Factors Working in Sally Beauty's Favor The Fuel for Growth initiative ensures Sally Beauty remains poised to achieve increased gross margins and efficiencies in selling, general and administrative expenses (SG&A), while also focusing on growth and enhancing its shareholder value. SBH is projected to realize pre-tax advantages of $20 million in fiscal 2024. Furthermore, it has identified an additional potential pre-tax benefit of around $50 million for fiscal 2025, culminating in cumulative benefits approac ...

This collaboration enables Sally Beauty to provide same-day delivery services from more than 2,200 store locations nationwide. With this service, customers can now have the access to purchase a wide range of beauty products and have them delivered to their doorsteps in as little as an hour. Driving Growth Through Customer-Centricity Management views this partnership as pivotal in advancing its omni-channel approach and commitment to accessibility. The company remains dedicated to prioritizing its customers ...

Core Insights - Sally Beauty has partnered with Instacart to offer same-day delivery of beauty products in as fast as one hour, enhancing its e-commerce capabilities and meeting consumer demand for quick access to beauty essentials [3][5][8] - The partnership allows customers to choose from over 7,000 products available at more than 2,200 Sally Beauty store locations nationwide [8][9] Company Overview - Sally Beauty Holdings, Inc. (NYSE: SBH) is a leading retailer in professional hair color and beauty supplies, offering a wide range of products through its Sally Beauty Supply and Beauty Systems Group businesses [7][8] - The company provides up to 7,000 products for hair color, hair care, nails, and skin care, featuring both proprietary and professional brands [7] Industry Context - Instacart, a leading grocery technology company in North America, partners with over 1,500 retailers to facilitate online shopping and delivery services, transforming the shopping experience for consumers [9] - The collaboration with Sally Beauty is part of Instacart's strategy to expand its offerings beyond groceries, addressing the growing demand for convenience in beauty product delivery [3][9]

Sally Beauty Holdings, Inc. ((SBH) , a specialty retailer of premium, high-quality casual apparel, currently sports a Zacks Rank #1 (Strong Buy). ANF has a trailing four-quarter average earnings surprise of 210.3%. You can see the complete list of today's Zacks #1 Rank stocks here. The Gap Inc. (GPS) , a fashion retailer of apparel and accessories, currently flaunts a Zacks Rank #1. GPS has a trailing four-quarter earnings surprise of 202.7%, on average. DICK'S Sporting Goods (DKS) operates as an omni-chann ...

The beauty retailer is partnering with Free Mom Hugs to offer support at Pride events nationwide and hosting an interactive three-day pop-up experience to get people ready for NYC Pride. DENTON, Texas, May 30, 2024 /PRNewswire/ -- Sally Beauty, the leader in professional hair color and care, is proud to unveil the next installment of the Rooted In Success event series supporting Pride. Following Rooted In Success events supporting Black History Month and Women's History Month, Sally Beauty is celebrating th ...

Sally Beauty Holdings, Inc. (NYSE:SBH) Q2 2024 Earnings Conference Call May 9, 2024 8:30 AM ET Company Participants Jeff Harkins - Vice President, Investor Relations and Treasurer Denise Paulonis - President and Chief Executive Officer Marlo Cormier - Chief Financial Officer Conference Call Participants Oliver Chen - Cowen Olivia Tong - Raymond James Ashley Helgans - Jefferies Simeon Gutman - Morgan Stanley Operator Good morning, everyone and welcome to the Sally Beauty Holdings Conference Call to discuss t ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-33145 SALLY BEAUTY HOLDINGS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2024 or (Exact name of registrant as specified in its charter) Delaware 36-2257936 (State or other jurisdiction of incorporation or organization) (I.R. ...

