p strong Sally Beauty Holdings Reports Q3 2024 Financial Results strongpp strong Overview strongpp

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Sally Beauty Holdings Reports Q3 2024 Financial Results

Overview

Sally Beauty Holdings, Inc. (NYSE:SBH) ("the Company"), the leader in professional hair color, today announced its financial results for the third quarter ended June 30, 2024.

Key Financial Metrics

Metric Q3 2024 Q3 2023 YoY % Change Consensus Estimates Variance to Estimates
Total Revenue $942 million $930 million +1.2% $931.68 million +1.1%
GAAP Diluted EPS $0.36 $0.46 -21.7% $0.40 -10.0%
Adjusted Diluted EPS $0.45 $0.49 -8.2% - -
GAAP Operating Earnings $72 million $90.1 million -20.1% - -
Adjusted Operating Earnings $84 million $89.8 million -6.5% - -
Cash Flow from Operations $48 million - - - -

Interpretation: Sally Beauty Holdings reported respectable financial performance with a slight revenue increase of 1.2% year-over-year. However, the company missed earnings estimates with a GAAP diluted EPS of $0.36 compared to the anticipated $0.40, indicating challenges in meeting expected profitability.

Segment Revenue Performance

Segment Q3 2024 Revenue Q3 2023 Revenue YoY % Change Q3 2024 Comparable Sales Change Q3 2024 E-commerce Sales
Sally Beauty Supply $536.5 million $535 million +0.3% +0.7% $37 million (7.0%)
Beauty Systems Group $405.8 million $396 million +2.5% +2.6% $54 million (13.4%)

Interpretation: Both major segments demonstrated positive sales figures, with Beauty Systems Group leading the surge with a 2.5% increase in net sales, reflecting effective innovation and territorial expansion activities. Sally Beauty Supply showed moderate growth, marked by improved traffic and conversion rates.

Operational Data

Operational Metric Q3 2024 Value Notes
Consolidated Comparable Sales +1.5% Boosted by strategic initiatives
Global E-commerce Sales $92 million 9.7% of net sales
Consolidated Gross Margin 51.0% Flat year-over-year
SG&A Expenses $408.7 million Increased $24.5 million YoY
EBITDA $116.8 million Adjusted
Net Debt Leverage Ratio 2.2x As of June 30, 2024

Comments from Company Officers

"We are pleased to report solid third quarter results, including positive comparable sales in both our Sally Beauty and Beauty Systems Group segments," said Denise Paulonis, president and CEO. "Our strategic initiatives, focusing on performance marketing, marketplace expansions, and digital enhancements, are driving positive trends in our customer base. We remain committed to driving long-term profitable growth and shareholder value."

Dividends and Share Repurchase Program

The Company executed $10 million in share repurchases during the quarter.

Guidance

The Company maintains its full-year fiscal 2024 guidance, projecting flat net sales and comparable sales compared to the prior year, gross margin between 50.5% to 51.0%, adjusted operating margin of approximately 8.5%, operating cash flow of around $240 million, and capital expenditures of around $100 million.

Stock Price Movement

Following the earnings release, SBH's stock price saw a slight decrease of 0.42%.

In summary, despite the challenges indicated by a drop in EPS and increased SG&A expenses, Sally Beauty Holdings showed resilience through positive growth in major segments and maintained its forward guidance, reflecting an optimistic outlook for the remainder of fiscal 2024.

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