NYSE$SBH

Sally Beauty Holdings Inc. · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Reported third quarter fiscal 2023 results and maintained full year sales guidance while updating operating margin outlook to high end of previous range.

Sally Beauty Holdings reported consolidated net sales of $931 million, a decrease of 3.2% compared to the prior year, but consolidated comparable sales increased 0.6%. The company's GAAP diluted EPS was $0.46, while the adjusted diluted EPS was $0.49. They are on track with their operating initiatives and the financial guidance they originally laid out for fiscal 2023.

  • Q3 GAAP Operating Margin was 9.7%; Adjusted Operating Margin was 9.6%
  • Q3 GAAP Diluted EPS was $0.46; Adjusted Diluted EPS was $0.49
  • Introduced New Store Concept – Happy Beauty Co.
  • Global e-commerce sales increased 3% to $83 million, representing 8.9% of net sales

Headline financials

Total Revenue

$931M

Previous: $961M-3.2%
EPS (adj)

$0.49

Previous: $0.55-10.9%
Adjusted EBITDA Margin

12.8%

No prior period
Adjusted Gross Margin

50.9%

No prior period
Adjusted Operating Margin

9.6%

Previous: 10.5%-8.6%
Capital Expenditures

-$63.8M

Previous: -$67.2M+5.1%
Free Cash Flow

-$13M

Previous: -$20.7M+37.2%
Net Income

$50.8M

Previous: $46.6M+9.1%
Operating Income

$90.1M

Previous: $99.2M-9.2%
Gross Profit

$475M

Previous: $490M-3.2%
Cash & Equivalents

$74.3M

Previous: $101M-26.6%
Total Assets

$2.68B

Previous: $2.69B-0.4%
Stock-Based Comp

$3.55M

Previous: $2.11M+68.0%

Revenue & EPS history

Sally Beauty · Revenue · Quarterly

$931M

Q3 2023-3.2%vs Q3 2022
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Revenue by segment

Sally Beauty · $931M total across 2 segments · Q3 2023

  • Sally Beauty Supply
    $535M-3.0%
  • Beauty Systems Group
    $396M-3.3%

Forward guidance

The Company is updating its full fiscal year 2023 guidance by revising its Adjusted Operating Margin to the higher end of the original guidance. All other components of the Company’s full fiscal year 2023 original guidance are being maintained.

Tailwinds

  • Comparable sales are expected to increase by low single digits compared to the prior year, driven by growth in key categories
  • Sales transfer from store closures related to the Company’s store optimization efforts
  • Expanded Regis distribution
  • New strategic initiatives
  • Gross margin is expected to remain above 50%

Headwinds

  • Net sales are expected to decline by low-single digits compared to the prior year, reflecting the unfavorable impact due to store closures from the Company’s store optimization efforts
  • Store closures from the Company’s store optimization efforts
  • Net of expected sales recapture rates
  • Adjusted Operating Margin is now expected to be in the range of 9.0% and 9.4%
  • Previously Adjusted Operating Margin was expected to be in the range of 8.5% to 9.5%

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+0.9%

Avg return

Earnings day

+0.5%

Avg return

5 days after

+1.8%

Avg return

30 days after

53%

36 / 68 earnings

Positive

+24.8%

Q2 2021

Best reaction

-17.4%

Q1 2020

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026-6.9%-15.2%-6.8%
Q1 2026+5.2%+1.0%-7.6%
Q4 2025-1.7%-0.2%+5.6%
Q2 2025+22.2%+12.2%+12.1%
Q1 2025+4.5%+2.0%-0.7%
Q4 2024+7.0%+4.4%-0.5%
Q3 2024+8.4%+19.4%+27.2%
Q2 2024-1.5%+5.5%+5.3%
Q1 2024+2.8%+5.0%+2.6%
Q4 2023+12.1%+14.8%+61.3%
Q3 2023-4.1%-1.6%-11.9%
Q2 2023-15.8%-18.7%-13.9%
Q1 2023+9.1%+8.5%-0.5%
Q4 2022+8.4%+1.8%-7.9%
Q3 2022-0.8%+0.7%+5.8%
Q2 2022-5.6%-10.9%-9.2%
Q1 2022-1.4%-2.6%-2.8%
Q4 2021+12.8%+14.3%+15.3%
Q3 2021-14.0%-13.0%-14.0%
Q2 2021+24.8%+17.0%-1.1%
Q1 2021-7.8%-2.3%+14.4%
Q4 2020-4.9%+3.2%+8.0%
Q3 2020-12.8%-8.8%-12.9%
Q2 2020+2.7%+6.0%+61.9%
Q1 2020-17.4%-16.8%-20.7%
Q4 2019+19.6%+19.9%+13.3%
Q3 2019+9.8%+7.9%-1.0%
Q2 2019-8.3%-6.6%-14.2%
Q1 2019-1.5%-3.3%-2.0%
Q4 2018+15.8%+10.4%+2.7%
Q3 2018-13.8%-13.2%-6.1%
Q2 2018-12.6%-11.6%-11.0%
Q1 2018+8.2%+8.2%+11.5%
Q4 2017-1.3%+1.4%+8.0%
Q3 2017+2.2%+3.6%-6.3%
Q2 2017+1.1%+3.9%-8.4%
Q1 2017-7.0%-5.2%-10.1%
Q4 2016-10.7%-10.0%-7.5%
Q3 2016-11.3%-11.4%-7.2%
Q2 2016-5.8%
Q1 2016+13.7%
Q4 2015+7.3%
Q3 2015-9.5%
Q2 2015+1.5%
Q1 2015+3.6%
Q4 2014+2.9%
Q3 2014+1.7%
Q2 2014-7.8%
Q1 2014+5.9%
Q4 2013-0.6%
Q3 2013-9.3%
Q2 2013+1.0%
Q1 2013+0.7%
Q4 2012-1.5%
Q3 2012+1.8%
Q2 2012-0.2%
Q4 2011+5.4%
Q1 2012-0.5%
Q3 2011+1.6%
Q2 2011+7.8%
Q1 2010+15.0%
Q1 2011+1.5%
Q4 2008+2.8%
Q2 2010+2.8%
Q4 2010+2.8%
Q3 2009-0.3%
Q3 2010-0.3%
Q4 2009-0.3%

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