Sally Beauty Holdings Inc. posted gains in the second quarter with a net sales increase of 4.5 percent and same-store sales gain of 4 percent.
Sally Beauty had a consolidated gross profit of $487.5 million for the quarter, up 4.3 percent from $467.5 million in the prior-year period. Net sales for the quarter were $980.1 million. The company’s net earnings were down 2.2 percent year-over-year to $60.2 million, or 41 cents a diluted share, from $61.5 million, or 39 cents a diluted share.
The Sally Beauty Supply segment had sales of $587.6 million, up 2.7 percent from $572 million year-over year. Gains were driven by same-store sales growth and new store openings and partially offset by foreign currency exchange rates. Profit was up because of price increases in certain regions, the company said. The Beauty Systems Group, which consists of stores branded as CosmoProf and Armstrong McCall, saw sales growth of 7.3 percent to $392.4 million from $365.6 million year-over-year. Combined, the two segments had 5,044 stores at the end of the quarter.
“Our team is opening new stores as quickly as they can in Colombia, Peru and Chile, while at the same time laying the groundwork to enter Brazil in the future,” Brickman said.
For the six months ended March 31, Sally Beauty had $1.98 billion in net sales, up four percent from $1.9 billion year-over-year.
The company also debuted a revamped hair care section after switching the focus to a solution-based offering, chief executive officer Chris Brickman said on the company’s earnings call. Sally Beauty is targeting to refresh an additional 500 stores by the end of fiscal 2016, bringing to total number to 1,500. Going forward, the company will continue to switch up its merchandising. “We have the best selection of brushes and combs in the industry,” Brickman said. “It hasn’t always been merchandised that well … we’re going to upgrade that dramatically.”
“Looking ahead to the third quarter, we will continue to bring more innovation to our business … introducing a color education center into [approximately] 1,600 stores, launching the [Bitzy] cosmetic brand at our cash wrap, and releasing a mobile application for stylists through our Beauty Systems Group business to help enable stylists to run their business via their smartphone,” Brickman said in a statement.