Despite the current slowdown in the retail sector, Sally Beauty Holdings Inc. posted fourth-quarter comparable-store sales growth of 4.3 percent on revenues that increased 5.5 percent to $639.7 million from $606.1 million in the year-ago period.
Net earnings for the quarter ended Sept. 30 came in at $16.9 million, or 9 cents a diluted share, from $30.7 million a year ago, when Sally was still part of Alberto-Culver Co. Sally's quarterly profits beat Wall Street analysts' expectations of 6 cents a share, according to Yahoo Finance.
"Historically, we have not followed retail patterns very closely," Gary Winterhalter, Sally's president and chief executive officer, told analysts during a conference call Thursday morning. "In our experience, [comp-store sales] were good even in a quarter when general retail was starting a down trend."
He noted that Sally does experience seasonal business in the hair appliance category, when hair dryers and curling irons are given as gifts, and he added the category could be pressured "if overall retail gets very soft this season."
Fourth-quarter comp-store sales for Sally's Beauty Systems Group business, which includes 874 BSG stores, jumped 10.1 percent, helping to offset $30 million in revenues lost when Sally lost exclusive distribution rights to L'Oréal brands earlier in the fiscal year.
Due in part to the loss of the L'Oréal business, BSG sales declined by 7.2 percent to $229.1 million from $246.8 million a year ago. However, margins at BSG continue to improve following the loss of the L'Oréal business and are expected to return to 2006 levels of 9 percent, according to Sally.
In certain geographic regions, BSG began distributing brands including Goldwell, KMS, Paul Mitchell, Schwarzkopf, Wella, Sebastian, Graham Webb, Joico, Iso and Tigi. Additionally, a facilities restructuring plan has begun at BSG and the firm expects the strategy could yield $10 million in cost savings in the next fiscal year.
Comp-store sales for the firm's Sally Beauty Supply unit, which comprises 2,694 stores, rose by 2.4 percent during the fourth quarter. Sales at the chain were also up, by 14.3 percent, to $410.7 million, from $359.3 million in the prior year. Sally Beauty Supply revenues were helped by the company's acquisition earlier in the fiscal year of U.K. firm Salon Services, which added $34.6 million in quarterly sales.Winterhalter said he believes the U.S. market could support 3,000 Sally Beauty Supply stores and foresees expanding the business in Europe, South America, Canada and Mexico.
"I'm optimistic about the overall momentum in our business," he remarked.
Full-year profits at Sally Beauty Holdings were $44.5 million, or 24 cents a share, compared with $110.2 million a year ago. Annual sales reached $2.51 billion, a 5.9 percent increase from $2.37 billion last year.
@pantone announced their Color of the Year 2018: Ultra Violet. Nearly 20 months after the musician Prince’s death, fashion is having a purple moment. Varying shades of purple appeared on spring or fall runways, from @christopherkane to @calvinklein. @gucci’s Alessandro Michele bathed his fall runway in ultra violet-colored light at one point. Pantone 18-3838 is meant to “push the boundaries of what inspires us to look upward and outward to the future.” #wwdnews #wwdfashion (📷: @kukukuba)
@badgalriri’s @fentybeauty launch in September was a massive success on social media, powering $72.9 million of earned media value, according to Tribe Dynamics. The brand’s foundation offering sparked conversations about diversity in beauty, launching the growth of emerging influencers and propelling the brand’s support on social media. Today, #fentybeauty won Launch of the Year at the WWD #BeautyIncAwards. (📷: Chema Moya/EPE-EFE)
@marianna_hewitt has become one of the most influential content creators in the beauty space, with almost 800,000 Instagram followers and a newly launched skin care line called @SummerFridays. Today, she was awarded Influencer of the Year at the WWD #BeautyIncAwards. (📸: @sophiachabbott )
As shopping behaviors evolve, the retail experience must follow. Head over to retail experts @colliersinternational’s Knowledge Leader series to read more about the shift in our shopping era. #colliersretail #lovecolliers
@prada opened a pop-up club, called Prada Double Club, in collaboration with German artist Cartsen Höller at @artbasel Miami. Last night, guests – including @youngparis, @ritaora and even Miuccia Prada herself – gathered in a former ice factory where the pop-up is housed for a performance from @wyclefjean. Go to WWD.com for full coverage on all the exhibits, parties and more at #ArtBaselMiami. #wwdeye (📷: @lexieblacklock)
@louboutinworld and @disney are making magic once again, creating a set of shoe designs for the release of “Star Wars: The Last Jedi.” Louboutin designed a pair of shoes for each of the film’s four female leads: Rey (@daisyridrey), Vice Admiral Amilyn Holdo (@lauradern), Captain Phasma (Gwendoline Christie) and Rose Tico (@kellymarietran). The shoes will debut on Saturday at the L.A. premiere of the latest episode. #wwdfashion
Today at the #BeautyIncAwards 2017, WWD will be joined by beauty leaders from around the world as we honor this year's most innovative people, products, brands and places. Follow along here and on Twitter for live coverage from the exclusive event. #wwdsummits (📷: @elizaflorendo)
Exclusive: Beauty superinfluencer @marianna_hewitt is launching her first-ever skin care brand with her business partner @laurengores. Their new line Summer Fridays, which will be sold exclusively at summerfridays.com starting in January, is launching with just one product – a hydrating cream Jet Lag Mask. “We wanted to focus on one product that was amazing,” said Hewitt. Read the full interview on WWD.com. Link in bio. #wwdbeauty #wwdnews
Michelin star-rated chef PJ Calapa marks his first solo endeavor with today’s opening of @scampinyc –– the new Southern Italian restaurant located in Manhattans’ Flatiron District. The upscale yet welcoming environment matches the menu, which includes two types of scampi: traditional Italian langoustines in butter and the Americanized version with shrimp over pasta 🍤 - pictured here. #wwdeye (📷: George Chinsee)