Sally Beauty Holdings (SBH) Q3 2024 earnings summary

Executive summary

• Net sales for the quarter ended June 30, 2024, increased 1.2% year-over-year to $942.3 million, with comparable sales up 1.5%, exceeding guidance.

• Both Sally Beauty and Beauty Systems Group segments posted positive comparable sales, with BSG delivering its third consecutive quarter of growth.

• Global e-commerce sales reached $92 million, 9.7% of net sales.

• Cash flow from operations was $48 million, with $10 million used for share repurchases.

• Full-year fiscal 2024 guidance was maintained, reflecting confidence in continued momentum and stable market conditions.

Financial highlights

• GAAP and adjusted gross margin were 51.0%, up 10 bps year-over-year, driven by supply chain efficiencies.

• Adjusted operating margin reached 8.9%, above guidance; adjusted EBITDA margin was 12.4%.

• Adjusted diluted EPS was $0.45 for the quarter; GAAP EPS was $0.36.

• Operating cash flow was $48 million, with $29 million in free cash flow.

• 900,000 shares repurchased for $10 million during the quarter.

Outlook and guidance

• Full-year net sales and comparable sales expected to be approximately flat.

• Full-year gross margin guided at 50.5%-51%, with adjusted operating margin around 8.5%.

• Q4 net sales growth expected at 1%-2%, with operating margin around 9%.

• Operating cash flow for the year projected at $240 million; capex at $100 million.

• $10 million in share repurchases planned for Q4.