Sally Beauty Holdings Reports Third Quarter Fiscal 2024 Results
- Q3 Consolidated Comparable Sales Increased 1.5%
-
Generated Q3 Cash Flow from Operations of
$48 Million -
Executed
$10 Million in Share Repurchases - Maintains Full Year Fiscal 2024 Guidance
Fiscal 2024 Third Quarter Summary
-
Consolidated net sales of
$942 million , an increase of 1.2% compared to the prior year; - Consolidated comparable sales increase of 1.5%;
-
Beauty Systems Group reported third consecutive quarter with positive comparable sales andSally Beauty returned to positive comparable sales; -
Global e-commerce sales of
$92 million , representing 9.7% of net sales; - GAAP gross margin was 51.0%;
-
GAAP operating earnings of
$72 million and GAAP operating margin of 7.6%; Adjusted Operating Earnings of$84 million and Adjusted Operating Margin of 8.9%; -
GAAP diluted net earnings per share of
$0.36 and Adjusted Diluted Net Earnings Per Share of$0.45 ; and -
Cash flow from operations of
$48 million and Operating Free Cash Flow of$29 million .
“We are pleased to report solid third quarter results, including positive comparable sales in both our
Paulonis added, “We continued to return capital to shareholders through our share repurchase program in the quarter, made progress on our fuel for growth initiative and remain focused on driving long-term profitable growth and shareholder value.”
Fiscal 2024 Third Quarter Operating Results
Third quarter consolidated net sales were
Consolidated comparable sales increased 1.5%, primarily reflecting continued momentum at
Consolidated gross profit for the third quarter was
Selling, general and administrative (SG&A) expenses totaled
GAAP operating earnings and operating margin in the third quarter were
GAAP net earnings in the third quarter were
Balance Sheet and Cash Flow
As of
Third quarter cash flow from operations was
On
Fiscal 2024 Third Quarter Segment Results
-
Segment net sales were
$536.5 million in the quarter, an increase of 0.3% compared to the prior year. The segment had an unfavorable impact of 10 basis points from foreign currency translation on reported sales. At constant currency, segment e-commerce sales were$37 million or 7.0% of segment net sales for the quarter. - Segment comparable sales increased 0.7% in the third quarter, as the impact of strategic initiatives drove improved traffic and conversion.
- At the end of the quarter, segment store count was 3,128 compared to 3,141 in the prior year.
- GAAP gross margin increased by 100 basis points to 59.8% compared to the prior year. The increase was driven primarily by lower distribution and freight costs from supply chain efficiencies and higher product margin, partially offset by an unfavorable fixed cost absorption.
-
GAAP operating earnings were
$86.9 million compared to$88.7 million in the prior year. GAAP operating margin decreased to 16.2% compared to 16.6% in the prior year.
-
Segment net sales were
$405.8 million in the quarter, an increase of 2.5% compared to the prior year. The segment had an unfavorable impact of 20 basis points from foreign currency translation on reported sales. At constant currency, segment e-commerce sales were$54 million or 13.4% of segment net sales for the quarter. - Segment comparable sales increased 2.6% in the third quarter, primarily reflecting continued momentum from expanded distribution and product innovation.
- At the end of the quarter, net store count was 1,332 compared to 1,336 in the prior year.
- GAAP gross margin decreased 110 basis points to 39.4% in the quarter compared to the prior year. The decrease was driven primarily by an unfavorable fixed cost absorption and lower product margin due to a higher take rate on promotions and brand mix, partially offset by lower distribution and freight costs from supply chain efficiencies.
-
GAAP operating earnings were
$46.8 million in the quarter compared to$48.7 million in the prior year. GAAP operating margin in the quarter was 11.5% compared to 12.3% in the prior year. - At the end of the quarter, there were 659 distributor sales consultants compared to 650 in the prior year.
Fiscal Year 2024 Guidance
The Company is maintaining its full year guidance as follows:
- The Company expects net sales and comparable sales to be approximately flat compared to the prior year;
- Gross Margin is expected to be in the range of 50.5% to 51.0%;
- Adjusted Operating Margin is expected to be approximately 8.5%;
-
Operating Cash Flow is expected to be approximately
$240 million ; and -
Capital expenditures are expected to be approximately
$100 million .
