The third quarter saw Sally Beauty beat analyst estimates with earnings up year over year on a slight drop in comparable sales.
Net earnings were $45.7 million, or 44 cents per diluted share, versus $37.7 million, or 36 per diluted share, in the year-before quarter. Adjusted for one time charges, net earnings were $52.4 million, or 51 cents per diluted share, versus $48.1 million, or 45 cents per diluted share, in the period a year previous.
Analysts polled by Zacks Investment Research on average expected earnings per adjusted diluted share of 42 cents and revenues of $933.2 million.
Third quarter consolidated comparable sales decreased 0.4%, the company reported, while net sales were down 1% to $933.3 million year over year. Sally Beauty operated 35 fewer stores at the end of the period compared to the previous year.
Operating earnings were $78.2 million versus $71.8 million in the year-earlier quarter, while adjusted operating earnings were $86.1 million versus $84.1 million.
In segment sales for the quarter, Sally Beauty Supply net sales were $526.8 million, down 1.8% year over year, with comparable sales slipping 1.1% while Beauty Systems Group net sales were $406.5 million, up 0.2% year over year, with comps gaining 0.5%.
In updating full-year financial guidance, Sally Beauty stated it expects comps to be approximately flat versus the previous assessment of flat to down 1% with consolidated net sales coming in about 75 basis points lower than comparable sales due to the expected unfavorable impact from foreign exchange rates on full-year net sales and operating approximately 30 fewer stores versus the year past. The company now anticipates adjusted operating margin to fall in the range of 8.6% to 8.7% versus 8% to 8.5% previously.
“Our third-quarter results, including improved top-line trends and solid year-over-year growth in operating profit, showcase the resilience of our business and the customer service focus of our team,” said Denise Paulonis, Sally Beauty president and CEO. “Ongoing financial rigor, coupled with our fuel-for-growth initiative, drove double-digit earnings per share growth and a fourth consecutive quarter of adjusted operating margin expansion. Importantly, our talented teams are continuing to advance our strategic pillars against a complex macro backdrop. Given the strength of our third quarter, we are raising our adjusted operating margin guidance for full year fiscal 2025.”
