Sally Magnificence Holdings Reviews Third Quarter Fiscal 2022 Outcomes

DENTON, Texas–(BUSINESS WIRE)–Sally Magnificence Holdings, Inc. (NYSE: SBH) (“the Firm”), the chief in skilled hair colour, right this moment introduced monetary outcomes for its third quarter ended June 30, 2022. The Firm will maintain a convention name right this moment at 7:30 a.m. Central Time to debate these outcomes and its enterprise.

Fiscal 2022 Third Quarter Abstract

  • Consolidated internet gross sales of $961 million, a lower of 6.0% in comparison with the prior 12 months, with a comparable gross sales lower of three.6%;
  • International e-commerce gross sales of $81 million, representing 8.4% of internet gross sales;
  • Gross margin elevated 70 foundation factors to 51.0%;
  • GAAP working earnings of $99 million and GAAP working margin of 10.3%, Adjusted Working Earnings of $101 million and Adjusted Working Margin of 10.5%;
  • GAAP diluted internet earnings per share of $0.43 and Adjusted Diluted Web Earnings Per Share of $0.55; and
  • Accomplished full reimbursement of $300 million of 8.75% senior secured notes.

Throughout the third quarter, we delivered wholesome gross margins of 51% and adjusted working margin of 10.5% regardless of the difficult macro backdrop,” mentioned Denise Paulonis, president and chief government officer. “Our groups executed nicely amidst continued inflationary and provide chain pressures that impacted topline efficiency. We’re happy that our robust monetary place allowed us to proceed investing for development whereas finishing the complete reimbursement of $300 million of our 8.75% senior secured notes within the quarter. With a wholesome stability sheet, a robust working infrastructure and a sticky core buyer, we’re nicely positioned to proceed navigating the advanced macro surroundings and stay centered on our 4 key development pillars.”

Fiscal 2022 Third Quarter Working Outcomes

Third quarter consolidated internet gross sales had been $961.5 million, a lower of 6.0% in comparison with the prior 12 months. Comparable gross sales decreased 3.6%, pushed primarily by continued inflationary pressures, provide chain challenges and the troublesome comparability to final 12 months. The Firm was working 149 fewer shops on the finish of the quarter in comparison with the prior 12 months. Overseas forex translation had an unfavorable influence of 130 foundation factors on consolidated internet gross sales for the quarter. International e-commerce gross sales had been $81 million or 8.4% of consolidated internet gross sales for the quarter.

Consolidated gross revenue for the third quarter was $490.2 million in comparison with $514.4 million within the prior 12 months, a lower of 4.7%. Consolidated gross margin was 51.0%, a rise of 70 foundation factors in comparison with 50.3% within the prior 12 months, pushed primarily by increased product margins at each Sally Magnificence and Magnificence Techniques Group, partially offset by increased distribution and freight prices.

Promoting, common and administrative (SG&A) bills totaled $391.0 million, up $4.5 million in comparison with the prior 12 months interval. Adjusted Promoting, Common and Administrative Bills, excluding COVID-19 associated internet bills in each the 2022 and 2021 quarters, had been $389.7 million, up $4.0 million in comparison with the prior 12 months. Elevated labor prices had been partially offset by decrease accrued bonus, variable, and promoting bills. As a proportion of gross sales, Adjusted SG&A bills had been 40.5% in comparison with 37.7% within the prior 12 months.

GAAP working earnings and working margin within the third quarter had been $99.2 million and 10.3%, in comparison with $127.4 million and 12.5%, within the prior 12 months. Adjusted Working Earnings and Working Margin, excluding COVID-19 associated internet bills and the Firm’s beforehand introduced restructuring efforts in each the 2022 and 2021 quarters, had been $100.6 million and 10.5%, in comparison with $128.7 million and 12.6%, within the prior 12 months.

GAAP internet earnings within the third quarter had been $46.6 million, or $0.43 per diluted share, in comparison with GAAP internet earnings of $76.2 million, or $0.66 per diluted share within the prior 12 months. Adjusted Web Earnings, excluding COVID-19 associated internet bills, the Firm’s beforehand introduced restructuring efforts and the loss on extinguishment of debt, had been $59.8 million, or $0.55 per diluted share, in comparison with Adjusted Web Earnings of $78.0 million, or $0.68 per diluted share within the prior 12 months. Adjusted EBITDA within the third quarter was $128.3 million, a lower of 18.0% in comparison with the prior 12 months, and Adjusted EBITDA Margin was 13.3%, a lower of 200 foundation factors in comparison with the prior 12 months.

