Denton, Texas – Sally Beauty Holdings reported declining net earnings in the second quarter of fiscal 2014 compared to the second quarter of the previous fiscal year. Net income fell 9.9% to $58.9 million, from $64.89 million.
Net sales fared better, rising 2.4% to $919.47 million from $898.24 million. Same-store sales grew 1%. Higher selling, general and administrative expenses, as well as charges related to a previously disclosed data security breach, impacted net earnings. Sally Beauty also cited weather as negatively impacting sales.
“Overall performance was solid with positive consolidated same store sales growth of 1%, sales growth of 2.4% and 10 bps of gross margin expansion,” said Gary Winterhalter, chairman, president and CEO. “Extremely unfavorable weather in the U.S. resulted in 5,426 store days closed in the fiscal 2014 second quarter versus 1,328 in the prior year, resulting in lower traffic and sales growth in the U.S. Sally and CosmoProf stores. The good news is that we saw positive traffic performance in the regions that were not materially impacted by store closures which gives me confidence that we are on the right track to improve retail traffic in the Sally U.S. stores.”
In addition, Sally Beauty named Christian A. Brickman, 49 as the company’s new president and COO effective June 2, 2014. At the request of the board, Gary Winterhalter, the company’s current chairman, CEO and president, will continue his current roles as chairman and CEO through April 30, 2015 or another date as the board may determine, and will to facilitate a transition of the CEO post to Brickman during this period.