Sally Beauty(US:SBH)2025-02-13 11:45Financial Performance - Q1 consolidated net sales increased by 0.7% to $938 million, with a 1.6% increase in consolidated comparable sales[5] - GAAP operating margin expanded by 330 basis points to 10.7%, while adjusted operating margin increased by 50 basis points to 8.4%[5] - GAAP net earnings were $61 million, or $0.58 per diluted share, compared to $38.4 million, or $0.35 per diluted share, in the prior year[13] - Net sales for the three months ended December 31, 2024, were $937,895 thousand, a 0.7% increase from $931,302 thousand in the same period of 2023[38] - Gross profit increased to $476,840 thousand, reflecting a 2.1% growth compared to $467,176 thousand in the prior year[38] - Operating earnings rose significantly by 45.1% to $100,320 thousand, up from $69,123 thousand year-over-year[38] - Net earnings for the quarter were $61,013 thousand, representing a substantial increase of 58.9% from $38,390 thousand in the previous year[38] - Basic earnings per share increased by 66.7% to $0.60, compared to $0.36 in the same quarter of 2023[38] - The consolidated operating margin improved to 10.7%, up from 7.4% in the prior year, marking a 330 basis point increase[38] - Adjusted EBITDA for Q1 was $110.2 million, an increase of 2.9% compared to the prior year, with an adjusted EBITDA margin of 11.7%[13] - Adjusted EBITDA (non-GAAP) rose by 2.9% to $110,167, with an adjusted EBITDA margin of 11.7%, up from 11.5% in the previous year[48] Cash Flow and Debt Management - Cash flow from operations was $33 million, with operating free cash flow totaling $57 million[5] - The company repaid $41 million of Term Loan B debt and completed $10 million in share repurchases during the quarter[5] - Operating free cash flow (non-GAAP) surged by 178.3% to $56,955, despite a 34.4% decline in net cash provided by operating activities[48] Store Operations and E-commerce - The company operated 22 fewer stores at the end of the quarter compared to the prior year[8] - Global e-commerce sales reached $99 million, representing 10.6% of net sales[5] - The total number of stores decreased to 4,453 in 2024 from 4,475 in 2023, reflecting a net reduction of 22 stores[50] - The company operated 3,123 SBS stores, down from 3,143 in the previous year, indicating a reduction of 20 stores[50] Segment Performance - Segment operating earnings for Sally Beauty Supply (SBS) were $79,874 thousand, a 2.9% increase from $77,629 thousand, while Beauty Systems Group (BSG) saw a 13.1% increase to $50,469 thousand[42] - Comparable sales growth for SBS was 1.7%, a significant improvement from a decline of 1.9% in 2023, while BSG saw a growth of 1.4% compared to 0.7% in the prior year[51] Tax and Liabilities - The effective tax rate for the quarter was 26.4%, slightly up from 25.9% in the previous year[38] - Total current assets decreased to $1,246,720 thousand from $1,305,314 thousand, indicating a reduction in liquidity[40] - Total liabilities decreased to $2,054,279 thousand from $2,164,364 thousand, reflecting improved financial health[40] - The company reported a 62.9% increase in provision for income taxes, amounting to $21,865 compared to $13,419 in 2023[48] Partnerships and Future Outlook - The Beauty Systems Group announced a distribution partnership with K18, launching on April 1st in the U.S. and Canada[6][7] - For fiscal year 2025, the company expects consolidated net sales to be approximately 100 basis points lower than comparable sales due to unfavorable foreign exchange rates[25]