Stability Sheet and Money Move

As of June 30, 2022, the Firm had money and money equivalents of $101 million and an excellent stability of $167 million beneath its asset-based revolving line of credit score. On the finish of the quarter, stock was $1.01 billion, up 8.5% versus a 12 months in the past. Third quarter money movement from operations was $52.0 million. Capital expenditures within the quarter totaled $23.1 million.

Within the third quarter, the Firm used extra money and a mortgage advance beneath its revolving line of credit score to fund the complete reimbursement of $300 million excellent beneath its 8.75% senior secured notes. Moreover, the Firm ended the quarter with a internet debt leverage ratio of two.2x.

Fiscal 2022 Third Quarter Phase Outcomes

Sally Magnificence Provide

  • Phase internet gross sales had been $551.7 million within the quarter, a lower of 8.5% in comparison with the prior 12 months. The phase had an unfavorable influence of 200 foundation factors from international forex translation on reported gross sales and operated 143 fewer shops on the finish of the quarter in comparison with the prior 12 months. Phase e-commerce gross sales had been $33 million or 6.0% of phase internet gross sales for the quarter.
  • Phase comparable gross sales decreased 5.0% within the third quarter. The Sally Magnificence companies within the U.S. and Canada represented 79% of phase internet gross sales for the quarter and had a comparable gross sales lower of 6.3%, primarily reflecting inflationary pressures that impacted client conduct and the lapping of final 12 months’s robust reopening demand.
  • On the finish of the quarter, internet retailer rely was 3,468.
  • Gross margin elevated by 60 foundation factors to 58.5% in comparison with the prior 12 months. The rise was primarily pushed by pricing leverage partially offset by increased distribution and freight prices.
  • GAAP working earnings had been $88.8 million in comparison with $116.8 million within the prior 12 months, representing a lower of 24.0%. GAAP working margin decreased to 16.1% in comparison with 19.4% within the prior 12 months.

Magnificence Techniques Group

  • Phase internet gross sales had been $409.7 million within the quarter, a lower of two.4% in comparison with the prior 12 months. The phase operated 6 fewer shops on the finish of the quarter in comparison with the prior 12 months and had an unfavorable influence of 30 foundation factors on reported gross sales from international forex translation.Phase e-commerce gross sales had been $48 million or 11.6% of phase internet gross sales for the quarter.
  • Phase comparable gross sales decreased 1.6% within the third quarter, primarily reflecting continued provide chain challenges and the lapping of final 12 months’s robust reopening demand.
  • On the finish of the quarter, internet retailer rely was 1,361.
  • Gross margin elevated 150 foundation factors to 40.9% within the quarter in comparison with the prior 12 months, pushed primarily by pricing leverage partially offset by increased distribution and freight prices.
  • GAAP working earnings had been $56.1 million within the quarter, a rise of 1.5% in comparison with $55.3 million within the prior 12 months. GAAP working margin within the quarter was 13.7% in comparison with 13.2% within the prior 12 months.
  • On the finish of the quarter, there have been 700 distributor gross sales consultants in comparison with 724 within the prior 12 months.

Fiscal 12 months 2022 Steerage

The Firm is updating its full 12 months steerage to replicate continued inflationary pressures and the unfavorable influence from international forex trade charges. For full 12 months fiscal 2022, the Firm is offering the next steerage:

  • Web gross sales are anticipated to say no by roughly 2% in comparison with the prior 12 months. This contains an unfavorable influence from international forex trade charges of roughly 70 foundation factors on full 12 months steerage and displays incremental influence within the third quarter and anticipated influence within the fourth quarter in comparison with prior internet gross sales steerage;
  • Web retailer rely is anticipated to lower by 90 shops, reflecting the Firm’s give attention to optimizing its retailer portfolio;
  • GAAP gross margin is anticipated to increase by roughly 70 foundation factors in comparison with the prior 12 months;
  • Adjusted Gross Margin is anticipated to increase by roughly 50 foundation factors in comparison with the prior 12 months;
  • GAAP working margin is anticipated to be roughly 10.3%; and
  • Adjusted Working Margin is anticipated to be roughly 10.5%.