* |
The Company does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of the Company’s control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. |
Conference Call and Where You Can Find Additional Information
The Company will hold a conference call and audio webcast today to discuss its financial results and its business at approximately
About
Cautionary Notice Regarding Forward-Looking Statements
Statements in this news release and the schedules hereto which are not purely historical facts or which depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “can,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “will,” “would,” “anticipates,” “potential,” “confident,” “optimistic,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current matters.
Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including, those described in our filings with the
Use of Non-GAAP Financial Measures
This news release and the schedules hereto include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in
Adjusted Gross Margin – We define the measure Adjusted Gross Margin as GAAP gross margin excluding the true-up of the inventory write-down related to the Company’s distribution center consolidation and store optimization plan for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted Selling, General and Administrative Expenses – We define the measure Adjusted Selling, General and Administrative Expenses as GAAP selling, general and administrative expenses excluding costs related to the Company’s fuel for growth initiative and other expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted EBITDA and EBITDA Margin – We define the measure Adjusted EBITDA as GAAP net earnings before depreciation and amortization, interest expense, income taxes, share-based compensation, costs related to the Company’s restructuring plans, costs related to the Company’s fuel for growth initiative and other expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of net sales.
Adjusted Operating Earnings and Operating Margin – Adjusted operating earnings are GAAP operating earnings that exclude costs related to the Company’s restructuring plans, costs related to the Company’s fuel for growth initiative and other expenses for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures. Adjusted Operating Margin is Adjusted Operating Earnings as a percentage of net sales.
Adjusted Net Earnings – Adjusted net earnings is GAAP net earnings that exclude tax-effected costs related to the Company’s restructuring plans, tax-effected expenses related to the Company’s fuel for growth initiative and other costs, and tax-effected expenses related to loss on debt extinguishment for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Adjusted Diluted Net Earnings Per Share – Adjusted diluted net earnings per share is GAAP diluted earnings per share that exclude tax-effected costs related to the Company’s restructuring plans, tax-effected expenses related to the Company’s fuel for growth initiative and other costs, and tax-effected expenses related to loss on debt extinguishment for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.
Operating Free Cash Flow – We define the measure Operating Free Cash Flow as GAAP net cash provided by operating activities less payments for capital expenditures (net). We believe Operating Free Cash Flow is an important liquidity measure that provides useful information to investors about the amount of cash generated from operations after taking into account payments for capital expenditures (net).
