Sally Beauty Holdings, Inc. SBH reported third-quarter fiscal 2022 results, with the top line beating the Zacks Consensus Estimate and the bottom line missing the same. Both, net sales and earnings declined year over year.
During the quarter, management witnessed pressure on net sales as inflation and supply-chain-related challenges persisted. That said, Sally Beauty continues to focus on its four strategic growth pillars. These include leveraging the digital platform, driving loyalty and personalization, undertaking product innovation and enhancing the supply chain.
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Q3 in Detail
Sally Beauty reported adjusted earnings of 55 cents per share, which missed the Zacks Consensus Estimate of 59 cents. The metric declined from 68 cents reported in the year-ago quarter.
Consolidated net sales of $961.5 million beat the Zacks Consensus Estimate of $944.2 million. However, the metric dropped 6% year over year, with an impact of unfavorable foreign currency translation of 130 basis points (bps) on consolidated net sales. Comparable sales fell 3.6% owing to persistent inflationary pressures, supply chain challenges and tough year-over-year comparison. The company operated 149 fewer stores compared with the year-ago quarter’s levels.
The company’s global e-commerce sales came in at $81 million, reflecting 8.4% of consolidated net sales.
Consolidated gross profit came in at $490.2 million, down 4.7% from $514.4 million reported in the year-ago quarter. Consolidated gross margin expanded 70 basis points to 51%, backed by improved product margins at Sally Beauty and Beauty Systems Group. This was somewhat offset by increased distribution and freight costs.
Adjusted selling, general and administrative (SG&A) expenses, excluding COVID-19-related net expenses, came in at $389.7 million, up $4 million from the year-ago quarter’s figure, led by higher labor costs. These were somewhat offset by reduced accrued bonus, variable and advertising costs. As a percentage of