Convention Name and The place You Can Discover Further Info

The Firm will maintain a convention name and audio webcast right this moment to debate its monetary outcomes and its enterprise at roughly 7:30 a.m. Central Time right this moment, August 4, 2022. Throughout the convention name, the Firm could focus on and reply a number of questions regarding enterprise and monetary issues and developments affecting the Firm. The Firm’s responses to those questions, in addition to different issues mentioned through the convention name, could include or represent materials info that has not been beforehand disclosed. Simultaneous to the convention name, an audio webcast of the decision will probably be out there through a hyperlink on the Firm’s web site, sallybeautyholdings.com/investor-relations. The convention name might be accessed by dialing (844) 867-6169 (Worldwide: (409) 207-6975) and referencing the entry code 3091820#. The teleconference will probably be held in a “listen-only” mode for all members apart from the Firm’s present sell-side and buy-side funding professionals. As well as, a supplemental slide presentation could also be considered through the name on the following hyperlink SBH Q3 Earnings Presentation and getting into the occasion password K74WrAU6Mnz. A replay of the earnings convention name will probably be out there beginning at 10:30 a.m. Central Time, August 4, 2022, by means of August 18, 2022, by dialing (866) 207-1041 (Worldwide: (402) 970-0847) and referencing entry code 2354020#. Additionally, an internet site replay will probably be out there on sallybeautyholdings.com/investor-relations.

About Sally Magnificence Holdings, Inc.

Sally Magnificence Holdings, Inc. (NYSE: SBH), because the chief in skilled hair colour, sells and distributes skilled magnificence provides globally by means of its Sally Magnificence Provide and Magnificence Techniques Group companies. Sally Magnificence Provide shops provide as much as 7,000 merchandise for hair colour, hair care, nails, and skincare by means of proprietary manufacturers resembling Ion®, Generic Worth Merchandise®, Past the Zone® and Silk Parts® in addition to skilled strains resembling Wella®, Clairol®, OPI®, Conair® and L’Oreal®. Magnificence Techniques Group shops, branded as CosmoProf® or Armstrong McCall® shops, together with its outdoors gross sales consultants, promote as much as 10,000 professionally branded merchandise together with Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico® and Olaplex®, meant to be used in salons and for resale by salons to retail shoppers. For extra details about Sally Magnificence Holdings, Inc., please go to https://www.sallybeautyholdings.com/.

Cautionary Discover Relating to Ahead-Wanting Statements

Statements on this information launch and the schedules hereto which aren’t purely historic details or which rely upon future occasions could also be forward-looking statements throughout the that means of Part 27A of the Securities Act of 1933, as amended, and Part 21E of the Securities Change Act of 1934, as amended. Ahead-looking statements, as that time period is outlined within the Non-public Securities Litigation Reform Act of 1995, might be recognized by way of forward-looking terminology resembling “believes,” “initiatives,” “expects,” “can,” “could,” “estimates,” “ought to,” “plans,” “targets,” “intends,” “might,” “will,” “would,” “anticipates,” “potential,” “assured,” “optimistic,” or the unfavorable thereof, or different variations thereon, or comparable terminology, or by discussions of technique, aims, estimates, steerage, expectations and future plans. Ahead-looking statements may also be recognized by the truth that these statements don’t relate strictly to historic or present issues.

Readers are cautioned to not place undue reliance on forward-looking statements as such statements converse solely as of the date they had been made. Any forward-looking statements contain dangers and uncertainties that would trigger precise occasions or outcomes to vary materially from the occasions or outcomes described within the forward-looking statements, together with, however not restricted to, the dangers and uncertainties associated to COVID-19, and its persevering with influence on the financial system and people described in our filings with the Securities and Change Fee, together with our Annual Report on Type 10-Okay for the 12 months ended September 30, 2021. Consequently, all forward-looking statements on this launch are certified by the components, dangers and uncertainties contained therein. We assume no obligation to publicly replace or revise any forward-looking statements.

Use of Non-GAAP Monetary Measures

This information launch and the schedules hereto embody the next monetary measures that haven’t been calculated in accordance with accounting rules usually accepted in the USA, or GAAP, and are subsequently known as non-GAAP monetary measures: (1) Adjusted Gross Margin; (2) Adjusted Promoting, Common and Administrative Bills; (3) Adjusted EBITDA and EBITDA Margin; (4) Adjusted Working Earnings and Working Margin; (5) Adjusted Web Earnings; (6) Adjusted Diluted Web Earnings Per Share; and (7) Working Free Money Move. We now have offered definitions under for these non-GAAP monetary measures and have offered tables within the schedules hereto to reconcile these non-GAAP monetary measures to the comparable GAAP monetary measures.

