Sally Magnificence Holdings Studies Fourth Quarter and Full Yr Fiscal 2022 Outcomes

Sally Magnificence Holdings Studies Fourth Quarter and Full Yr Fiscal 2022 Outcomes

DENTON, Texas–(BUSINESS WIRE)–Sally Magnificence Holdings, Inc. (NYSE: SBH) (“the Firm”), the chief in skilled hair coloration, as we speak introduced monetary outcomes for its fourth quarter and full 12 months ended September 30, 2022. The Firm will maintain a convention name as we speak at 7:30 a.m. Central Time to debate these outcomes and its enterprise.

Fiscal 2022 Fourth Quarter Abstract

  • Consolidated internet gross sales of $962 million, a lower of two.8%, with comparable gross sales flat to the prior 12 months;
  • World e-commerce gross sales of $90 million, representing 9.3% of internet gross sales;
  • GAAP gross margin decreased 240 foundation factors to 48.2%, pushed primarily by a non-cash stock write-down of $19.4 million associated to the distribution heart consolidation and retailer optimization plan; Adjusted Gross Margin decreased 60 foundation factors to 50.1%;
  • GAAP working earnings of $39 million and GAAP working margin of 4.1%, Adjusted Working Earnings of $84 million and Adjusted Working Margin of 8.7%; and
  • GAAP diluted internet earnings per share of $0.20 and Adjusted Diluted Web Earnings Per Share of $0.50.

Fiscal 2022 Full Yr Abstract

  • Consolidated internet gross sales of $3.82 billion, a lower of 1.5%, with a comparable gross sales enhance of 0.6%;
  • World e-commerce gross sales had been $333 million, representing 8.7% of internet gross sales;
  • GAAP gross margin decreased 10 foundation factors to 50.3% and Adjusted Gross Margin expanded 30 foundation factors to 50.9%;
  • GAAP working earnings of $338 million and GAAP working margin of 8.8%, Adjusted Working Earnings of $391 million and Adjusted Working Margin of 10.3%;
  • GAAP diluted internet earnings per share of $1.66 and Adjusted Diluted Web Earnings Per Share of $2.16; and
  • Repurchased 6.8 million shares at an mixture price of $130.3 million and accomplished full reimbursement of $300 million of 8.75% senior secured notes.

In fiscal 2022, we delivered internet gross sales of $3.8 billion, gross margins above 50% and adjusted EBITDA of greater than $500 million amidst a extremely dynamic and difficult macro surroundings,” stated Denise Paulonis, president and chief govt officer. “Our groups executed nicely, navigating inflationary pressures and provide chain headwinds, whereas remaining centered on serving our clients.”

As we flip to fiscal 2023, the groups will proceed to leverage the omni-channel capabilities and fashionable retail infrastructure we now have constructed. Moreover, we will probably be executing towards three strategic initiatives that may function the inspiration for us to encourage a extra colourful, assured and welcoming world. We’ll improve our buyer centricity, together with an expanded companies ecosystem to assist our skilled stylists and elevated training and experience to encourage and assist all clients; develop our Sally portfolio of excessive margin owned manufacturers and amplify innovation; and enhance the effectivity of our operations. Furthermore, we can even advance our ESG and our range, inclusion and belonging commitments. These strategic initiatives are designed to construct upon our core strengths in hair coloration and care, and drive long-term monetary efficiency and shareholder worth.”

Distribution Middle Consolidation and Retailer Optimization Plan

Over the past a number of quarters, the Firm has been piloting retailer closures in numerous markets with the aim of maximizing the worth of its massive retailer portfolio and offering a seamless omni-channel expertise to its clients. Primarily based on constructive gross sales recapture charges and improved profitability inside these markets, the Firm is accelerating its retailer optimization plan, together with the closure of roughly 350 shops with the bulk closing in December 2022. Many of the retailer closings will probably be Sally Magnificence areas within the U.S. As well as, the Firm can even be optimizing its provide chain by closing two small distribution facilities in Oregon and Pennsylvania and transferring the volumes to bigger distribution facilities, efficient in December 2022. As a part of this optimization plan, the Firm incurred a $45.5 million cost within the fourth quarter of 2022, which features a $19.4 million non-cash stock write-down. The expense financial savings from this optimization plan is predicted to be roughly $50 million with an anticipated profit of roughly $10 million to adjusted working earnings for fiscal 12 months 2023.

