Soft trends in consumer and stylist demand contributed to Sally Beauty Holdings falling short of Wall Street estimates in the fourth quarter.
Net earnings in the quarter were $42.6 million, or 39 cents per diluted share, versus $21.3 million, or 20 cents per diluted share, in the prior-year period. Adjusted for one-time events, net earnings were $45.7 million, 42 cents per diluted share, versus $54.4 million, or 50 cents per diluted share, in the year-earlier period, the company indicated.
Sally Beauty came up short of a MarketBeat-published fourth-quarter analyst consensus estimate of 46 cents per adjusted diluted share and $930.35 million.
Consolidated comparable sales slipped 1.6% in the quarter year over year, driven primarily by lower traffic and inflationary pressures that continued to impact consumer behavior at Sally Beauty and the continuation of professional stylist demand trends seen during the past several quarters at Beauty Systems Group, the company pointed out. Consolidated net sales were $921.4 million, down 4.3% from the year before. Operating earnings were $76.9 million versus $39.2 million in the year-past quarter, while adjusted operating earnings were $79.3 million versus $83.9 million.
Sally Beauty operated 308 fewer stores at the end of the quarter compared to the year-previous period.
Sally Beauty Supply segment net sales were $524.6 million in the quarter, down 5.3% year over year as comps declined 1.2%. Beauty Systems Group segment net sales were $396.8 million in the period, down 2.9% year over year as comps declined 2.3%, the company indicated.
For the full fiscal year, Sally Beauty’s net earnings were $184.6 million, or $1.69 per diluted share, versus $183.6 million, or $1.66 per diluted share, in the quarter a year prior. Adjusted net earnings were $200.4 million, or $1.83 per diluted share, versus $237.9 million, or $2.16 per diluted share in the year-earlier period, the company maintained.
Consolidated comps increased 1.4% year over year. Net sales were $3.73 billion versus $3.82 billion in the year earlier. Operating earnings were $325 million versus $337.6 million in the year past, while adjusted operating earnings were $340.8 million versus $391.3 million.
“We are pleased to report full-year financial results in line with the expectations we laid out at the beginning of fiscal 2023,” said Denise Paulonis, Sally Beauty president and CEO. “We drove a comparable sales gain, maintained healthy gross margins and generated strong cash flow from operations against a rapidly shifting backdrop. We also advanced our consumer-centric strategies during the year, launching new concepts and bringing new services to the market while delivering unparalleled product innovation to both our Sally and BSG customers. Our teams are executing well on our strategic initiatives designed to reignite top-line growth and improve profitability, enhancing our customer centricity, growing our high-margin own brands and amplifying innovation, and increasing the efficiency of our operations. Building on our strong foundation, we are focused on the future and remain committed to creating value for our shareholders.”
