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Sally Beauty has recently released its second quarter results for 2018. The report indicated an earnings rise while the company suffered from margin losses.  

The earnings per share of the company during the period recorded a data of $0.49 compared to last year’s $0.40. This reportedly rooted from the lower income tax expense as a result of U.S. tax reform.

“Although we delivered sequential improvement in same store sales and sustained growth in our Sally e-commerce business, traffic trends in our Sally Beauty stores in the U.S. continued to be a challenge,” President and Chief Executive Officer  Chris Brickman, told reports. “A slight increase in consolidated net sales was offset by a modest decline in gross margin and higher selling, general and administrative expenses due primarily to unfavorable foreign exchange translation and operating expenses from our recent Canadian acquisition.

Yet, Brickman added that the U.S. tax reform, lower interest expense and a lower share count helped during the period by generating a strong double digit growth in both reported and adjusted diluted earnings per share. Additionally, he added that the operations continue to create extensive operating free cash flow. This figures for this revealed a growth of 22.3% in a year over year basis to to $59.1 million.

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Sally Beauty is the world's largest retailer of salon-quality hair color, hair care, nails, salon, and beauty supplies. 

“We continue to make progress on strategic initiatives focused on driving long-term growth and intensifying our focus on our defensible core categories - hair color and hair care. During the quarter, we completed the distribution center investments that allow Sally e-commerce orders to be shipped in two days or less to almost all U.S. households and we began marketing that capability late in the quarter. To further strengthen our hair color offerings in Sally stores, we successfully completed the nationwide launch of two new color lines - Wella ColorCharm Paints and Arctic Fox. “

Furthermore, the company’s consolidated net sales saw a $975.3 million increase during the second quarter. This is a 0.9% growth from last year’s data. As for the sales from the same store sector, the figures noted a decline of 1.4% during the period.

“Additionally, we completed the testing and refinement of the new Sally loyalty program and we are preparing to launch the new program nationally before the end of the fiscal year. We also finalized the majority of the initiatives outlined in the international portion of our 2018 Restructuring Plan, with the goals of reducing our European cost base and better leveraging our global scale. And, lastly, we repriced our $548.6 million floating rate term loan, reducing the interest rate spread by 0.25%, thus lowering our future cash interest expense.”

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