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Fourth Quarter, Overall 2013 Sales Climb for Sally Beauty
Posted: November 14, 2013
Sally Beauty Holdings, Inc. announced financial results for the fourth quarter and fiscal year ended September 30, 2013. “Fiscal 2013 was challenging due to comparisons against our record-breaking growth in fiscal 2012 and soft traffic in our Sally U.S. retail business,” stated Gary Winterhalter, chairman, president and CEO. “Nevertheless, our performance was solid and we executed on our strategic initiatives, including our information technology projects in the U.S. and Europe as well as the new U.K. distribution center. For 2013, we generated $310 million in operating cash flow and repurchased approximately $510 million, or 19 million shares of our common stock. As we move into fiscal 2014, I believe that we’ve embarked on the right initiatives to gradually improve retail traffic in the Sally U.S. stores and continue the strong performance at BSG and our International businesses.”
For the fiscal 2013 fourth quarter, consolidated net sales were $906.4 million, an increase of 2.7% from the fiscal 2012 fourth quarter. The fiscal 2013 fourth quarter sales increase is primarily attributed to the addition of new stores and growth in BSG’s full service business. The impact from changes in foreign currency exchange rates in the fiscal 2013 fourth quarter was not material. Consolidated same store sales growth in the fiscal 2013 fourth quarter was 0.4% compared to 4.3% in the fiscal 2012 fourth quarter.
Consolidated net sales for fiscal year 2013 were over $3.6 billion, an increase of 2.8% from fiscal year 2012. The impact from foreign currency exchange in the 2013 fiscal year was not material. Fiscal 2013 sales increased primarily due to the addition of new stores and same stores sales growth. Consolidated same store sales growth in fiscal year 2013 was 0.8% compared to 6.4% in fiscal year 2012.
For the Sally Beauty Supply division, sales for fiscal 2013 fourth quarter were $556.1 million, up 0.2% from $554.7 million in the fiscal 2012 fourth quarter. The favorable impact of foreign currency exchange on net sales was $1 million, or 0.2% of sales. Same store sales declined 1.5% versus growth of 3.8% in the fiscal 2012 fourth quarter. Sales growth in the fiscal 2013 fourth quarter was driven by new store openings and growth in the international business, which were largely offset by a same store sales decline in the Sally U.S. business.
For fiscal 2013, Sally Beauty Supply saw sales of $2.2 billion, up 1.4% over fiscal year 2012. The impact of foreign currency exchange was not material for the year. Same store sales declined 0.6% versus growth of 6.5% in fiscal year 2012, and sales from international locations (Mexico, Canada, the U.K., Ireland, Belgium, the Netherlands, France, Germany, Spain and Chile) represented 23% of segment sales versus 22% in fiscal 2012. Sales growth in fiscal 2013 was driven by new store openings and growth in the international business while partially offset by a same store sales decline in the Sally U.S. business. Gross profit margin improvement of 30 bps resulted from the favorable shift in product and customer mix and low-cost sourcing initiatives in the U.S. business and improvement in the international business.
For the Beauty Systems Group (BSG) division’s fiscal 2013 fourth quarter, sales were $350.3 million, up 6.9% from $327.8 million in the fiscal 2012 fourth quarter. The impact of unfavorable foreign currency exchange on net sales was $1.5 million, or 0.4% of sales. Same store sales growth of 5.2% versus 5.5% in the fiscal 2012 fourth quarter. Sales growth for Beauty Systems Group was driven by growth in same store sales, new store openings and the full service business. Consolidated gross profit margin in the fiscal 2013 fourth quarter was down over the prior year due to difficult comparisons against a record high gross profit margin in BSG due to the timing of vendor allowances in the fiscal 2012 fourth quarter. Segment operating earnings growth is primarily due to sales growth and SG&A leverage. Segment operating margins are down primarily due to a decline in gross margin.
For overall fiscal 2013 for BSG, sales were $1.4 billion, up 5.1% from $1.3 billion in fiscal 2012. The impact of foreign currency exchange on net sales was not material for the year. Same store sales growth of 4.2% versus 6.1% in fiscal 2012. Sales growth in fiscal year 2013 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 SG&A leverage.