Adjusted Gross Margin – We outline the measure Adjusted Gross Margin as GAAP gross margin excluding the write-down of COVID-19 associated private protecting gear stock for the related time durations as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Adjusted Promoting, Common and Administrative Bills – We outline the measure Adjusted Promoting, Common and Administrative Bills as GAAP promoting, common and administrative bills excluding COVID-19 internet bills and different changes for the related time durations as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Adjusted EBITDA and EBITDA Margin – We outline the measure Adjusted EBITDA as GAAP internet earnings earlier than depreciation and amortization, curiosity expense, earnings taxes, share-based compensation, prices associated to the Firm’s beforehand introduced restructuring plans, COVID-19 associated internet bills and different changes for the related time durations as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures. Adjusted EBITDA Margin is Adjusted EBITDA as a proportion of internet gross sales.

Adjusted Working Earnings and Working Margin – Adjusted working earnings are GAAP working earnings that exclude prices associated to the Firm’s beforehand introduced restructuring plans, internet bills associated to COVID-19 and different changes for the related time durations as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures. Adjusted Working Margin is Adjusted Working Earnings as a proportion of internet gross sales.

Adjusted Web Earnings – Adjusted internet earnings is GAAP internet earnings that exclude tax-effected prices associated to the Firm’s beforehand introduced restructuring plans, tax-effected internet bills associated to COVID-19, tax-effected bills associated to the loss on debt extinguishment, and tax-effected different changes for the related time durations as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Adjusted Diluted Web Earnings Per Share – Adjusted diluted internet earnings per share is GAAP diluted earnings per share that exclude tax-effected prices associated to the Firm’s beforehand introduced restructuring plans, tax-effected internet bills associated to COVID-19, tax-effected bills associated to the loss on debt extinguishment and tax-effected different changes for the related time durations as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Working Free Money Move – We outline the measure Working Free Money Move as GAAP internet money offered by working actions much less funds for capital expenditures (internet). We imagine Working Free Money Move is a vital liquidity measure that gives helpful info to traders about the amount of money generated from operations after taking into consideration funds for capital expenditures (internet).

We imagine that these non-GAAP monetary measures present priceless info relating to our earnings and enterprise developments by excluding particular objects that we imagine are usually not indicative of the continuing working outcomes of our companies; offering a helpful method for traders to make a comparability of our efficiency over time and in opposition to different firms in our business.

We now have offered these non-GAAP monetary measures as supplemental info to our GAAP monetary measures and imagine these non-GAAP measures present traders with further significant monetary info relating to our working efficiency and money flows. Our administration and Board of Administrators additionally use these non-GAAP measures as supplemental measures to judge our companies and the efficiency of administration, together with the dedication of performance-based compensation, to make working and strategic choices, and to allocate monetary sources. We imagine that these non-GAAP measures additionally present significant info for traders and securities analysts to judge our historic and potential monetary efficiency. These non-GAAP measures shouldn’t be thought-about an alternative to or superior to GAAP outcomes. Moreover, the non-GAAP measures offered by us will not be similar to equally titled measures of different firms.

Supplemental Schedules

 

 

Phase Info

1

Non-GAAP Monetary Measures Reconciliations

2-3

Non-GAAP Monetary Measures Reconciliations; Adjusted EBITDA and

 

Working Free Money Move

4

Retailer Depend and Comparable Gross sales

5

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In hundreds, besides per share information)
(Unaudited)
 
 
Three Months Ended June 30, 9 Months Ended June 30,

2022

2021

Share

Change

2022

2021

Share
Change
 
Web gross sales

$

961,467

 

$

1,022,387

 

(6.0

)%

$

2,853,105

 

$

2,884,737

 

(1.1

)%

Value of merchandise offered

 

471,259

 

 

507,981

 

(7.2

)%

 

1,397,436

 

 

1,432,378

 

(2.4

)%

Gross revenue

 

490,208

 

 

514,406

 

(4.7

)%

 

1,455,669

 

 

1,452,359

 

0.2

%

Promoting, common and administrative bills

 

390,961

 

 

386,481

 

1.2

%

 

1,156,082

 

 

1,143,738

 

1.1

%

Restructuring

 

44

 

 

508

 

(91.3

)%

 

1,143

 

 

1,371

 

(16.6

)%

Working earnings

 

99,203

 

 

127,417

 

