Although inflationary pressures hurt its consumer business, with sales and earnings both down year over year, Sally Beauty Holdings beat an analyst estimate on both revenues and profits in the first quarter.
Net earnings were $38.4 million, or 35 cents per diluted share, versus $50.3 million, or 46 cents per diluted share, in the year-earlier quarter. Adjusted for one-time charges, net earnings were $42 million, or 39 cents per diluted share, versus $56.9 million, or 52 cents per diluted share, the company reported.
An analyst consensus estimate published by Yahoo Finance called for adjusted diluted earnings per share of 37 cents and revenues of $929.6 million.
Net sales were $931.3 million versus $957.1 million in the year-previous quarter, Sally Beauty indicated. Operating earnings were $69.1 million versus $86.6 billion in the year-before period.
The consumer-focused Sally Beauty Supply segment posted a net sales decrease of 4.8% to $523.2 million in the quarter. Segment comparable sales decreased 1.9% in the period, primarily reflecting lower traffic and inflationary pressures that impacted consumer behavior, the company stated. In the quarter, the segment benefited from a favorable foreign currency translation impact of 160 basis points. On a constant currency basis, segment e-commerce sales were $35 million or 6.7% of segment net revenue for the quarter, Sally Beauty noted. Operating earnings were $77.6 million versus $99.2 million in the prior-year period.
The professional-oriented Beauty Systems Group segment net sales were $408.1 million versus $407.6 million in the year-past quarter. Segment comps gained 0.7% in the period year over year, primarily reflecting expanded distribution, new brand innovation and improving salon demand trends, Sally Beauty maintained. Operating earnings were $44.6 million versus $49.6 million in the year-before quarter. On a constant currency basis, segment e-commerce sales were $56 million or 13.8% of segment net sales in the period.
“We are pleased with our start to the year, delivering results in line with our expectations while continuing to make solid progress on our strategic initiatives to drive top-line growth and improve profitability over the long term,” said Denise Paulonis, Sally Beauty president and CEO. “During the quarter, our teams executed well as we continued to focus on customer centricity and bringing innovation, education and new services to our customers. The business generated solid cash flow from operations of more than $50 million in the quarter, allowing us to return value to shareholders through our share repurchase program.”