We believe that these non-GAAP financial measures provide valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses; providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry.
We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and Board of Directors also use these non-GAAP measures as supplemental measures to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe that these non-GAAP measures also provide meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. These non-GAAP measures should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies.
Supplemental Schedules |
|
|
|
Segment Information |
1 |
Non-GAAP Financial Measures Reconciliations |
2-3 |
Non-GAAP Financial Measures Reconciliations; Adjusted EBITDA and |
|
Operating Free Cash Flow |
4 |
Store Count and Comparable Sales |
5 |
|
||||||||||||||||||||
Condensed Consolidated Statements of Earnings | ||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
|
2024 |
|
|
2023 |
|
Percentage Change |
|
2024 |
|
|
2023 |
|
Percentage Change | |||||||
Net sales |
$ |
942,340 |
|
$ |
931,008 |
|
1.2 |
% |
$ |
2,782,003 |
|
$ |
2,806,775 |
|
(0.9 |
)% |
||||
Cost of products sold |
|
461,457 |
|
|
456,303 |
|
1.1 |
% |
|
1,370,872 |
|
|
1,375,157 |
|
(0.3 |
)% |
||||
Gross profit |
|
480,883 |
|
|
474,705 |
|
1.3 |
% |
|
1,411,131 |
|
|
1,431,618 |
|
(1.4 |
)% |
||||
Selling, general and administrative expenses |
|
408,730 |
|
|
384,183 |
|
6.4 |
% |
|
1,210,303 |
|
|
1,165,420 |
|
3.9 |
% |
||||
Restructuring |
|
383 |
|
|
397 |
|
(3.5 |
)% |
|
361 |
|
|
18,077 |
|
(98.0 |
)% |
||||
Operating earnings |
|
71,770 |
|
|
90,125 |
|
(20.4 |
)% |
|
200,467 |
|
|
248,121 |
|
(19.2 |
)% |
||||
Interest expense |
|
20,707 |
|
|
18,654 |
|
11.0 |
% |
|
58,544 |
|
|
53,262 |
|
9.9 |
% |
||||
Earnings before provision for income taxes |
|
51,063 |
|
|
71,471 |
|
(28.6 |
)% |
|
141,923 |
|
|
194,859 |
|
(27.2 |
)% |
||||
Provision for income taxes |
|
13,339 |
|
|
20,650 |
|
(35.4 |
)% |
|
36,565 |
|
|
52,840 |
|
(30.8 |
)% |
||||
Net earnings |
$ |
37,724 |
|
$ |
50,821 |
|
(25.8 |
)% |
$ |
105,358 |
|
$ |
142,019 |
|
(25.8 |
)% |
||||
Earnings per share: | ||||||||||||||||||||
Basic |
$ |
0.37 |
|
$ |
0.47 |
|
(21.3 |
)% |
$ |
1.01 |
|
$ |
1.32 |
|
(23.5 |
)% |
||||
Diluted |
$ |
0.36 |
|
$ |
0.46 |
|
(21.7 |
)% |
$ |
0.98 |
|
$ |
1.30 |
|
(24.6 |
)% |
||||
Weighted average shares: | ||||||||||||||||||||
Basic |
|
103,190 |
|
|
107,560 |
|
|
104,477 |
|
|
107,383 |
|
||||||||
Diluted |
|
105,897 |
|
|
109,668 |
|
|
107,186 |
|
|
109,519 |
|
||||||||
Change |
Change |
|||||||||||||||||||
Comparison as a percentage of net sales | ||||||||||||||||||||
Consolidated gross margin |
|
51.0 |
% |
|
51.0 |
% |
— |
|
|
50.7 |
% |
|
51.0 |
% |
(30 |
) |
||||
Selling, general and administrative expenses |
|
43.4 |
% |
|
41.3 |
% |
210 |
|
|
43.5 |
% |
|
41.5 |
% |
200 |
|
||||
Consolidated operating margin |
|
7.6 |
% |
|
9.7 |
% |
(210 |
) |
|
7.2 |
% |
|
8.8 |
% |
(160 |
) |
||||
Effective tax rate |
|
26.1 |
% |
|
28.9 |
% |
(280 |
) |
|
25.8 |
% |
|
27.1 |
% |
(130 |
) |
|
|||||
Condensed Consolidated Balance Sheets | |||||
(In thousands) | |||||
(Unaudited) | |||||
2024 |
2023 |
||||
Cash and cash equivalents |
$ |
97,375 |
