Sally Beauty Holdings reported a solid third quarter, maintaining year over year sales performance and a slight uptick in same store sales growth.
Consolidated net sales were $998 million in the third quarter ended June 30, essentially flat when compared to the prior year. Same store sales growth of 0.3% and incremental sales from new stores were partially offset by unfavorable foreign currency translation, the company said.
In the Sally Beauty Supply segment, sales were $594.9 million in the third quarter, down 1.3% versus the prior year. In the company’s beauty systems group, sales were $403.2 million in the third quarter, up 1.9% versus the prior year, driven by growth in same store sales, incremental sales from acquisitions and net new stores. Same store sales growth was 2.8% in the beauty systems segment.
Net earnings in the quarter were $66.5 million, a decrease of $1.4 million, or 2%, from the prior year. Reported diluted earnings per share in the third quarter were $0.49.
“We are pleased to report solid third quarter results, with improved revenue performance, excellent gross margin expansion and meaningful growth in adjusted earnings per share,” said Chris Brickman, Sally Beauty Holding’s president and CEO. “Our results reflect a balanced approach to managing our business in a challenging retail environment, combining appropriate long-term strategic investments with an unrelenting focus on operating discipline and organizational efficiencies. Our effort to position the company for better financial performance extends to our capital structure. We refinanced $850 million of our long-term debt in early July by redeeming higher cost senior notes with funds generated from a new, lower cost institutional term loan, a move that should generate a significant reduction in annual cash interest expense. We intend to execute on our strategic priorities and strive for additional gross margin improvement and cost savings in order to achieve our financial goals for the year and deliver even better results in fiscal 2018.”