Sally Beauty(SBH) - 2025 Q3 - Quarterly Results

Financial Performance - Consolidated net sales for Q3 2025 were $933 million, a decrease of 1.0% year-over-year[4] - GAAP diluted net earnings per share increased by 22% to $0.44 compared to the prior year[10] - Cash flow from operations was $69 million, with operating free cash flow totaling $49 million[12] - Consolidated comparable sales decreased by 0.4%, impacted by macroeconomic uncertainty[6] - Net earnings for the three months ended June 30, 2025, were $45,724, reflecting a 21.2% increase from $37,724 in 2024[38] - Basic earnings per share rose to $0.46 for the three months ended June 30, 2025, up 24.3% from $0.37 in 2024[38] - Operating earnings increased by 8.9% to $78,173 for the three months ended June 30, 2025, compared to $71,770 in 2024[38] - Adjusted EBITDA for the three months ended June 30, 2025, was $115,293, a slight decrease of 1.3% compared to $116,780 in the same period of 2024[50] Margins and Expenses - Adjusted operating margin expanded for the fourth consecutive quarter, reaching 9.2%[4] - Full year adjusted operating margin guidance raised to a range of 8.6% to 8.7%[22] - GAAP gross margin expanded by 50 basis points to 51.5%[7] - Consolidated gross margin for the three months ended June 30, 2025, was 51.5%, slightly up from 51.0% in the prior year[48] - SG&A expenses for the three months ended June 30, 2025, were $402,812, representing 43.2% of sales, down from 43.4% in the same period of 2024[48] - Interest expense decreased by 24.1% to $15,709 for the three months ended June 30, 2025, down from $20,707 in 2024[42] Sales Performance by Segment - Segment net sales for Sally Beauty Supply decreased by 1.8% to $526.8 million, while Beauty Systems Group saw a slight increase of 0.2% to $406.5 million[16] - SBS comparable sales declined by 1.1% for the three months ended June 30, 2025, compared to a growth of 0.7% in the same period of 2024, a change of 180 basis points[53] - BSG comparable sales growth decreased to 0.5% for the three months ended June 30, 2025, down from 2.6% in 2024, a decline of 210 basis points[53] - For the nine months ended June 30, 2025, SBS comparable sales showed a slight growth of 0.1%, recovering from a decline of 1.7% in the same period of 2024, a change of 180 basis points[53] Assets and Liabilities - The total current assets decreased to $1,261,644 as of June 30, 2025, from $1,305,314 as of September 30, 2024[40] - Total liabilities decreased to $1,981,191 as of June 30, 2025, compared to $2,164,364 as of September 30, 2024[40] Operational Changes - The company repaid $21 million in term loan debt and repurchased $13 million in shares during the quarter[12] - The total number of consolidated stores decreased to 4,425 from 4,460, a decline of 35 stores[52] - The number of BSG distributor sales consultants fell to 611 in June 30, 2025, down from 659, a decrease of 48 consultants[52] - The total number of BSG company-operated stores remained relatively stable, with a slight decrease from 1,200 in 2024 to 1,198 in 2025, a change of 2 stores[52] - Franchise stores in BSG decreased from 132 in 2024 to 131 in 2025, a decline of 1 store[52] - The number of BSG distributor sales consultants employed by franchisees was 191 as of June 30, 2025[52] Tax and Other Provisions - The provision for income taxes for the three months ended June 30, 2025, was $16,740, an increase of 25.5% from $13,339 in the same period of 2024[50]