Sally Beauty Holdings Unveils Financial Performance for the Initial Quarter of Fiscal Year 2024

Sally Beauty Holdings, Inc. (NYSE: SBH), a prominent player in the professional hair color industry, has reported its financial outcomes for the first quarter concluded on December 31, 2023. The company is set to conduct a conference call at 7:30 a.m. Central Time today to delve into these results and discuss its overall business performance.

Key Highlights for the Fiscal 2024 First Quarter:

  • Consolidated net sales amounted to $931 million, showcasing a 2.7% reduction compared to the previous year.
  • A 0.8% decline in consolidated comparable sales.
  • Global e-commerce sales hit $91 million, representing 9.8% of total net sales.
  • GAAP gross margin stood at 50.2%.
  • GAAP operating earnings reached $69 million, with a GAAP operating margin of 7.4%. Adjusted Operating Earnings were $74 million, accompanied by an Adjusted Operating Margin of 7.9%.
  • GAAP diluted net earnings per share were $0.35, while Adjusted Diluted Net Earnings Per Share were $0.39.
  • Cash flow from operations amounted to $51 million, with Operating Free Cash Flow totaling $20 million.

Denise Paulonis, the President and CEO, expressed satisfaction with the company’s performance at the start of the year. She highlighted the alignment of results with expectations and the ongoing progress in strategic initiatives geared towards long-term top-line growth and enhanced profitability. Paulonis credited the solid execution by the teams, emphasizing the focus on customer-centric approaches and the introduction of innovation, education, and new services. The company generated robust cash flow, exceeding $50 million in the quarter, allowing the return of value to shareholders through share repurchases.

Detailed Fiscal 2024 First Quarter Operating Results:

  • Consolidated net sales for the first quarter were $931.3 million, a 2.7% decrease primarily attributed to the adverse impact from store closures in December 2022.
  • Consolidated gross profit amounted to $467.2 million, reflecting a 4.4% decline compared to the previous year.
  • Selling, general and administrative (SG&A) expenses totaled $398.1 million, showcasing a $6.6 million increase from the prior year.
  • GAAP operating earnings and operating margin were $69.1 million and 7.4%, respectively, compared to $86.6 million and 9.0% in the previous year.
  • Adjusted Operating Earnings and Operating Margin, excluding certain expenses, were $73.9 million and 7.9%, compared to $95.4 million and 10.0% in the prior year.
  • GAAP net earnings for the quarter were $38.4 million, or $0.35 per diluted share, compared to $50.3 million, or $0.46 per diluted share, in the prior year.
  • Adjusted Net Earnings were $42.0 million, or $0.39 per diluted share, compared to Adjusted Net Earnings of $56.9 million, or $0.52 per diluted share, in the previous year.
  • Adjusted EBITDA in the first quarter witnessed a 14.9% decrease compared to the prior year, amounting to $107.1 million, with an Adjusted EBITDA Margin of 11.5%.

Balance Sheet and Cash Flow as of December 31, 2023:

  • The company reported cash and cash equivalents of $121 million, with no outstanding balance under its asset-based revolving line of credit.
  • Inventory at the end of the quarter was $1.01 billion, reflecting a 2.1% increase compared to the previous year.
  • The net debt leverage ratio stood at 2.2x.
  • Cash flow from operations reached $51.0 million, and capital expenditures for the quarter totaled $30.6 million.
  • The company repurchased 1.9 million shares under its share repurchase program, amounting to $20 million during the quarter.

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