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Sales, Earnings Rise at Sally Beauty in Q2

The business continues to ramp up its focus on the hair category.

Sally Beauty Holdings Inc. is honing its focus on the hair category.

The business, which is in the middle of a cost-reduction program, is intensifying its focus on hair color and hair care.

“Despite retail sector headwinds, we are the established leader in hair color and hair care for the professional and the consumer, and these categories have sustained healthy growth while other categories have faced increasing competition,” said Chris Brickman, chief executive officer. “We believe that these strategic investments will accelerate growth in color and care (which, combined, represent more than half of Sally’s revenue in the U.S. and Canada) and keep us on a path to long-term earnings growth.” The retailer just launched two new color lines, Wella ColorCharm Paints and Arctic Fox, nationwide.

The business is testing in-store programs focused on hair, including moving hair color to a more prominent location, lowering gondolas, shedding underperforming stockkeeping units and improving in store communications materials. Sally is also rolling out a new color certification training program for its associates during the fourth quarter, which is aimed at helping staff help customers through color processes. Box color will also roll out in all Sally stores towards the end of the fiscal year.

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Sally Beauty stores will also roll out new fixtures and “a pricing strategy similar to a value menu in a quick service restaurant,” according to Brickman. Baskets of items will be labeled, $1, $2, $3, etc., and all items in those baskets will be below those price points.

At BSG, the professional beauty retailer, the team is focused on new brands, like Mydentity, Babe Lash, ColorProof and Puff Me, which have driven sales since they were introduced. In the second quarter, BSG is launching a new professional Tigi hair care brand that will be exclusive, and a new color line from Schwarzkopf.

The business posted net sales of $975.3 million for the quarter, up 0.9 percent from the prior-year period. Net earnings were $61.4 million, up 7.7 percent from the prior-year period. Diluted earnings per share were 49 cents, up 22.5 percent year-over-year.