$ |
123,001 |
|
Trade and other accounts receivable |
|
91,413 |
|
75,875 |
|
Inventory |
|
1,022,380 |
|
975,218 |
|
Other current assets |
|
51,396 |
|
53,903 |
|
Total current assets |
|
1,262,564 |
|
1,227,997 |
|
Property and equipment, net |
|
267,829 |
|
297,779 |
|
Operating lease assets |
|
560,602 |
|
570,657 |
|
|
|
587,226 |
|
588,252 |
|
Other assets |
|
42,976 |
|
40,565 |
|
Total assets |
$ |
2,721,197 |
$ |
2,725,250 |
|
Current maturities of long-term debt |
$ |
49,163 |
$ |
4,173 |
|
Accounts payable |
|
234,552 |
|
258,884 |
|
Accrued liabilities |
|
161,191 |
|
163,366 |
|
Current operating lease liabilities |
|
136,524 |
|
150,479 |
|
Income taxes payable |
|
13,495 |
|
2,355 |
|
Total current liabilities |
|
594,925 |
|
579,257 |
|
Long-term debt, including capital leases |
|
978,865 |
|
1,065,811 |
|
Long-term operating lease liabilities |
|
457,169 |
|
455,071 |
|
Other liabilities |
|
21,375 |
|
23,139 |
|
Deferred income tax liabilities, net |
|
91,193 |
|
93,224 |
|
Total liabilities |
|
2,143,527 |
|
2,216,502 |
|
Total stockholders’ equity |
|
577,670 |
|
508,748 |
|
Total liabilities and stockholders’ equity |
$ |
2,721,197 |
$ |
2,725,250 |
Supplemental Schedule 1 |
|||||||||||||||||||
|
|||||||||||||||||||
Segment Information | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
|
2024 |
|
|
2023 |
|
Percentage Change |
|
2024 |
|
|
2023 |
|
Percentage Change | ||||||
Net sales: | |||||||||||||||||||
|
$ |
536,536 |
|
$ |
534,932 |
|
0.3 |
% |
$ |
1,573,015 |
|
$ |
1,614,650 |
|
(2.6 |
)% |
|||
|
|
405,804 |
|
|
396,076 |
|
2.5 |
% |
|
1,208,988 |
|
|
1,192,125 |
|
1.4 |
% |
|||
Total net sales |
$ |
942,340 |
|
$ |
931,008 |
|
1.2 |
% |
$ |
2,782,003 |
|
$ |
2,806,775 |
|
(0.9 |
)% |
|||
Operating earnings: | |||||||||||||||||||
SBS |
$ |
86,938 |
|
$ |
88,683 |
|
(2.0 |
)% |
$ |
241,387 |
|
$ |
279,991 |
|
(13.8 |
)% |
|||
BSG |
|
46,753 |
|
|
48,696 |
|
(4.0 |
)% |
|
134,395 |
|
|
135,603 |
|
(0.9 |
)% |
|||
Segment operating earnings |
|
133,691 |
|
|
137,379 |
|
(2.7 |
)% |
|
375,782 |
|
|
415,594 |
|
(9.6 |
)% |
|||
Unallocated expenses (1) |
|
61,538 |
|
|
46,857 |
|
31.3 |
% |
|
174,954 |
|
|
149,396 |
|
17.1 |
% |
|||
Restructuring |
|
383 |
|
|
397 |
|
(3.5 |
)% |
|
361 |
|
|
18,077 |
|
(98.0 |
)% |
|||
Interest expense |
|
20,707 |
|
|
18,654 |
|
11.0 |
% |
|
58,544 |
|
|
53,262 |
|
9.9 |
% |
|||
Earnings before provision for income taxes |
$ |
51,063 |
|
$ |
71,471 |
|
(28.6 |
)% |
$ |
141,923 |
|
$ |
194,859 |
|
(27.2 |
)% |
|||
Segment gross margin: |
|
2024 |
|
|
|
2023 |
|
Basis Point Change |
|
|
2024 |
|
|
|
2023 |
|
Basis Point Change |
||
SBS |
|
59.8 |
% |
|
58.8 |
% |
100 |
|
|
59.5 |
% |
|
59.2 |
% |
30 |
|
|||
BSG |
|
39.4 |
% |
|
40.5 |
% |
(110 |
) |
|
39.4 |
% |
|
40.0 |
% |
(60 |
) |
|||
Segment operating margin: | |||||||||||||||||||
SBS |
|
16.2 |
% |
|
16.6 |
% |
(40 |
) |
|
15.3 |
% |
|
17.3 |
% |
(200 |
) |
|||
BSG |
|
11.5 |
% |
|
12.3 |
% |
(80 |
) |
|
11.1 |
% |
|
11.4 |
% |
(30 |
) |
|||
Consolidated operating margin |
|
7.6 |
% |
|
9.7 |
% |
(210 |
) |
|
7.2 |
% |
|
8.8 |
% |
(160 |
) |
|||
(1) Unallocated expenses, including share-based compensation expense, consist of corporate and shared costs and are included in selling, general and administrative expenses. Additionally, unallocated expenses include costs associated with our Fuel for Growth initiative.
