Sally Beauty Q4 earnings beat Street, sales fall
Despite driving strong digital sales and earnings in the fourth quarter, Sally Beauty ended its fiscal year with lagging same-store sales.
For the quarter ended Sept. 30, Sally Beauty’s revenue was$965.99 million, missing Zacks analysts estimates of $968.1 million. Earnings per share hit 51 cents, which was 3 cents higher than the analyst estimates of 48 cents. Adjusted earnings before interest, tax, depreciation and amortization fell by 5.7% to $141.9 million, as adjusted EBITDA margin dropped 70 basis points to 14.7% from the same period a year earlier.
The company’s net earnings rose 54.5% to $55.2 million. Sally Beauty’s same-store sales dropped by 0.2%, however global digital sales rose by 30.1% compared to the prior year.
For the year, earnings were $426.6 million, and sales were $3.93 billion, a decrease of 0.1%. Same-store sales declined 1.5%.
“As our quarterly results demonstrate, we are making solid progress on our transformation plan,” said Chris Brickman, president and CEO.
“We are playing to win by re-focusing our business around our differentiated core of hair color and care, improving our execution of basic retail fundamentals and advancing our digital commerce capabilities,” Brickman said. “We are continuing to drive costs out of the business, which is enabling investment in our transformation. We recognize that we still have work to do. With our key accomplishments from the quarter and the recent management changes we have implemented, we are confident that we are moving in the right direction.”
Looking ahead to 2019, the company expects full year consolidated same-store sales to be approximately flat, and full year adjusted earnings are expected to decline slightly as compared to the prior year. This will be driven primarily by an improvement in same-store sales offset by the slightly higher adjusted selling, general and administrative expenses. The outlook is also based on key investments being made to drive long-term growth, and benefits of cost-savings initiatives already underway that are expected to offset the majority of investments.
American Eagle invests in hot online company
American Eagle Outfitters is taking its partnership with Dormify to a new level.
The teen retailer is the lead investor in a $3.45 million Series A investment in Dormify. The online retailer that caters to college and dorm supplies plans to use the investment to scale talent, expand pop-up locations, and enhance the online experience for their customers.
Specifically, Dormify plans to use the funding to create an even more personalized online shopping experience. Dormify also plans to launch additional pop-up locations in the spring of 2019 to coincide with the excitement of college decision day.
Dormify’s first three pop-up stores opened in May in New York City, Chicago, and Washington, D.C. Each store enabled customers to explore merchandise and styling ideas before making a purchase, as well as order merchandise in-store, and have items shipped directly to their dorm.
In addition to these ventures, the retailer will continue to scale its “Dormifam” on-campus ambassador program, a move that will enable the company to stay engaged with its devoted college following, according to the company.
The deal is an extension of an existing relationship between the two companies. In addition to co-developing bedding sets with Dormify, American Eagle sells the collections online and at its Union Square store in New York City.
“We are thrilled to have the support of AEO as Dormify continues to build the ultimate destination for college and small spaces,” said Amanda Zuckerman, Dormify’s co-founder and creative director. “This investment will allow us to continue to make our mark within the back-to-college industry, and through our strong partnership with American Eagle, Dormify will have the opportunity to connect with even more students across the country.”
Private brand joins an exclusive club at Target
Target Corp.’s decision to focus on owned and exclusive brands seems to be resonating with shoppers.
The discounter said that its A New Day apparel brand, which just celebrated its first anniversary, has reached an impressive milestone: $1 billion in sales. The label has become Target’s most expansive owned-brand across women’s apparel and accessories, with a continuous roll out of new styles. It joins other billion-dollar Target owned brands Cat & Jack, Threshold. Up & Up, Market Pantry and Room Essentials.
“A New Day is the foundation of our women’s apparel and accessories assortment, and we’re pleased with the love we’ve built in just one year — but we’re not stopping there,” said Mark Tritton, Target’s executive VP and chief merchandising officer. We’re continuing to refine our offerings to bring guests the quality, value and style they’ve come to expect from only-at-Target brands.”