Lengthy-Time period Strategic Initiatives and Outlook

Starting in fiscal 2023, the Firm will probably be leveraging the fashionable retail infrastructure it has constructed lately, and specializing in three key strategic initiatives to drive development and profitability:

  • Improve our buyer centricity, together with an expanded companies ecosystem that helps skilled stylists, and elevated training and experience to encourage and assist all clients;
  • Develop excessive margin owned manufacturers at Sally Magnificence and amplify innovation; and
  • Improve the effectivity of operations and optimize our capabilities.

The Firm believes these initiatives will assist a long-term development algorithm of low- to mid-single-digit internet gross sales development, gross margins above 50% and low double-digit working margins.

Fiscal 2022 Fourth Quarter Working Outcomes

Fourth quarter consolidated internet gross sales had been $962.5 million, a lower of two.8% in comparison with the prior 12 months. Comparable gross sales had been flat to the prior 12 months, and had been unfavorably impacted by inflationary pressures that continued to influence client habits and provide chain challenges at Magnificence Methods Group. The Firm was working 117 fewer shops on the finish of the quarter in comparison with the prior 12 months. International foreign money translation had an unfavorable influence of 170 foundation factors on consolidated internet gross sales for the quarter. At fixed foreign money, world e-commerce gross sales elevated 30% in comparison with the prior 12 months to $90 million or 9.3% of consolidated internet gross sales for the quarter.

Consolidated gross revenue for the fourth quarter was $463.5 million in comparison with $501.0 million within the prior 12 months, a lower of seven.5%. Consolidated GAAP gross margin was 48.2%, a lower of 240 foundation factors in comparison with 50.6% within the prior 12 months, pushed primarily by a non-cash stock write-down of $19.4 million on account of the Firm’s distribution heart consolidation and retailer optimization plan. Excluding the stock write-down, Adjusted Gross Margin was 50.1%, a lower of 60 foundation factors in comparison with 50.7% within the prior 12 months, as greater product margin from pricing leverage at Sally Magnificence was greater than offset by a gross sales combine shift between Sally Magnificence and Magnificence Methods Group and better distribution and freight prices in each segments.

Promoting, common and administrative (SG&A) bills totaled $397.9 million, up $11.3 million in comparison with the prior 12 months, pushed primarily by elevated labor prices, partially offset by decrease bonus expense. As a proportion of gross sales, SG&A bills had been 41.3% in comparison with 39.0% within the prior 12 months.

GAAP working earnings and working margin within the fourth quarter had been $39.2 million and 4.1%, in comparison with $111.2 million and 11.2%, within the prior 12 months. Adjusted Working Earnings and Working Margin, excluding the Firm’s restructuring efforts and COVID-19 associated internet bills, had been $83.9 million and eight.7%, in comparison with $115.8 million and 11.7%, within the prior 12 months.

GAAP internet earnings within the fourth quarter had been $21.3 million, or $0.20 per diluted share, in comparison with GAAP internet earnings of $68.1 million, or $0.59 per diluted share within the prior 12 months. Adjusted Web Earnings, excluding the Firm’s restructuring efforts and COVID-19 associated internet bills, had been $54.4 million, or $0.50 per diluted share, in comparison with Adjusted Web Earnings of $73.1 million, or $0.64 per diluted share within the prior 12 months. Adjusted EBITDA within the fourth quarter was $112.4 million, a lower of 21.6% in comparison with the prior 12 months, and Adjusted EBITDA Margin was 11.7%, a lower of 280 foundation factors in comparison with the prior 12 months.

Stability Sheet and Money Movement

As of September 30, 2022, the Firm had money and money equivalents of $71 million and an impressive steadiness of $69 million below its asset-based revolving line of credit score. On the finish of the quarter, stock was $936.4 million, up 7.5% versus a 12 months in the past. Fourth quarter money movement from operations was $107.3 million. Capital expenditures within the quarter totaled $32.0 million.

The Firm ended the quarter with a internet debt leverage ratio of two.2x.

