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Sally Beauty Sales Climb Over $3.5 Billion for Fiscal Year
Posted: November 15, 2012
Sally Beauty Holdings, Inc. announced strong financial results for the fourth quarter and fiscal year ended September 30, 2012, with the company’s chairman, president and CEO Gary Winterhalter stating, “Sally Beauty Holdings had another very strong year, delivering record results in both our businesses. For the fiscal year, consolidated sales grew 8% to reach over $3.5 billion with same store sales growth of 6.4% and gross margin expansion of 70 basis points. Adjusted EBITDA grew 18% to reach $591 million with cash flow from operations of $298 million. During the year, we refinanced all of our long-term debt and repurchased $200 million of our stock. We are very pleased with our 2012 performance and are quite optimistic that fiscal year 2013 is off to a good start.”
For the fiscal 2012 fourth quarter, consolidated net sales were $882.6 million, an increase of 5.4% from the fiscal 2011 fourth quarter. The fiscal 2012 fourth quarter sales increase is attributed to same stores sales growth, the addition of new stores and acquisitions. The unfavorable impact from changes in foreign currency exchange rates in the fiscal 2012 fourth quarter was $8.2 million or 1% of sales on a consolidated basis. Consolidated same store sales growth in the fiscal 2012 fourth quarter was 4.3% compared to 5.6% in the fiscal 2011 fourth quarter.
Consolidated net sales for fiscal year 2012 were $3.5 billion, an increase of 7.8% from fiscal year 2011, and include an unfavorable impact from foreign currency exchange of $26.3 million, or 0.7% of sales. Fiscal 2012 sales increased primarily due to same stores sales growth, the addition of new stores and acquisitions. Consolidated same store sales growth in fiscal year 2012 was 6.4% compared to 6.1% in fiscal year 2011.
The fiscal 2012 fourth quarter Results for Sally Beauty Supply saw sales of $554.7 million, up 6% from $523.4 million in the fiscal 2011 fourth quarter. The unfavorable impact of foreign currency exchange on net sales was $7.6 million, or 1.4% of sales. Same store sales growth was at 3.8% versus 6.4% in the fiscal 2011 fourth quarter, and segment operating earnings were $99.5 million, down 0.7% from $100.2 million in the fiscal 2011 fourth quarter.
Fiscal 2012 results for Sally Beauty Supply recorded sales of $2.2 billion, up 9.2% from fiscal year 2011. The unfavorable impact of foreign currency exchange was $22.6 million or 1% of sales on a full year basis. Same store sales growth was 6.5% versus 6.3% in fiscal year 2011, and sales from international locations (Mexico, Canada, the U.K., Ireland, Belgium, the Netherlands, France, Germany, Spain and Chile) represented 22% of segment sales versus 21% in fiscal 2011. Net store base increased by 151 or 4.8% for total store count of 3,309. This increase is from organic store growth of 4.1% and 0.7% from acquisitions. Store growth in the North American business was 4.2% while store growth in the International business was 8.9%. Sales growth in fiscal 2012 was driven by same store sales, new store openings and acquisitions; unfavorable foreign currency exchange partially offset sales growth. Gross profit margin improvement resulted from a favorable shift in product and customer mix and low-cost sourcing initiatives.
For the Beauty Systems Group fiscal 2012 fourth quarter results saw sales of $327.8 million, up 4.5% from $313.8 million in fiscal 2011. The impact of unfavorable foreign currency exchange on net sales was $0.7 million, or 0.2% of sales. Same store sales growth was at 5.5% versus 3.5% in the fiscal 2011 fourth quarter. And sales growth for Beauty Systems Group was driven by growth in same store sales and new store openings. Segment earnings growth is primarily due to improvement in gross profit and SG&A leverage.
The fiscal 2012 results for Beauty Systems Group recorded sales of $1.33 billion, up 5.4% from $1.26 billion in fiscal 2011. The impact of unfavorable foreign currency exchange on net sales was$3.7 million, or 0.3% of sales. Same store sales growth was at 6.1% versus 5.5% in fiscal 2011, and net store base increased by 39 or 3.4% for total store count of 1,190, including 159 franchised locations. Store growth is from new store openings. Sales growth in fiscal year 2012 for the Beauty Systems Group was primarily due to same store sales growth and new store openings. Gross margin expansion was primarily due to improved sales and product mix, and expansion in new and existing territories. Segment earnings growth is primarily due to sales growth, gross profit improvement and synergies from acquisitions.
The fiscal year 2013 outlook for Sally Beauty sees consolidated same store sales growth expected to be in the range of 4–5%. Same store sales growth for the first half of fiscal year 2013 is expected to trend towars the low end of this range due to the unusually strong same store sales growth in the first half of fiscal year 2012.