Financial Performance - Consolidated net sales for Q2 2024 were $908 million, a decrease of 1.1% compared to the prior year[5]. - Consolidated comparable sales declined by 1.5%, primarily due to soft traffic and consumer purchasing trends at Sally Beauty[7]. - GAAP net earnings were $29.2 million, or $0.27 per diluted share, compared to $40.9 million, or $0.37 per diluted share in the prior year[11]. - Operating earnings decreased by 16.6% to $59,574 for the three months ended March 31, 2024, compared to $71,408 in the same period of 2023[37]. - For the three months ended March 31, 2024, net earnings were $29,244,000, a decrease of 28.4% compared to $40,861,000 for the same period in 2023[43]. - Adjusted EBITDA for the three months ended March 31, 2024, was $99,500,000, a decrease of 5.4% from $105,220,000 in the same period of 2023[47]. - For the six months ended March 31, 2024, net earnings were $67,634,000, down 25.8% from $91,198,000 in the same period of 2023[47]. Margins and Expenses - GAAP gross margin was 51.0%, unchanged from the prior year, while adjusted gross margin increased by 30 basis points to 51.0%[8]. - GAAP operating earnings were $60 million with an operating margin of 6.6%, down from $71.4 million and 7.8% in the prior year[10]. - Selling, general and administrative (SG&A) expenses for the three months ended March 31, 2024, were $403,435,000, representing 44.4% of sales, compared to 42.4% in the same period last year[43]. - SG&A expenses as a percentage of sales for the six months ended March 31, 2024, were 43.6%, compared to 41.6% in the same period last year[45]. Cash Flow and Debt - Cash flow from operations was $37 million, with capital expenditures totaling $14.1 million[14]. - The company refinanced a $680 million senior unsecured note due 2025, extending the maturity to 2032[3]. - The updated full-year guidance includes an expected operating cash flow of approximately $240 million and capital expenditures of about $100 million[21]. - The company reported a net debt leverage ratio of 2.2x as of March 31, 2024[12]. - Interest expense increased to $20,523,000 for the three months ended March 31, 2024, compared to $16,685,000 in the prior year, marking a 23.0% increase[47]. - The company incurred a loss on debt extinguishment related to the repayment of its 5.625% Senior Notes due 2025, which included a write-off of $2,000,000 in unamortized deferred financing costs[43]. Inventory and Assets - Total current assets increased to $1,280,323 as of March 31, 2024, compared to $1,227,997 as of September 30, 2023[39]. - Inventory rose to $1,039,752 as of March 31, 2024, from $975,218 as of September 30, 2023[39]. - Total liabilities decreased slightly to $2,195,692 as of March 31, 2024, from $2,216,502 as of September 30, 2023[39]. Store Performance - As of March 31, 2024, the total number of consolidated stores decreased to 4,468 from 4,484 in 2023, a decline of 16 stores[49]. - The total number of SBS stores decreased to 3,134 in 2024 from 3,143 in 2023, a decline of 9 stores[49]. - The total number of company-operated BSG stores decreased to 1,202 in 2024 from 1,209 in 2023, a decline of 7 stores[49]. - The total number of franchise stores remained unchanged at 132 for both 2024 and 2023[49]. Comparable Sales - Comparable sales for SBS declined by 4.0% in Q1 2024, compared to a growth of 9.1% in Q1 2023, representing a change of 1,310 basis points[50]. - BSG's comparable sales grew by 2.0% in Q1 2024, an increase from 1.3% in Q1 2023, reflecting a change of 70 basis points[50]. - Consolidated comparable sales declined by 1.5% in Q1 2024, compared to a growth of 5.7% in Q1 2023, a change of 720 basis points[50]. - BSG's comparable sales for the six months ended March 31, 2024, increased by 1.3%, compared to a decline of 0.2% in the same period of 2023, reflecting a change of 150 basis points[50]. - The overall comparable sales for the six months ended March 31, 2024, declined by 1.1%, compared to a growth of 3.3% in the same period of 2023, a change of 440 basis points[50].

