Sally Beauty Numbers Dip as Turnaround Efforts Continue

Sally Beauty Holdings posted a slight dip in sales for the quarter ended Dec. 31.
The business posted a 0.6 percent dip in net sales, to $989.5 million, with a 21 percent dip in earnings, to $65.7 million. Diluted earnings per share were 54 cents, down nearly 17 percent year-over-year.
Sally Beauty is in the midst of a turnaround process under chief executive officer and president Chris Brickman, who said the company was "making steady progress."
"Our North American retail business, within Sally Beauty Supply, has been leading the charge with respect to our refocus on color and care, our pricing and promotional changes, our new loyalty program and other elements of our owned brand, new product and store execution change agenda," Brickman said. "As a result the business had improved holiday performance on both the top and bottom line."
The company is working to modernize its supply chain to reduce out-of-stocks, optimize inventory levels and reduce costs. As part of that plan, Sally is closing two distribution facilities — one in Denton, Texas, and another in Anchorage, Alaska. Later this year, the company plans to close a distribution center in Lincoln, Neb. Sally is looking for a 500,000 square-foot facility in Texas to construct an automated distribution facility.
Sally has continued to build up its loyalty program in recent months, as has reached 14 million active members. Owned and exclusive brands are also an increasingly important part of the in-store assortment, accounting for 46 percent of total sales at Sally and 53 percent of sales for the Beauty Systems Group.
The company has continued to build out its hair assortment, launching the Pravana hair color and care line, as well as expanding Guy Tang's #mydentity brand into hair care. The retailer also stocked a reformulated Wella Kolestone Perfect hair color line. As of Feb. 4, Sally also became the first retailer to sell The Mane Choice's first-ever general market collection. According to the Mane Choice, that makes founder and ceo Courtney Adeleye the first African American woman to have a complete collection in Sally Beauty's 'general market' lineup, versus the multicultural shelves. The Mane Choice, a growing multicultural hair brand, generally does specific hair collections for its retail partners.
As part of the next phase of Sally's turnaround, the company expects to deploy an updated e-commerce and mobile app, complete testing on an Oracle-based point-of-sale system, and continue to launch exclusive brands and influencer-partner brands.
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