Sally Beauty Holdings, Inc. announced its fiscal 2014 first quarter results, with consolidated net sales of $940.5 million, representing a 3.9% increase. Same store sales growth was 2.2%, and earnings for the quarter were $58 million, a 1.7% decrease from fiscal 2013 first quarter net earnings of $59 million.
“In the fiscal 2014 first quarter, consolidated net sales and same store sales grew 3.9% and 2.2%, respectively,” stated Gary Winterhalter, chairman, president and CEO of Sally Beauty Holdings. “I am pleased with same store sales growth in our Sally business of 0.9% and the sequential improvement when compared to fiscal 2013 third and fourth quarters which were down 0.8% and down 1.5%, respectively. The improvement was primarily due to an increase in traffic, which gives me confidence that the return to our targeted marketing campaign and the introduction of new brands in our Sally U.S. business will continue to improve traffic results throughout the fiscal year.”
For its Sally Beauty Supply stores, sales were $573.4 million, up 2.6% from the first quarter in 2013. The sales increase was driven by new store openings and same store sales, with the net store base increased by 112 over Q1 2013 for a total of 3,444 stores. Same store sales growth of 0.9% versus growth of 1.6% in the fiscal 2013 first quarter was recorded, versus a decline of 0.8% and a decline of 1.5% in fiscal 2013 third and fourth quarters, respectively. Gross profit margin decline of 10 basis points primarily resulted from an unfavorable product mix shift. Segment operating earnings and margin were negatively impacted by lower gross profit margin and higher SG&A expenses.
For its Beauty System Group, sales were $367.1 million for the quarter, up 5.9% compared to first quarter 2013, and this increase was primarily driven by growth in same store sales, net new store openings and the full service business. Same store sales growth was 5.2% versus 5.6% in the fiscal 2013 first quarter, and net store count was 1,249, an increase of 56 stores over the fiscal 2013 first quarter. Also, total BSG distributor sales consultants at the end of the fiscal 2014 first quarter were 992 versus 1,035 at the end of the fiscal 2013 first quarter.