Sally Beauty Holdings is rebounding from the COVID-19 pandemic, advancing comparable sales in the United States and Canada and turning to profits in the third quarter.
For the quarter ended June 30, Sally Beauty posted net earnings of $76.2 million, or 66 cents per diluted share, versus a net loss of $23.5 million, or 21 cents per diluted share, in the year-earlier period.
Adjusted for one-time changes net earnings were $78 million, or 68 cents per diluted share, compared to a net loss of $12.7 million, or 11 cents per diluted share, in the prior-year quarter.
Sally Beauty topped a MarketBeat-published analyst average estimate of 62 cents per adjusted diluted share.
Comparable sales increased 44.7% from the year-previous quarter, Sally Beauty reported, primarily driven by strong consumer demand in the United States and the easing of COVID-19 restrictions globally. Consolidated net sales were $1.02 billion, an increase of 45% from the year-before period. Foreign currency transactions had a favorable impact of 260 basis points on reported sales.
Sally Beauty pointed out that it operated 84 fewer stores in the 2021 third quarter compared to the period earlier. In addition, the company indicated, worldwide e-commerce sales came in at $71 million, representing 7% of net sales. Chris Brickman, Sally Beauty president and CEO, said in a third-quarter conference call, that enterprise-wide, the company is providing customers with a robust omnichannel experience and sees digital as an important growth driver. As it scales and optimizes omnichannel services, he said Sally Beauty anticipates e-commerce growing to 15% of sales over the next few years.
In the U.S. and Canada, the company’s consumer-focused Sally Beauty Supply segment fulfilled 43% of e-commerce sales from stores, Brickman said. By online, pick up in-store continues to gain traction and comprised 22% of Sally Beauty U.S. and Canada e-commerce sales in the third quarter, Brickman said, up from 20% in the second quarter and 11% from the first quarter. The company has started testing rapid delivery at Sally Beauty U.S. and Canada, which will fully roll out over the next one to two quarters, he added.
We remain focused on the completion of our multi-year transformation in 2021, and as we enter 2022, we will continue to scale and optimize a full suite of omnichannel services designed to delight our customers. We believe that with the significant investments we have made in the business and the talented team we have assembled, the company is well-positioned to achieve long-term growth.
-Chris Brickman, President and CEO, Sally Beauty
Sally Beauty Supply segment comps increased 43.3% globally in the third quarter year over year, the company noted, while sales came in $602.7 million versus $415.5 million in the 2020 period. The Sally Beauty businesses in the U.S. and Canada represented 79% of the segment sales for the quarter and had a comp gain of 35.2% from the 2020 period. Both Europe and Latin America had significant comp increases for the quarter due to the easing of COVID-19 restrictions.
Improving consumer confidence in the U.S. and the easing of COVID-19 restrictions across international territories drove the segment net sales gain of 45.1% over the year-past period, according to Sally Beauty. The segment got a boost of 370 basis points from foreign currency translation on reported sales and operated 80 fewer stores compared to the prior year. Net revenues in the professional and wholesale-focused Beauty Systems Group were $419.7 million in the quarter, up 44.8% from the 2020 period.
Company operating earnings were $127.4 million versus $1.4 million in the 2020 third quarter and adjusted operating earnings, excluding effects of restructuring and COVID-19 related expenses, increased to $128.7 million from $16 million year over year, Sally Beauty stated.
In announcing the financial results, Brickman said, “We remain focused on the completion of our multi-year transformation in 2021, and as we enter 2022, we will continue to scale and optimize a full suite of omnichannel services designed to delight our customers. We believe that with the significant investments we have made in the business and the talented team we have assembled, the company is well-positioned to achieve long-term growth.”
