Sally Beauty(SBH) - 2024 Q3 - Quarterly Results

Financial Performance - Q3 consolidated net sales were $942 million, an increase of 1.2% compared to the prior year[2]. - Consolidated comparable sales increased by 1.5%, with positive trends in both Sally Beauty and Beauty Systems Group segments[2][3]. - Global e-commerce sales reached $92 million, representing 9.7% of net sales[2][4]. - GAAP gross margin was 51.0%, unchanged from the prior year, while adjusted gross margin also remained at 51.0%[5]. - GAAP operating earnings were $72 million, with an operating margin of 7.6%, compared to $90.1 million and 9.7% in the prior year[7]. - GAAP diluted net earnings per share were $0.36, down from $0.46 in the prior year; adjusted diluted net earnings per share were $0.45, compared to $0.49[8]. - Net sales for the three months ended June 30, 2024, were $942,340, a 1.2% increase from $931,008 in the same period last year[24]. - Gross profit for the nine months ended June 30, 2024, was $1,411,131, down 1.4% from $1,431,618 in the prior year[24]. - Operating earnings decreased by 20.4% to $71,770 for the three months ended June 30, 2024, compared to $90,125 in the same period last year[24]. - Net earnings for the three months ended June 30, 2024, were $37,724, a decrease of 25.8% from $50,821 in the prior year[24]. - The company reported a consolidated operating margin of 7.6% for the three months ended June 30, 2024, down from 9.7% in the same period last year[25]. - For the nine months ended June 30, 2024, net earnings were $105,358,000, down from $142,019,000 in the same period of 2023[31]. - Adjusted EBITDA for the three months ended June 30, 2024, was $116,780,000, a decrease of 1.7% from $118,752,000 in the same period of 2023[32]. - Basic earnings per share for the three months ended June 30, 2024, were $0.37, down from $0.47 in the same period of 2023[28]. Cash Flow and Capital Expenditures - Cash flow from operations for Q3 was $48 million, with operating free cash flow of $29 million[2][9]. - The company executed $10 million in share repurchases during the quarter[1]. - Capital expenditures for the year are expected to be approximately $100 million[12]. - Net cash provided by operating activities decreased by 9.8% to $47,895 million in 2024 from $53,123 million in 2023[33]. - Operating free cash flow (non-GAAP) declined by 8.8% to $28,746 million in 2024 compared to $31,508 million in 2023[33]. Expenses and Liabilities - Selling, general and administrative (SG&A) expenses for the three months ended June 30, 2024, were $408,730,000, representing 43.4% of sales, compared to 41.3% in the same period of 2023[28]. - SG&A expenses for the nine months ended June 30, 2024, were $1,210,303,000, representing 43.5% of sales, compared to 41.5% in the same period of 2023[31]. - Unallocated expenses increased by 31.3% to $61,538 for the three months ended June 30, 2024, compared to $46,857 in the same period last year[27]. - Interest expense for the three months ended June 30, 2024, was $20,707,000, an increase from $18,654,000 in the same period of 2023[32]. - The provision for income taxes for the nine months ended June 30, 2024, was $36,565,000, compared to $52,840,000 in the same period of 2023[31]. Store Performance and Sales Trends - Total number of stores decreased to 4,460 in 2024 from 4,477 in June 2023, a reduction of 17 stores[34]. - Comparable sales growth for SBS was 0.7% for the three months ended June 30, 2024, down from 3.0% in the same period of 2023, a decline of 230 basis points[35]. - BSG comparable sales improved to 2.6% for the three months ended June 30, 2024, compared to a decline of 2.4% in the same period of 2023, an increase of 500 basis points[35]. - Consolidated comparable sales growth was 1.5% for the three months ended June 30, 2024, up from 0.6% in 2023, an increase of 90 basis points[35]. - The number of BSG distributor sales consultants increased to 659 in 2024 from 650 in 2023, an increase of 9 consultants[34]. Guidance and Future Outlook - Full year fiscal 2024 guidance maintains expectations for net sales and comparable sales to be approximately flat compared to the prior year[12]. - Adjusted EBITDA margin for 2024 is 12.4%, down from 12.8% in 2023, reflecting a decrease of 40 basis points[33].