|
Supplemental Schedule 2 |
|||||||||||||||||||
|
|||||||||||||||||||
Non-GAAP Financial Measures Reconciliations | |||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended |
|||||||||||||||||||
As Reported (GAAP) |
Restructuring (1) | Fuel for Growth and Other (2) |
Loss on Debt Extinguishment (3) |
As Adjusted (Non-GAAP) |
|||||||||||||||
Cost of products sold |
$ |
461,457 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
461,457 |
|
||||
Consolidated gross margin |
|
51.0 |
% |
|
51.0 |
% |
|||||||||||||
Selling, general and administrative expenses |
|
408,730 |
|
|
— |
|
|
(11,933 |
) |
|
— |
|
|
396,797 |
|
||||
SG&A expenses, as a percentage of sales |
|
43.4 |
% |
|
42.1 |
% |
|||||||||||||
Operating earnings |
|
71,770 |
|
|
383 |
|
|
11,933 |
|
|
— |
|
|
84,086 |
|
||||
Operating margin |
|
7.6 |
% |
|
8.9 |
% |
|||||||||||||
Interest expense |
|
20,707 |
|
|
— |
|
|
— |
|
|
(1,697 |
) |
|
19,010 |
|
||||
Earnings before provision for income taxes |
|
51,063 |
|
|
383 |
|
|
11,933 |
|
|
1,697 |
|
|
65,076 |
|
||||
Provision for income taxes (4) |
|
13,339 |
|
|
99 |
|
|
3,066 |
|
|
436 |
|
|
16,940 |
|
||||
Net earnings |
$ |
37,724 |
|
$ |
284 |
|
$ |
8,867 |
|
$ |
1,261 |
|
$ |
48,136 |
|
||||
Earnings per share: | |||||||||||||||||||
Basic |
$ |
0.37 |
|
$ |
0.00 |
|
$ |
0.09 |
|
$ |
0.01 |
|
$ |
0.47 |
|
||||
Diluted |
$ |
0.36 |
|
$ |
0.00 |
|
$ |
0.08 |
|
$ |
0.01 |
|
$ |
0.45 |
|
||||
Three Months Ended |
|||||||||||||||||||
As Reported (GAAP) |
Restructuring (1) | Other (2) | As Adjusted (Non-GAAP) |
||||||||||||||||
Cost of products sold |
$ |
456,303 |
|
$ |
746 |
|
$ |
— |
|
$ |
457,049 |
|
|||||||
Consolidated gross margin |
|
51.0 |
% |
|
50.9 |
% |
|||||||||||||
Selling, general and administrative expenses |
|
384,183 |
|
|
— |
|
|
— |
|
|
384,183 |
|
|||||||
SG&A expenses, as a percentage of sales |
|
41.3 |
% |
|
41.3 |
% |
|||||||||||||
Operating earnings |
|
90,125 |
|
|
(349 |
) |
|
— |
|
|
89,776 |
|
|||||||
Operating margin |
|
9.7 |
% |
|
9.6 |
% |
|||||||||||||
Interest expense |
|
18,654 |
|
|
— |
|
|
— |
|
|
18,654 |
|
|||||||
Earnings before provision for income taxes |
|
71,471 |
|
|
(349 |
) |
|
— |
|
|
71,122 |
|
|||||||
Provision for income taxes (4) |
|
20,650 |
|
|
(89 |
) |
|
(2,700 |
) |
|
17,861 |
|
|||||||
Net earnings |
$ |
50,821 |
|
$ |
(260 |
) |
$ |
2,700 |
|
$ |
53,261 |
|
|||||||
Earnings per share: | |||||||||||||||||||
Basic |
$ |
0.47 |
|
$ |
(0.00 |
) |
$ |
0.03 |
|
$ |
0.50 |
|
|||||||
Diluted |
$ |
0.46 |
|
$ |
(0.00 |
) |
$ |
0.02 |
|
$ |
0.49 |
|
|||||||
(1) For the three months ended |
|||||||||||||||||||
(2) For the three months ended |
|||||||||||||||||||
(3) Loss on debt extinguishment relates to the repricing of our Term Loan B due 2030, which included a the write-off of unamortized deferred financing costs of |
|||||||||||||||||||
(4) The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized. |
Supplemental Schedule 3 |
||||||||||||||||||
|
||||||||||||||||||
Non-GAAP Financial Measures Reconciliations, Continued | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Nine Months Ended |
||||||||||||||||||
As Reported (GAAP) |
Restructuring (1) | Fuel for Growth and Other (2) |
Loss on Debt Extinguishment (3) |
As Adjusted (Non-GAAP) |
||||||||||||||
Cost of products sold |
$ |
1,370,872 |
|
$ |
— |
$ |
— |