Fiscal 2022 Fourth Quarter Section Outcomes

Sally Magnificence Provide

  • Section internet gross sales had been $554.0 million within the quarter, a lower of 5.4% in comparison with the prior 12 months. The phase had an unfavorable influence of 270 foundation factors from overseas foreign money translation on reported gross sales and operated 110 fewer shops on the finish of the quarter in comparison with the prior 12 months. At fixed foreign money, phase e-commerce gross sales elevated 20% to $33 million or 6.0% of phase internet gross sales for the quarter.
  • Section comparable gross sales decreased 1.1% within the fourth quarter. The Sally Magnificence companies within the U.S. and Canada represented 80% of phase internet gross sales for the quarter and had a comparable gross sales lower of two.0%, primarily reflecting inflationary pressures that impacted client habits.
  • On the finish of the quarter, internet retailer rely was 3,439.
  • GAAP gross margin decreased by 90 foundation factors to 56.6% in comparison with the prior 12 months. The lower was primarily pushed by the stock write-down associated to the Firm’s retailer optimization plan. Excluding the stock write-down, Adjusted Gross Margin elevated 60 foundation factors to 58.3% in comparison with the prior 12 months. The rise was primarily pushed by pricing leverage, partially offset by greater distribution and freight prices.
  • GAAP working earnings had been $80.5 million in comparison with $105.7 million within the prior 12 months, representing a lower of 23.8%. GAAP working margin decreased to 14.5% in comparison with 18.1% within the prior 12 months.

Magnificence Methods Group

  • Section internet gross sales had been $408.5 million within the quarter, a rise of 0.9% in comparison with the prior 12 months. The phase had an unfavorable influence of 30 foundation factors on reported gross sales from overseas foreign money translation and operated 7 fewer shops on the finish of the quarter in comparison with the prior 12 months. At fixed foreign money, phase e-commerce gross sales elevated 37% to $57 million or 13.9% of phase internet gross sales for the quarter.
  • Section comparable gross sales elevated 1.5% within the fourth quarter, however continued inflationary pressures that impacted salon clients and provide chain challenges.
  • On the finish of the quarter, internet retailer rely was 1,355.
  • GAAP gross margin decreased 400 foundation factors to 36.7% within the quarter in comparison with the prior 12 months, pushed primarily by the stock write-down associated to the Firm’s distribution heart consolidation and retailer optimization plan, decrease product margin from a gross sales combine shift between shops and full service, and better distribution and freight prices. Excluding the stock write-down, Adjusted Gross Margin decreased 180 foundation factors to 38.9% in comparison with the prior 12 months.
  • GAAP working earnings had been $32.8 million within the quarter, a lower of 38.6% in comparison with $53.4 million within the prior 12 months. GAAP working margin within the quarter was 8.0% in comparison with 13.2% within the prior 12 months.
  • On the finish of the quarter, there have been 718 distributor gross sales consultants in comparison with 719 within the prior 12 months.

Fiscal Yr 2023 Steering

We stay inspired by the rebuilt basis of the enterprise and are excited in regards to the potential of our new strategic initiatives. As we leverage these strengths, we additionally anticipate that the exterior surroundings will stay difficult within the nearer time period, most notably the inflationary stress that’s negatively impacting client buying habits and in addition driving elevated labor prices.

Factoring within the present macro surroundings and the influence from the Firm’s distribution heart consolidation and retailer optimization plan, the Firm is offering the next steering for the complete fiscal 12 months 2023:

  • Comparable gross sales, however a notable change in client habits, are anticipated to extend by low single digits in comparison with the prior 12 months, pushed by development in key classes, gross sales switch from retailer closures, our expanded Regis distribution and new strategic initiatives;
  • Web gross sales are anticipated to say no by low-single digits in comparison with the prior 12 months. This displays roughly 150 to 200 foundation factors of internet unfavorable influence on account of retailer closures and anticipated gross sales recapture charges from our optimization efforts, and roughly 150 foundation factors of anticipated influence from overseas alternate headwinds;
  • Gross Margin is predicted to stay above 50%; and
  • Adjusted Working Margin is predicted to be within the vary of 8.5% and 9.5%, inclusive of funding in our retailer labor as we lean in to elevating the experience of our associates to drive our development within the coming years.

