Sally Beauty Holdings missed its fiscal fourth quarter estimates when it reported earnings per share of 38 cents, while FactSet had an estimate of 39 cents a share. Net sales for the quarter were up 2.1 percent at $964.2 million and were inline with the estimate of $964 million.
The increase in revenue was due to growth in same-store sales and the addition of new stores. Foreign currency rates hurt the quarter by $27 million, or 2.9 percent.
“We finished the year with solid consolidated same-store sales growth of 3.5 percent in the fourth quarter,” stated Chris Brickman, president and chief executive officer. “In addition, we generated $301 million in operating cash flow in fiscal 2015 and repurchased approximately $228 million, or 8.1 million shares, of our common stock.”
Fourth quarter results for the Beauty Systems Group delivered sales that were up 5.2 percent to $381.9 million and up 4.2 percent for the year at $1.45 billion. Sally Beauty Supply fourth quarter sales were weaker, only up 0.2 percent to $582 million year over year. Fiscal 2015 results for Sally Beauty Supply were also light, only up 0.9 percent to $2.3 billion.
“In the back half of fiscal 2015, we implemented sales and profit improvement initiatives that we now expect will largely offset anticipated cost headwinds and allow for steady profit growth for SBH in fiscal 2016,” Brickman added. “In addition, we are excited about the pipeline of sales growth initiatives for the coming fiscal year, including the completion of owned-brand packaging upgrades, the reset of haircare and hair color categories, as well as the introduction of local TV and radio advertising. These new investments, combined with all of the projects and upgrades completed during fiscal 2015, will create significant points of difference and a modern image for Sally. As a result, we believe we are well on our way to reframing and repositioning the Sally brand to be more meaningful to the next generation of consumers.”
Consolidated same-store sales growth for fiscal 2016 is expected to be in the low 3 percent range. Sequential improvement is expected throughout the year with slower growth in Beauty Systems Group than the prior year as they anniversary a very strong year.
Sally Beauty stock has not had a very pretty year. It has declined 28 percent year-to-date to trade near $22.13 and dropped on Wednesday ahead of today’s earnings announcement. The company’s share buyback has not boosted the stock price.