(22.1

)%

 

298,444

 

 

307,250

 

(2.9

)%

Curiosity expense

 

35,977

 

 

23,452

 

53.4

%

 

76,113

 

 

73,313

 

3.8

%

Earnings earlier than provision for earnings taxes

 

63,226

 

 

103,965

 

(39.2

)%

 

222,331

 

 

233,937

 

(5.0

)%

Provision for earnings taxes

 

16,659

 

 

27,759

 

(40.0

)%

 

60,117

 

 

62,228

 

(3.4

)%

Web earnings

$

46,567

 

$

76,206

 

(38.9

)%

$

162,214

 

$

171,709

 

(5.5

)%

 
Earnings per share:
Primary

$

0.44

 

$

0.68

 

(35.3

)%

$

1.48

 

$

1.52

 

(2.6

)%

Diluted

$

0.43

 

$

0.66

 

(34.8

)%

$

1.46

 

$

1.50

 

(2.7

)%

 
Weighted common shares:
Primary

 

106,940

 

 

112,739

 

 

109,238

 

 

112,605

 

Diluted

 

108,526

 

 

114,927

 

 

110,907

 

 

114,274

 

Foundation Level
Change
Foundation Level
Change
Comparability as a proportion of internet gross sales
Consolidated gross margin

 

51.0

%

 

50.3

%

70

 

 

51.0

%

 

50.3

%

70

 

Promoting, common and administrative bills

 

40.7

%

 

37.8

%

290

 

 

40.5

%

 

39.6

%

90

 

Consolidated working margin

 

10.3

%

 

12.5

%

(220

)

 

10.5

%

 

10.7

%

(20

)

 
Efficient tax price

 

26.3

%

 

26.7

%

(40

)

 

27.0

%

 

26.6

%

40

 

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Stability Sheets
(In hundreds)
(Unaudited)
 
June 30,
2022
September 30,
2021
 
Money and money equivalents

$

101,318

$

400,959

Commerce and different accounts receivable

 

67,373

 

66,581

Stock

 

1,014,622

 

871,349

Different present property

 

59,806

 

44,686

Complete present property

 

1,243,119

 

1,383,575

Property and gear, internet

 

289,814

 

307,377

Working lease property

 

549,493

 

537,673

Goodwill and different intangible property

 

583,533

 

596,741

Different property

 

19,907

 

21,766

Complete property

$

2,685,866

$

2,847,132

 
Present maturities of long-term debt

$

167,169

$

194

Accounts payable

 

279,359

 

291,632

Accrued liabilities

 

165,996

 

206,155

Present working lease liabilities

 

159,452

 

156,234

Revenue taxes payable

 

2,985

 

10,666

Complete present liabilities

 

774,961

 

664,881

Lengthy-term debt, together with capital leases

 

1,083,924

 

1,382,530

Lengthy-term working lease liabilities

 

421,072

 

404,147

Different liabilities

 

16,781

 

29,056

Deferred earnings tax liabilities, internet

 

93,257

 

85,777

Complete liabilities

 

2,389,995

 

2,566,391

Complete stockholders’ fairness

 

295,871

 

280,741

Complete liabilities and stockholders’ fairness

$

2,685,866

$

2,847,132

Supplemental Schedule 1

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Phase Info
(In hundreds)
(Unaudited)
 
 
Three Months Ended June 30, 9 Months Ended June 30,

 

 

2022

2021

Share

Change

 

2022

2021

Share

Change

Web gross sales:
Sally Magnificence Provide (“SBS”)

$

551,725

 

$

602,681

 

(8.5

)%

$

1,639,040

 

$

1,693,015

 

(3.2

)%

Magnificence Techniques Group (“BSG”)

 

409,742

 

 

419,706

 

(2.4

)%

 

1,214,065

 

 

1,191,722

 

1.9

%

Complete internet gross sales

$

961,467

 

$

1,022,387

 

(6.0

)%

$

2,853,105

 

$

2,884,737

 

(1.1

)%

 
Working earnings:
SBS

$

88,792

 

$

116,784

 

(24.0

)%

$

270,355

 

$

311,975

 

(13.3

)%

BSG

 

56,067

 

 

55,265

 

1.5

%

 

160,621

 

 

151,680

 

5.9

%

Phase working earnings

 

144,859

 

 

172,049

 

(15.8

)%

 

430,976

 

 

463,655

 

(7.0

)%

 
Unallocated bills (1)

 

