Profits at Sally Beauty Holdings Inc. jumped 25.6 percent on sales that rose 0.6 percent during the fourth fiscal quarter ended Sept. 30.
This story first appeared in the November 20, 2009 issue of WWD. Subscribe Today.
Net income was $27 million, or 15 cents a diluted share, compared with $21.5 million, or 12 cents a share, in the same period a year ago on net sales that came in at $676.2 million versus $672.2 million.
Adjusted net earnings increased by 22.8 percent to $24.8 million, yielding earnings per share of 14 cents a share, which missed Wall Street analysts’ expectations by 1 cent, according to Yahoo Finance. The adjustment stemmed from aftertax, noncash interest income of $2.2 million from mark-to-market changes in the fair value of the company’s interest rate swaps, the firm stated.
“Sally Beauty Holdings delivered very good fourth-quarter and full-year results despite a difficult recessionary environment,” stated Gary Winterhalter, the company’s president and chief executive officer. “We believe we are well positioned as we head into fiscal 2010 and remain confident we will continue to execute against our strategy.
“Our business remained stable during the worst of the economic crisis,” he told analysts during a conference call Thursday morning. “We had a strong year and executed on all our strategic objectives.”
Total store count for the firm at the end of fiscal 2009 was 3,914 units, an increase of 141 locations from fiscal 2008.
Sales of the firm’s Sally Beauty Supply business during the quarter were up 2 percent to $438 million, from $429.3 million, while sales of its Beauty Systems Group unit were down 2 percent to $238.1 million, from $242.9 million.
During the fiscal 2009 fourth quarter, BSG made two acquisitions to support its strategy of extending distribution reach in important geographic regions, the firm stated. BSG acquired Belleza Concept International Inc., a Puerto Rico-based distributor of beauty products, on Sept. 18. Belleza Concept has three stores and eight sales consultants operating in the Caribbean, the company noted, adding that BSG also acquired Schoeneman Beauty Supply, based in Pottsville, Pa., on Sept. 30. Schoeneman is a leading distributor of professional beauty supplies operating a network of 43 stores and approximately 100 direct sales consultants covering a seven-state region in the Northeast, according to Sally.
“We will continue to look for strategic…acquisitions, both domestically and internationally,” Winterhalter said on the call.
Consolidated same-store sales for the fourth quarter were up 2.4 percent, compared with 2.2 percent in the same period last year. Total same-store sales for the fiscal year were down to 1.8 percent from 2.6 percent in 2008.
Net earnings for the full fiscal year were up 27.8 percent to $99.1 million, or 54 cents a diluted share, from $77.6 million, or 42 cents, in the prior year. Sales for the 12 months were down 0.4 percent to $2.64 billion from $2.65 billion.
Said Winterhalter: “We had a great year ending with solid financial results, positioning us well as we [enter] fiscal 2010.”