Sally Beauty Holdings, Inc. reported its financial results for the third quarter of fiscal 2025, revealing a slight decline in net sales but an increase in profitability. For the three months ended June 30, 2025, the company generated net sales of $933.3 million, a decrease of 1.0% compared to $942.3 million in the same period last year. Despite the drop in sales, net earnings rose to $45.7 million, up 21.2% from $37.7 million in the prior year, driven by improved operating earnings and a reduction in interest expenses.
The company's gross profit for the quarter remained relatively stable at $481.0 million, with a slight increase in gross margin to 51.5%, up 50 basis points from the previous year. Operating earnings increased by 8.9% to $78.2 million, reflecting a higher operating margin of 8.4%. The increase in profitability was attributed to effective cost management and operational efficiencies, particularly in the Beauty Systems Group (BSG) segment, which saw a 8.4% increase in operating earnings.
Sally Beauty's strategic initiatives included the sale of its corporate headquarters in Denton, Texas, for $45.5 million, which resulted in a gain of approximately $26.6 million recognized in the financial statements. Additionally, the company divested its subsidiary, Pro-Duo Spain SL, for $3.2 million, further streamlining its operations. The company also continued its share repurchase program, buying back 3.3 million shares for $33.0 million during the nine months ended June 30, 2025.
Operationally, the company reported a decrease in the number of stores, with a total of 4,425 locations at the end of the quarter, down from 4,460 a year earlier. Comparable sales decreased by 0.4%, with the Sally Beauty Supply (SBS) segment experiencing a decline of 1.1%, while BSG saw a slight increase of 0.5%. The company attributed the decline in comparable sales to macroeconomic factors affecting consumer spending, although it noted strong growth in hair color and digital sales.
Looking ahead, Sally Beauty anticipates that its existing cash balances, along with cash generated from operations and available funds under its asset-based lending facility, will be sufficient to meet its working capital and capital expenditure needs over the next twelve months. The company remains focused on enhancing its operational efficiencies and adapting to market conditions to drive future growth.
About Sally Beauty Holdings, Inc.
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