Financial Data and Key Metrics Changes - First-quarter consolidated net sales were $931 million, a decline of 2.7%, primarily due to the impact of store closures in December 2022 [11][57] - Adjusted gross margin was 50.2%, down 60 basis points year-over-year, while adjusted operating margin was 7.9% [3][66] - Adjusted diluted earnings per share was $0.39, with adjusted EBITDA margin at 11.5% [14][66] Business Line Data and Key Metrics Changes - In the Sally Beauty segment, comparable sales declined 2%, with net sales down 5% due to store closures and frugal consumer behavior [14][58] - The BSG segment saw a 1% increase in comparable sales, with net sales approximately flat despite having 20 fewer stores [15][66] - E-commerce sales for Sally were $35 million, representing 7% of segment net sales, while BSG e-commerce sales were $56 million, accounting for 14% of segment net sales [14][15] Market Data and Key Metrics Changes - The color category at Sally U.S. and Canada was down 7%, while care was down 5%, reflecting macro-driven pressure on consumer spending [22] - BSG's color category was up 4%, while care declined 1% on a total sales basis [22] Company Strategy and Development Direction - The company aims to enhance customer-centricity, grow high-margin owned brands, and increase operational efficiency, expecting product innovation and new services to contribute 200 to 300 basis points to top-line performance this year [4][10] - The "Fuel for Growth" initiative is expected to yield $20 million in pre-tax benefits in fiscal 2024, with a long-term goal of achieving low double-digit operating margins [9][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining full-year fiscal 2024 guidance, expecting net sales and comparable sales to be approximately flat, with growth driven by strategic initiatives [8][16] - The company noted that consumer spending is expected to remain pressured by macroeconomic headwinds, but they anticipate sequential improvement in comparable sales in the second half of the year [16][63] Other Important Information - The company reported solid operating cash flow of over $50 million, allowing for $20 million in share repurchases [3][16] - The company ended the quarter with $121 million in cash and no outstanding balance under its revolving credit line, with a net debt leverage ratio of 2.2 times [70] Q&A Session Summary Question: How much of the comp this quarter was driven by performance in owned brands versus national brands? - Management indicated that both owned and national brands contributed to the comp performance, with innovation being the largest driver [27] Question: Can you talk about traffic trends throughout the quarter? - Traffic was relatively stable, with a slight dip in October and a stronger December, particularly supported by the BSG side of the business [34] Question: What are the drivers behind improving salon demand trends at BSG? - The improvement was attributed to innovation, expanded distribution, and improving salon demand trends, with specific brands like Amika and Moroccannoil performing well [37] Question: How is the promotional environment affecting pricing? - The promotional landscape remains consistent, with a value-oriented consumer driving higher promotional activity, particularly in the BSG segment [98] Question: What are the expectations for inventory management relative to sales? - Inventory is expected to remain steady around the $1 billion range, with improved levels of unit inventory being maintained [100]

Financial Performance - Consolidated net sales for the three months ended December 31, 2023, decreased by $25.8 million, or 2.7%, to $931.3 million compared to the same period in 2022[60] - Consolidated comparable sales decreased by 0.8% for the three months ended December 31, 2023[60] - Consolidated gross profit for the three months ended December 31, 2023, decreased by $21.4 million, or 4.4%, to $467.2 million, with a gross margin decline of 80 basis points to 50.2%[60] - Consolidated operating earnings decreased by $17.5 million, or 20.2%, to $69.1 million for the three months ended December 31, 2023, with an operating margin decrease of 160 basis points to 7.4%[60] - Consolidated net earnings decreased by $11.9 million, or 23.7%, to $38.4 million for the three months ended December 31, 2023[60] Cash Flow and Liquidity - Cash provided by operations was $51.0 million for the three months ended December 31, 2023, compared to $55.0 million for the same period in 2022[60] - At December 31, 2023, the company had $603.6 million in liquidity, including $482.6 million available for borrowing under its ABL facility[74] Store Operations - The number of stores at the end of the period decreased by 23, or 0.5%, to 4,475 stores[61] - SBS's net sales decreased by $26.2 million, or 4.8%, primarily due to store closures and fewer transactions[61] - BSG's net sales increased slightly by $0.5 million, or 0.1%, driven by comparable sales growth and improved salon demand trends[61] Asset and Liability Management - As of December 31, 2023, total assets for the Issuers and Guarantors amounted to $2,055,835, a decrease from $2,076,413 as of September 30, 2023, reflecting a decline of approximately 1.0%[84] - Current liabilities decreased from $468,202 as of September 30, 2023, to $459,005 as of December 31, 2023, indicating improved financial management[84] - Total liabilities also saw a reduction from $2,011,075 to $1,982,179 during the same period, reflecting a decrease of approximately 1.4%[84] Shareholder Actions - During the three months ended December 31, 2023, the company repurchased 1.9 million shares of common stock for $20.0 million, marking a strategic move to enhance shareholder value[85] Financial Reporting and Risks - The company had no off-balance sheet financing arrangements other than outstanding letters of credit related to inventory purchases as of December 31, 2023[87] - There have been no material changes to critical accounting estimates or assumptions since September 30, 2023, ensuring consistency in financial reporting[88] - The company remains subject to market risks including foreign currency fluctuations and interest rates, with no material changes reported since September 30, 2023[90] - There have been no material changes to contractual obligations outside the ordinary course of business since September 30, 2023, indicating stable operational commitments[86]