45,612

 

 

44,124

 

3.4

%

 

131,389

 

 

155,034

 

(15.3

)%

Restructuring

 

44

 

 

508

 

(91.3

)%

 

1,143

 

 

1,371

 

(16.6

)%

Curiosity expense

 

35,977

 

 

23,452

 

53.4

%

 

76,113

 

 

73,313

 

3.8

%

Earnings earlier than provision for earnings taxes

$

63,226

 

$

103,965

 

(39.2

)%

$

222,331

 

$

233,937

 

(5.0

)%

 
 
Phase gross margin:

2022

2021

Foundation Level
Change

2022

2021

Foundation Level
Change
SBS

 

58.5

%

 

57.9

%

60

 

 

58.6

%

 

58.0

%

60

 

BSG

 

40.9

%

 

39.4

%

150

 

 

40.8

%

 

39.5

%

130

 

 
Phase working margin:
SBS

 

16.1

%

 

19.4

%

(330

)

 

16.5

%

 

18.4

%

(190

)

BSG

 

13.7

%

 

13.2

%

50

 

 

13.2

%

 

12.7

%

50

 

Consolidated working margin

 

10.3

%

 

12.5

%

(220

)

 

10.5

%

 

10.7

%

(20

)

 
(1) Unallocated bills, together with share-based compensation expense, include company and shared prices and are included in promoting, common and administrative bills.

Supplemental Schedule 2

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Monetary Measures Reconciliations
(In hundreds, besides per share information)
(Unaudited)
 
 
Three Months Ended June 30, 2022
As Reported
(GAAP)
COVID-19 (1) Restructuring(2) Loss on Debt
Extinguishment (3)
As Adjusted
(Non-GAAP)
 
Value of merchandise offered

$

471,259

 

$

 

$

 

$

$

471,259

 

Consolidated gross margin

 

51.0

%

 

51.0

%

Promoting, common and administrative bills

 

390,961

 

 

(1,304

)

 

 

 

 

389,657

 

SG&A bills, as a proportion of gross sales

 

40.7

%

 

40.5

%

Working earnings

 

99,203

 

 

1,304

 

 

44

 

 

 

100,551

 

Working margin

 

10.3

%

 

10.5

%

Earnings earlier than provision for earnings taxes

 

63,226

 

 

1,304

 

 

44

 

 

16,439

 

81,013

 

Provision for earnings taxes (4)

 

16,659

 

 

335

 

 

(25

)

 

4,225

 

21,194

 

Web earnings

$

46,567

 

$

969

 

$

69

 

$

12,214

$

59,819

 

 
Earnings per share:
Primary

$

0.44

 

$

0.01

 

$

0.00

 

$

0.11

$

0.56

 

Diluted

$

0.43

 

$

0.01

 

$

0.00

 

$

0.11

$

0.55

 

 
Three Months Ended June 30, 2021
As Reported
(GAAP)
COVID-19 (1) Restructuring (2) As Adjusted
(Non-GAAP)
 
Value of merchandise offered

$

507,981

 

$

 

$

 

$

507,981

 

Consolidated gross margin

 

50.3

%

 

50.3

%

Promoting, common and administrative bills

 

386,481

 

 

(824

)

 

 

 

385,657

 

SG&A bills, as a proportion of gross sales

 

37.8

%

 

37.7

%

Working earnings

 

127,417

 

 

824

 

 

508

 

 

128,749

 

Working margin

 

12.5

%

 

12.6

%

Earnings earlier than provision for earnings taxes

 

103,965

 

 

824

 

 

508

 

 

105,297

 

Provision for earnings taxes (4)

 

27,759

 

 

(550

)

 

86

 

 

27,295

 

Web earnings

$

76,206

 

$

1,374

 

$

422

 

$

78,002

 

 
Earnings per share:
Primary

$

0.68

 

$

0.01

 

$

0.00

 

$

0.69

 

Diluted

$

0.66

 

$

0.01

 

$

0.00

 

$

0.68

 

 
(1) For the three months ended June 30, 2022, COVID-19-related expense is comprised of disposal prices for out of date personal-protective gear stock (“PPE”). For the three months ended June 30, 2021, COVID-19 bills primarily represents donation expense associated to the personal-protective gear stock of $1.9 million, partially offset by wage and lease subsidies offered by the Canadian authorities of $1.1 million.
 