Convention Name and The place You Can Discover Extra Info

The Firm will maintain a convention name and audio webcast as we speak to debate its monetary outcomes and its enterprise at roughly 7:30 a.m. Central Time as we speak, November 10, 2022. Through the convention name, the Firm might focus on and reply a number of questions regarding enterprise and monetary issues and developments affecting the Firm. The Firm’s responses to those questions, in addition to different issues mentioned in the course of the convention name, might comprise or represent materials data that has not been beforehand disclosed. Simultaneous to the convention name, an audio webcast of the decision will probably be out there through a hyperlink on the Firm’s web site, sallybeautyholdings.com/investor-relations. The convention name may be accessed by dialing (844) 867-6169 (Worldwide: (409) 207-6975) and referencing the entry code 875677#. The teleconference will probably be held in a “listen-only” mode for all members aside from the Firm’s present sell-side and buy-side funding professionals. As well as, a supplemental slide presentation could also be considered in the course of the name on the following hyperlink SBH This autumn Earnings Presentation and getting into the occasion password 2HFpGjMpV94. A replay of the earnings convention name will probably be out there beginning at 10:30 a.m. Central Time, November 10, 2022, by means of November 24, 2022, by dialing (866) 207-1041 (Worldwide: (402) 970-0847) and referencing entry code 7597535#. Additionally, a web site replay will probably be out there on sallybeautyholdings.com/investor-relations.

About Sally Magnificence Holdings, Inc.

Sally Magnificence Holdings, Inc. (NYSE: SBH), because the chief in skilled hair coloration, sells and distributes skilled magnificence provides globally by means of its Sally Magnificence Provide and Magnificence Methods Group companies. Sally Magnificence Provide shops provide as much as 7,000 merchandise for hair coloration, hair care, nails, and skincare by means of proprietary manufacturers reminiscent of Ion®, Strawberry Leopard®, Generic Worth Merchandise®, Past the Zone® and Silk Parts® in addition to skilled strains reminiscent of Wella®, Clairol®, OPI®, Conair® and L’Oreal®. Magnificence Methods Group shops, branded as CosmoProf® or Armstrong McCall® shops, together with its outdoors gross sales consultants, promote as much as 8,000 professionally branded merchandise together with Paul Mitchell®, Wella®, Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico® and Olaplex®, meant to be used in salons and for resale by salons to retail shoppers. For extra details about Sally Magnificence Holdings, Inc., please go to https://www.sallybeautyholdings.com/.

Cautionary Discover Concerning Ahead-Wanting Statements

Statements on this information launch and the schedules hereto which aren’t purely historic info or which rely upon future occasions could also be forward-looking statements inside the that means of Part 27A of the Securities Act of 1933, as amended, and Part 21E of the Securities Alternate Act of 1934, as amended. Ahead-looking statements, as that time period is outlined within the Non-public Securities Litigation Reform Act of 1995, may be recognized by means of forward-looking terminology reminiscent of “believes,” “initiatives,” “expects,” “can,” “might,” “estimates,” “ought to,” “plans,” “targets,” “intends,” “might,” “will,” “would,” “anticipates,” “potential,” “assured,” “optimistic,” or the adverse thereof, or different variations thereon, or comparable terminology, or by discussions of technique, aims, estimates, steering, expectations and future plans. Ahead-looking statements may also be recognized by the truth that these statements don’t relate strictly to historic or present issues.

Readers are cautioned to not place undue reliance on forward-looking statements as such statements communicate solely as of the date they had been made. Any forward-looking statements contain dangers and uncertainties that might trigger precise occasions or outcomes to vary materially from the occasions or outcomes described within the forward-looking statements, together with, however not restricted to, the dangers and uncertainties associated to COVID-19, and its persevering with influence on the economic system and people described in our filings with the Securities and Alternate Fee, together with our Annual Report on Type 10-Okay for the 12 months ended September 30, 2021. Consequently, all forward-looking statements on this launch are certified by the components, dangers and uncertainties contained therein. We assume no obligation to publicly replace or revise any forward-looking statements.

Use of Non-GAAP Monetary Measures

This information launch and the schedules hereto embrace the next monetary measures that haven’t been calculated in accordance with accounting ideas usually accepted in the US, or GAAP, and are due to this fact known as non-GAAP monetary measures: (1) Adjusted Gross Margin; (2) Adjusted Promoting, Basic and Administrative Bills; (3) Adjusted EBITDA and EBITDA Margin; (4) Adjusted Working Earnings and Working Margin; (5) Adjusted Web Earnings; (6) Adjusted Diluted Web Earnings Per Share; and (7) Working Free Money Movement. We have now offered definitions beneath for these non-GAAP monetary measures and have offered tables within the schedules hereto to reconcile these non-GAAP monetary measures to the comparable GAAP monetary measures.