|
$ |
— |
|
$ |
1,370,872 |
|
||||
Consolidated gross margin |
|
50.7 |
% |
|
50.7 |
% |
||||||||||||
Selling, general and administrative expenses |
|
1,210,303 |
|
|
— |
|
(25,760 |
) |
|
— |
|
|
1,184,543 |
|
||||
SG&A expenses, as a percentage of sales |
|
43.5 |
% |
|
42.6 |
% |
||||||||||||
Operating earnings |
|
200,467 |
|
|
361 |
|
25,760 |
|
|
— |
|
|
226,588 |
|
||||
Operating margin |
|
7.2 |
% |
|
8.1 |
% |
||||||||||||
Interest expense |
|
58,544 |
|
|
— |
|
— |
|
|
(4,261 |
) |
|
54,283 |
|
||||
Earnings before provision for income taxes |
|
141,923 |
|
|
361 |
|
25,760 |
|
|
4,261 |
|
|
172,305 |
|
||||
Provision for income taxes (5) |
|
36,565 |
|
|
93 |
|
6,618 |
|
|
1,095 |
|
|
44,371 |
|
||||
Net earnings |
$ |
105,358 |
|
$ |
268 |
$ |
19,142 |
|
$ |
3,166 |
|
$ |
127,934 |
|
||||
Earnings per share: | ||||||||||||||||||
Basic |
$ |
1.01 |
|
$ |
0.00 |
$ |
0.18 |
|
$ |
0.03 |
|
$ |
1.22 |
|
||||
Diluted |
$ |
0.98 |
|
$ |
0.00 |
$ |
0.18 |
|
$ |
0.03 |
|
$ |
1.19 |
|
||||
Nine Months Ended |
||||||||||||||||||
As Reported (GAAP) |
Restructuring (1) | COVID-19 (4) | Other (2) | As Adjusted (Non-GAAP) |
||||||||||||||
Cost of products sold |
$ |
1,375,157 |
|
$ |
5,789 |
$ |
— |
|
$ |
— |
|
$ |
1,380,946 |
|
||||
Consolidated gross margin |
|
51.0 |
% |
|
50.8 |
% |
||||||||||||
Selling, general and administrative expenses |
|
1,165,420 |
|
|
— |
|
(1,052 |
) |
|
— |
|
|
1,164,368 |
|
||||
SG&A expenses, as a percentage of sales |
|
41.5 |
% |
|
41.5 |
% |
||||||||||||
Operating earnings |
|
248,121 |
|
|
12,288 |
|
1,052 |
|
|
— |
|
|
261,461 |
|
||||
Operating margin |
|
8.8 |
% |
|
9.3 |
% |
||||||||||||
Interest expense |
|
53,262 |
|
|
— |
|
— |
|
|
— |
|
|
53,262 |
|
||||
Earnings before provision for income taxes |
|
194,859 |
|
|
12,288 |
|
1,052 |
|
|
— |
|
|
208,199 |
|
||||
Provision for income taxes (5) |
|
52,840 |
|
|
3,109 |
|
270 |
|
|
(2,700 |
) |
|
53,519 |
|
||||
Net earnings |
$ |
142,019 |
|
$ |
9,179 |
$ |
782 |
|
$ |
2,700 |
|
$ |
154,680 |
|
||||
Earnings per share: | ||||||||||||||||||
Basic |
$ |
1.32 |
|
$ |
0.09 |
$ |
0.01 |
|
$ |
0.03 |
|
$ |
1.44 |
|
||||
Diluted |
$ |
1.30 |
|
$ |
0.08 |
$ |
0.01 |
|
$ |
0.02 |
|
$ |
1.41 |
|
||||
(1) For the nine months ended |
||||||||||||||||||
(2) For the nine months ended |
||||||||||||||||||
(3) Loss on debt extinguishment relates to the repayment of our 5.625% Senior Notes due 2025 and the repricing of our Term Loan B due 2030. In connection with the repayment of our senior notes, we recognized a write-off of |
||||||||||||||||||
(4) For the nine months ended |
||||||||||||||||||
(5) The provision for income taxes was calculated using the applicable tax rates for each country, while excluding the tax benefits for countries where the tax benefit is not currently deemed probable of being realized. |
Supplemental Schedule 4 |
|||||||||||||||||||
|
|||||||||||||||||||
Non-GAAP Financial Measures Reconciliations, Continued | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
Adjusted EBITDA: |
|
2024 |
|
|
|
2023 |
|
Percentage
|
|
|
2024 |
|
|
|
2023 |
|
Percentage Change |
||
Net earnings |
$ |
37,724 |
|
$ |
50,821 |
|
(25.8 |
)% |
$ |
105,358 |
|
$ |
142,019 |
|
(25.8 |
)% |
|||
Add: | |||||||||||||||||||
Depreciation and amortization |
|
28,516 |
|
|
25,426 |
|
12.2 |
% |
|
83,533 |
|
|