(2) For 3 months ended June 30, 2022, restructuring represents prices and bills incurred primarily in reference to the Transformation Plan. For the three months ended June 30, 2021, restructuring represents prices and bills incurred primarily in reference to the Transformation Plan and Mission Surge.
 
(3) For 3 months ended June 30, 2022, loss on debt extinguishment pertains to the reimbursement of our 8.750% Senior Secured Second Lien Notes due 2025, which included a redemption premium of $13.1 million and the write-off of unamortized deferred financing prices of $3.3 million included in curiosity expense.
 
(4) The supply for earnings taxes was calculated utilizing the relevant tax charges for every nation, whereas excluding the tax advantages for international locations the place the tax profit isn’t at present deemed possible of being realized.

Supplemental Schedule 3

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Monetary Measures Reconciliations, Continued
(In hundreds, besides per share information)
(Unaudited)
 
 
9 Months Ended June 30, 2022
As Reported COVID-19 (1) Restructuring and
different (2)
Loss on Debt
Extinguishment (3)
As Adjusted
(Non-GAAP)
 
Value of merchandise offered

$

1,397,436

 

$

(2,841

)

$

 

$

$

1,394,595

 

Consolidated gross margin

 

51.0

%

 

51.1

%

Promoting, common and administrative bills

 

1,156,082

 

 

(3,382

)

 

(1,546

)

 

 

1,151,154

 

SG&A bills, as a proportion of gross sales

 

40.5

%

 

40.3

%

Working earnings

 

298,444

 

 

6,223

 

 

2,689

 

 

 

307,356

 

Working margin

 

10.5

%

 

10.8

%

Earnings earlier than provision for earnings taxes

 

222,331

 

 

6,223

 

 

2,689

 

 

16,439

 

247,682

 

Provision for earnings taxes (4)

 

60,117

 

 

1,728

 

 

(1,829

)

 

4,225

 

64,241

 

Web earnings

$

162,214

 

$

4,495

 

$

4,518

 

$

12,214

$

183,441

 

 
Earnings per share:
Primary

$

1.48

 

$

0.04

 

$

0.04

 

$

0.11

$

1.68

 

Diluted

$

1.46

 

$

0.04

 

$

0.04

 

$

0.11

$

1.65

 

 
9 Months Ended June 30, 2021
As Reported COVID-19 (1) Restructuring (2) As Adjusted
(Non-GAAP)
 
Value of merchandise offered

$

1,432,378

 

$

(6,957

)

$

 

$

1,425,421

 

Consolidated gross margin

 

50.3

%

 

50.6

%

Promoting, common and administrative bills

 

1,143,738

 

 

(29,753

)

 

 

 

1,113,985

 

SG&A bills, as a proportion of gross sales

 

39.6

%

 

38.6

%

Working earnings

 

307,250

 

 

36,710

 

 

1,371

 

 

345,331

 

Working margin

 

10.7

%

 

12.0

%

Earnings earlier than provision for earnings taxes

 

233,937

 

 

36,710

 

 

1,371

 

 

272,018

 

Provision for earnings taxes (4)

 

62,228

 

 

8,648

 

 

263

 

 

71,139

 

Web earnings

$

171,709

 

$

28,062

 

$

1,108

 

$

200,879

 

 
Earnings per share:
Primary

$

1.52

 

$

0.25

 

$

0.01

 

$

1.78

 

Diluted

$

1.50

 

$

0.25

 

$

0.01

 

$

1.76

 

 
(1) For the 9 months ended June 30, 2022, COVID-19-related expense is comprised of out of date PPE included in prices of merchandise offered of $2.8 million in addition to prices related to the disposal of the out of date PPE, vaccinations and testing in promoting, common and administrative bills. For the 9 months ended June 30, 2021, COVID-19 bills comprised of a write-down of $7.0 million for PPE in prices of merchandise offered and $33.0 million in promoting, common and administrative bills associated to donation expense in reference to the PPE, partially offset by wage and lease subsidies offered by the Canadian authorities of $3.3 million.
 
(2) For the 9 months ended June 30, 2022, restructuring and different represents prices and bills incurred primarily in reference to the Transformation Plan and cancelled debt providing through the interval. For the 9 months ended June 30, 2021, restructuring represents prices and bills incurred primarily in reference to the Transformation Plan and Mission Surge.
 
(3) For the 9 months ended June 30, 2022, loss on debt extinquishment pertains to the reimbursement of our 8.750% Senior Secured Second Lien Notes due 2025.
 
