Sally Beauty fell short in its fourth quarter, as the beauty retailer pointed to the impact of the hurricanes for a sales decline.
Consolidated net sales were $974.2 million in the fourth quarter, a decrease of 0.2% compared to the prior year. Same store sales decreased 1.4% in the quarter. Hurricanes Harvey, Irma and Maria resulted in a number of store closures from late August through the end of the company’s fiscal year. The negative impact of the hurricanes on sales growth and same store sales growth was approximately 80 and 70 basis points, respectively.
In the Sally Beauty segment, net sales were $584.4 million in the quarter, a decrease of 0.8% versus the prior year. Same store sales decreased 2.5%. In the beauty systems group, net sales were $389.8 million in the quarter, an increase of 0.7% versus the prior year, and same store sales grew 1%.
Net earnings were $35.7 million in the fourth quarter, down from $52.6 million in the previous fourth quarter. Reported diluted earnings per share in the fourth quarter were $0.27, a decrease of 25% compared to the prior year, driven primarily by expenses related to both the company’s debt refinancing and restructuring plan. Adjusted diluted earnings per share in the fourth quarter were $0.45. The hurricanes negatively impacted both reported and adjusted diluted earnings per share in the quarter by approximately $0.03.
“Even after considering the challenges created by the natural disasters in the quarter, which impacted August and September, our revenue fell short of our expectations,” said Chris Brickman, president and CEO, Sally Beauty. “However, the modest decline in consolidated net sales was offset by the successful completion of our 2017 restructuring plan, tight control of discretionary expenses, the successful refinancing of a large portion of our long-term debt and the continued use of our strong cash flows to acquire shares of our common stock. We are restructuring our international operations in order to leverage the full scale of our consolidated European business and deliver additional cost savings. At the same time, we are making investments in our e-commerce capabilities that will allow us to support two-day delivery to more than 90% of U.S. households by the middle of fiscal 2018.”