Adjusted Gross Margin – We outline the measure Adjusted Gross Margin as GAAP gross margin excluding the write-down of COVID-19 associated private protecting tools stock and the write-down of stock associated to the Firm’s distribution heart consolidation and retailer optimization plan for the related time intervals as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Adjusted Promoting, Basic and Administrative Bills – We outline the measure Adjusted Promoting, Basic and Administrative Bills as GAAP promoting, common and administrative bills excluding COVID-19 internet bills and different changes for the related time intervals as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Adjusted EBITDA and EBITDA Margin – We outline the measure Adjusted EBITDA as GAAP internet earnings earlier than depreciation and amortization, curiosity expense, revenue taxes, share-based compensation, prices associated to the Firm’s restructuring plans, COVID-19 associated internet bills and different changes for the related time intervals as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures. Adjusted EBITDA Margin is Adjusted EBITDA as a proportion of internet gross sales.

Adjusted Working Earnings and Working Margin – Adjusted working earnings are GAAP working earnings that exclude prices associated to the Firm’s restructuring plans, internet bills associated to COVID-19 and different changes for the related time intervals as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures. Adjusted Working Margin is Adjusted Working Earnings as a proportion of internet gross sales.

Adjusted Web Earnings – Adjusted internet earnings is GAAP internet earnings that exclude tax-effected prices associated to the Firm’s restructuring plans, tax-effected internet bills associated to COVID-19, tax-effected bills associated to the loss on debt extinguishment, and tax-effected different changes for the related time intervals as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Adjusted Diluted Web Earnings Per Share – Adjusted diluted internet earnings per share is GAAP diluted earnings per share that exclude tax-effected prices associated to the Firm’s restructuring plans, tax-effected internet bills associated to COVID-19, tax-effected bills associated to the loss on debt extinguishment and tax-effected different changes for the related time intervals as indicated within the accompanying non-GAAP reconciliations to the comparable GAAP monetary measures.

Working Free Money Movement – We outline the measure Working Free Money Movement as GAAP internet money offered by working actions much less funds for capital expenditures (internet). We consider Working Free Money Movement is a crucial liquidity measure that gives helpful data to traders about the amount of money generated from operations after bearing in mind funds for capital expenditures (internet).

We consider that these non-GAAP monetary measures present beneficial data relating to our earnings and enterprise developments by excluding particular gadgets that we consider usually are not indicative of the continued working outcomes of our companies; offering a helpful approach for traders to make a comparability of our efficiency over time and towards different corporations in our business.

We have now offered these non-GAAP monetary measures as supplemental data to our GAAP monetary measures and consider these non-GAAP measures present traders with extra significant monetary data relating to our working efficiency and money flows. Our administration and Board of Administrators additionally use these non-GAAP measures as supplemental measures to judge our companies and the efficiency of administration, together with the willpower of performance-based compensation, to make working and strategic selections, and to allocate monetary sources. We consider that these non-GAAP measures additionally present significant data for traders and securities analysts to judge our historic and potential monetary efficiency. These non-GAAP measures shouldn’t be thought of an alternative to or superior to GAAP outcomes. Moreover, the non-GAAP measures offered by us is probably not similar to equally titled measures of different corporations.

Supplemental Schedules

Section Info

1

Non-GAAP Monetary Measures Reconciliations

2-3

Non-GAAP Monetary Measures Reconciliations; Adjusted EBITDA and

Working Free Money Movement

4

Retailer Depend and Comparable Gross sales

5
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In hundreds, besides per share knowledge)
(Unaudited)
 
 
Three Months Ended September 30, Twelve Months Ended September 30,

2022

2021

Proportion
Change

2022

2021

Proportion
Change
 
Web gross sales

$

962,460

 

$

990,260

 

(2.8

)%

$

3,815,565

 

$

3,874,997

 

(1.5

)%

Price of merchandise offered

 

498,964

 

 

489,285

 

2.0

%

 

1,896,400

 

 

1,921,663

 

(1.3

)%

Gross revenue

 

463,496

 

 

500,975

 

(7.5

)%

 

1,919,165

 

 

1,953,334

 

(1.7

)%

Promoting, common and administrative bills

 

397,866

 

 

386,542

 

2.9

%

 

1,553,948

 

 

1,530,280

 

1.5

%

Restructuring

 

26,434

 

 

3,240

 