(4) The supply for earnings taxes was calculated utilizing the relevant tax charges for every nation, whereas excluding the tax advantages for international locations the place the tax profit isn’t at present deemed possible of being realized. Moreover, for the 9 months ended June 30, 2022, provision for earnings taxes contains the influence of a deferred tax asset write-down associated to expired choices in reference to the Transformation Plan.
Supplemental Schedule 4
 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Monetary Measures Reconciliations, Continued
(In hundreds)
(Unaudited)
 
 
Three Months Ended June 30, 9 Months Ended June 30,
Adjusted EBITDA:

2022

2021

Share
Change

2022

2021

Share
Change
 
Web earnings

$

46,567

 

$

76,206

 

(38.9

)%

$

162,214

 

$

171,709

 

(5.5

)%

Add:
Depreciation and amortization

 

24,890

 

 

25,145

 

(1.0

)%

 

73,361

 

 

78,090

 

(6.1

)%

Curiosity expense

 

35,977

 

 

23,452

 

53.4

%

 

76,113

 

 

73,313

 

3.8

%

Provision for earnings taxes

 

16,659

 

 

27,759

 

(40.0

)%

 

60,117

 

 

62,228

 

(3.4

)%

EBITDA (non-GAAP)

 

124,093

 

 

152,562

 

(18.7

)%

 

371,805

 

 

385,340

 

(3.5

)%

Share-based compensation

 

2,876

 

 

2,617

 

9.9

%

 

8,866

 

 

8,158

 

8.7

%

Restructuring and different

 

44

 

 

508

 

(91.3

)%

 

2,689

 

 

1,371

 

96.1

%

COVID-19

 

1,304

 

 

824

 

58.3

%

 

6,223

 

 

36,710

 

(83.0

)%

Adjusted EBITDA (non-GAAP)

$

128,317

 

$

156,511

 

(18.0

)%

$

389,583

 

$

431,579

 

(9.7

)%

 
Foundation Level
Change
Foundation Level
Change
Adjusted EBITDA as a proportion of internet gross sales
Adjusted EBITDA margin

 

13.3

%

 

15.3

%

(200

)

 

13.7

%

 

15.0

%

(130

)

 
 
Working Free Money Move:

2022

2021

Share
Change

2022

2021

Share
Change
Web money offered by working actions

$

52,000

 

$

86,172

 

(39.7

)%

$

49,227

 

$

217,728

 

(77.4

)%

Much less:
Funds for property and gear, internet

 

23,125

 

 

17,804

 

29.9

%

 

67,234

 

 

44,899

 

49.7

%

Working free money movement (non-GAAP)

$

28,875

 

$

68,368

 

(57.8

)%

$

(18,007

)

$

172,829

 

(110.4

)%

Supplemental Schedule 5

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Retailer Depend and Comparable Gross sales
(Unaudited)
 
 
As of June 30,

2022

2021

Change
 
Variety of shops:
SBS:
Firm-operated shops

3,467

3,603

(136

)

Franchise shops

1

8

(7

)

Complete SBS

3,468

3,611

(143

)

BSG:
Firm-operated shops

1,229

1,234

(5

)

Franchise shops

132

133

(1

)

Complete BSG

1,361

1,367

(6

)

Complete consolidated

4,829

4,978

(149

)

 
Variety of BSG distributor gross sales consultants

700

724

(24

)

 
BSG distributor gross sales consultants (DSC) embody 187 and 191 gross sales consultants employed by our franchisees at June 30, 2022 and 2021, respectively.
Three Months Ended June 30, 9 Months Ended June 30,

2022

2021

 

Foundation Level
Change

2022

2021

Foundation Level
Change
Comparable gross sales development (decline):
SBS

(5.0

)%

43.1

%

(4,810

)

(0.5

)%

11.8

%

(1,235

)

BSG

(1.6

)%

43.0

%

(4,455

)

2.6

%

12.0

%

(941

)

Consolidated

(3.6

)%

43.1

%

(4,670

)

0.8

%

11.9

%

(1,110

)

 
Our comparable gross sales embody gross sales from shops which have been working for 14 months or longer as of the final day of a month and e-commerce income. Moreover, our comparable gross sales embody gross sales to franchisees and full service gross sales. Our comparable gross sales excludes the impact of modifications in international trade charges and gross sales from shops relocated till 14 months after the relocation. Income from acquisitions are excluded from our comparable gross sales calculation till 14 months after the acquisition.

 

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