Sally Beauty Q3 Earnings Slip

For the third quarter, Sally Beauty Holdings posted results the company described as disappointing. GAAP net earnings slipped to $62.5 million, or 39 cents per diluted share, versus $67.8 million, or 42 cents per diluted share, in the 2014 period, while adjusted net earnings slipped to $65.2 million, or 41 cents per diluted share, from $70.4 million, or 43 cents per diluted share, year over year.

Consolidated comparable store sales gained 3.1% versus the prior-year quarter. Consolidated net sales were $967.9 million in the third quarter, Sally Beauty reported, an increase of 2% from last year’s period.

“We are disappointed in the third quarter results for our Sally business, but not discouraged,” said Sally Beauty president and CEO Christian Brickman. “It is taking longer than we expected for traffic from the non-Beauty Club Card customer to recover, but we still have great confidence that we are moving in the right direction. Over the next several quarters, we expect continued progression in our consolidated Sally same store sales back to historical trend levels of 3% to 4% as we plan to complete the execution of our planned initiatives and our customers have the chance to experience these changes in our stores.”

Brickman continued, “As we enter the fourth quarter, we believe the disruption caused by the recent data security incident is now behind us. We intend to further enhance our systems and culture to ensure the security of our networks and customer data, and our Sally team continues to be laser focused on driving sales progression. To deliver on this objective, we will invest in national TV for the Sally brand through our sponsorship of Project Runway, which will begin to air early August. We expect to complete the reset of our cash-wrap area, upgrade our channel-leading eyelash studio and significantly improve the look and shopability of the cosmetics section in the stores. Finally, we plan to continue our store refresh program and refine our recently launched CRM model.”