Sally Beauty(US:SBH)2024-05-09 10:45Financial 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].