
)%
960
5.9
%
2.0
%
390
BSG
1.3
%
1.3
%
0
(0.2
)%
4.9
%
(510
)
Consolidated
5.7
%
0.2
%
550
3.3
%
3.2
%
10
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/20230504005458/en/
Jeff Harkins Investor Relations 940-297-3877
jharkins@sallybeauty.com
Sally Beauty (NYSE:SBH)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Sally Beauty (NYSE:SBH)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024