Sally Beauty Reports 0.7% Increase in Net Sales to $937.9 Million

Sally Beauty Holdings, Inc. reported a slight increase in financial performance for the three months ended December 31, 2024, with consolidated net sales rising to $937.9 million, a 0.7% increase from $931.3 million in the same period last year. The company’s gross profit also saw an uptick, increasing by $9.7 million, or 2.1%, to $476.8 million, resulting in a gross margin of 50.8%. Operating earnings surged by 45.1% to $100.3 million, while net earnings rose by 58.9% to $61.0 million, translating to diluted earnings per share of $0.58, compared to $0.35 in the prior year.

The company experienced notable changes in its operational metrics, with consolidated comparable sales increasing by 1.6%. The Sally Beauty Supply (SBS) segment reported a 0.4% increase in net sales, driven by strong growth in hair color and digital marketplaces, while the Beauty Systems Group (BSG) segment saw a 1.1% increase, attributed to expanded distribution and new brand innovations. The overall increase in sales was partially offset by a negative impact of $5.7 million from foreign currency exchange rates.

Strategically, Sally Beauty completed the sale of its corporate headquarters in Denton, Texas, for $45.5 million, resulting in a gain of approximately $26.6 million recognized in selling, general, and administrative expenses. The company also repurchased 0.8 million shares of its common stock during the quarter, at a total cost of $10.0 million, as part of its ongoing share repurchase program, which has approximately $510.8 million remaining for future repurchases.

Operationally, the company reported a decrease in its working capital to $698.1 million, down from $712.6 million at the end of the previous fiscal year, primarily due to a strategic reduction in slower-moving inventory. The total number of stores decreased slightly to 4,453 from 4,475 a year earlier. Cash provided by operations was $33.5 million, a decrease from $51.0 million in the prior year, reflecting changes in accounts payable and tax payments.

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 expanding its market presence while navigating the challenges posed by foreign currency fluctuations and evolving market conditions.