75,773 |
|
10.2 |
% |
|||
Interest expense |
|
20,707 |
|
|
18,654 |
|
11.0 |
% |
|
58,544 |
|
|
53,262 |
|
9.9 |
% |
|||
Provision for income taxes |
|
13,339 |
|
|
20,650 |
|
(35.4 |
)% |
|
36,565 |
|
|
52,840 |
|
(30.8 |
)% |
|||
EBITDA (non-GAAP) |
|
100,286 |
|
|
115,551 |
|
(13.2 |
)% |
|
284,000 |
|
|
323,894 |
|
(12.3 |
)% |
|||
Share-based compensation |
|
4,178 |
|
|
3,550 |
|
17.7 |
% |
|
13,260 |
|
|
12,523 |
|
5.9 |
% |
|||
Restructuring |
|
383 |
|
|
(349 |
) |
209.7 |
% |
|
361 |
|
|
12,288 |
|
(97.1 |
)% |
|||
Fuel for Growth and Other |
|
11,933 |
|
|
— |
|
100.0 |
% |
|
25,760 |
|
|
— |
|
100.0 |
% |
|||
COVID-19 |
|
— |
|
|
— |
|
— |
% |
|
— |
|
|
1,052 |
|
(100.0 |
)% |
|||
Adjusted EBITDA (non-GAAP) |
$ |
116,780 |
|
$ |
118,752 |
|
(1.7 |
)% |
$ |
323,381 |
|
$ |
349,757 |
|
(7.5 |
)% |
|||
Change |
Change |
||||||||||||||||||
Adjusted EBITDA as a percentage of net sales | |||||||||||||||||||
Adjusted EBITDA margin |
|
12.4 |
% |
|
12.8 |
% |
(40 |
) |
|
11.6 |
% |
|
12.5 |
% |
(90 |
) |
|||
Operating Free Cash Flow: |
|
2024 |
|
|
2023 |
|
Percentage Change |
|
2024 |
|
|
2023 |
|
Percentage Change |
|||||
Net cash provided by operating activities |
$ |
47,895 |
|
$ |
53,123 |
|
(9.8 |
)% |
$ |
135,855 |
|
$ |
132,771 |
|
2.3 |
% |
|||
Less: | |||||||||||||||||||
Payments for property and equipment, net |
|
19,149 |
|
|
21,615 |
|
(11.4 |
)% |
|
63,808 |
|
|
63,796 |
|
0.0 |
% |
|||
Operating free cash flow (non-GAAP) |
$ |
28,746 |
|
$ |
31,508 |
|
(8.8 |
)% |
$ |
72,047 |
|
$ |
68,975 |
|
4.5 |
% |
Supplemental Schedule 5 |
|||||||||||||||||
|
|||||||||||||||||
Store Count and Comparable Sales | |||||||||||||||||
(Unaudited) | |||||||||||||||||
As of |
|||||||||||||||||
2024 |
2023 |
Change | |||||||||||||||
Number of stores: | |||||||||||||||||
SBS stores |
3,128 |
|
3,141 |
|
(13 |
) |
|||||||||||
BSG: | |||||||||||||||||
Company-operated stores |
1,200 |
|
1,204 |
|
(4 |
) |
|||||||||||
Franchise stores |
132 |
|
132 |
|
— |
|
|||||||||||
Total BSG |
1,332 |
|
1,336 |
|
(4 |
) |
|||||||||||
Total consolidated |
4,460 |
|
4,477 |
|
(17 |
) |
|||||||||||
Number of BSG distributor sales consultants (1) |
659 |
|
650 |
|
9 |
|
|||||||||||
(1) BSG distributor sales consultants (DSC) include 191 and 189 sales consultants employed by our franchisees at |
|||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||
2024 |
|
2023 |
|
|
|
2024 |
|
2023 |
Change |
||||||||
Comparable sales growth (decline): | |||||||||||||||||
SBS |
0.7 |
% |
3.0 |
% |
(230 |
) |
(1.7 |
)% |
5.0 |
% |
(670 |
) |
|||||
BSG |
2.6 |
% |
(2.4 |
)% |
500 |
|
1.8 |
% |
(0.9 |
)% |
270 |
|
|||||
Consolidated |
1.5 |
% |
0.6 |
% |
90 |
|
(0.2 |
)% |
2.4 |
% |
(260 |
) |
|||||
Our comparable sales include sales from stores that have been operating for 14 months or longer as of the last day of a month and e-commerce revenue. Additionally, our comparable sales include sales to franchisees and full service sales. Our comparable sales excludes the effect of changes in foreign exchange rates and sales from stores relocated until 14 months after the relocation. Revenue from acquisitions are excluded from our comparable sales calculation until 14 months after the acquisition. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808949378/en/
Investor Relations
940-297-3877
jharkins@sallybeauty.com
Source: