Sally Beauty Holdings delivered solid earnings for the first quarter and the beauty company’s stock is up over 2 percent in pre-market trading to $28.75.
Sally Beauty reported net sales of $998 million, up 3.5 percent and beating the FactSet estimate of $990 million. Earnings per share came in at 43 cents, which topped the FactSet estimate of 36 cents by 18 percent. GAAP net earnings were $42.2 million and adjusted net earnings were $65.1 million.
“We are off to a solid start for fiscal year 2016,” stated Chris Brickman, president and chief executive officer. “We drove same-store sales improvement in our Sally business, and our BSG business continued to grow sales and gain channel share. In addition, implementation of our pricing and margin improvement initiatives resulted in gross profit margin expansion consistent with our previously stated guidance.”
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Consolidated gross profit for the fiscal 2016 first quarter was $494 million, an increase of 4.3 percent over last year’s gross profit of $473 million for the same period.
Sales growth was driven by same-store sales growth and net new store openings. First quarter same-store sales growth of 3.9 percent easily topped last year’s growth of 2.3 percent. Sally Beauty took selective price increases in certain parts of the country and fewer discounts in this quarter versus the last quarter.
The store count increased by 106 over the fiscal 2015 first quarter for a total store count of 3,711.
The company tempered expectations for the second quarter, even as Brickman kept the full-year guidance. In a statement he said, “We anticipate the business may confront modest headwinds in Q2 as we launch our hair care solutions center in almost 3,000 Sally U.S. stores, invest in a significant TV campaign to re-engage retail consumers at Sally and ramp up new business development programs globally.”
Separately, Sally Beauty repurchased 2.4 million shares at a cost of $62.4 million and has about $710 million remaining to do more share buybacks. Sally’s stock is down 17 percent for the past year, but in the last week it has turned the corner and jumped up 8 percent in a very difficult and volatile market.