715.9

%

 

27,577

 

 

4,611

 

498.1

%

Working earnings

 

39,196

 

 

111,193

 

(64.7

)%

 

337,640

 

 

418,443

 

(19.3

)%

Curiosity expense

 

17,429

 

 

20,196

 

(13.7

)%

 

93,543

 

 

93,509

 

0.0

%

Earnings earlier than provision for revenue taxes

 

21,767

 

 

90,997

 

(76.1

)%

 

244,097

 

 

324,934

 

(24.9

)%

Provision for revenue taxes

 

428

 

 

22,848

 

(98.1

)%

 

60,544

 

 

85,076

 

(28.8

)%

Web earnings

$

21,339

 

$

68,149

 

(68.7

)%

$

183,553

 

$

239,858

 

(23.5

)%

 
Earnings per share:
Primary

$

0.20

 

$

0.60

 

(66.7

)%

$

1.69

 

$

2.13

 

(20.7

)%

Diluted

$

0.20

 

$

0.59

 

(66.1

)%

$

1.66

 

$

2.10

 

(21.0

)%

 
Weighted common shares:
Primary

 

106,964

 

 

112,797

 

 

108,665

 

 

112,653

 

Diluted

 

108,510

 

 

114,565

 

 

110,293

 

 

114,212

 

Foundation Level
Change
Foundation Level
Change
Comparability as a proportion of internet gross sales
Consolidated gross margin

 

48.2

%

 

50.6

%

(240

)

 

50.3

%

 

50.4

%

(10

)

Promoting, common and administrative bills

 

41.3

%

 

39.0

%

230

 

 

40.7

%

 

39.5

%

120

 

Consolidated working margin

 

4.1

%

 

11.2

%

(710

)

 

8.8

%

 

10.8

%

(200

)

 
Efficient tax price

 

2.0

%

 

25.1

%

(2,310

)

 

24.8

%

 

26.2

%

(140

)

 
 
 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Stability Sheets
(In hundreds)
(Unaudited)
 
September 30,

2022

2021

 
Money and money equivalents

$

70,558

$

400,959

Commerce and different accounts receivable

 

72,277

 

66,581

Stock

 

936,374

 

871,349

Different present belongings

 

53,192

 

44,686

Whole present belongings

 

1,132,401

 

1,383,575

Property and tools, internet

 

297,876

 

307,377

Working lease asset

 

532,177

 

537,673

Goodwill and different intangible belongings

 

576,381

 

596,741

Different belongings

 

38,032

 

21,766

Whole belongings

$

2,576,867

$

2,847,132

 
Present maturities of long-term debt

$

68,658

$

194

Accounts payable

 

275,717

 

291,632

Accrued liabilities

 

161,065

 

206,155

Present working lease liabilities

 

157,734

 

156,234

Earnings taxes payable

 

4,740

 

10,666

Whole present liabilities

 

667,914

 

664,881

Lengthy-term debt

 

1,083,043

 

1,382,530

Lengthy-term working lease liabilities

 

424,762

 

404,147

Different liabilities

 

22,427

 

29,056

Deferred revenue tax liabilities, internet

 

85,085

 

85,777

Whole liabilities

 

2,283,231

 

2,566,391

Whole stockholders’ fairness

 

293,636

 

280,741

Whole liabilities and stockholders’ fairness

$

2,576,867

$

2,847,132

 

Supplemental Schedule 1

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Section Info
(In hundreds)
(Unaudited)
 
Three Months Ended September 30, Twelve Months Ended September 30,

2022

2021

Proportion
Change

2022

2021

Proportion
Change
Web gross sales:
Sally Magnificence Provide (“SBS”)

$

554,004

 

$

585,367

 

(5.4

)%

$

2,193,044

 

$

2,278,382

 

(3.7

)%

Magnificence Methods Group (“BSG”)

 

408,456

 

 

404,893

 

0.9

%

 

1,622,521

 

 

1,596,615

 

1.6

%

Whole internet gross sales

$

962,460

 

$

990,260

 

(2.8

)%

$

3,815,565

 

$

3,874,997

 

(1.5

)%

 
Working earnings:
SBS

$

80,529

 

$

105,683

 

(23.8

)%

$

350,884

 

$

417,658

 

(16.0

)%

BSG

 

32,786

 

 

53,398

 

(38.6

)%

 

193,407

 

 

205,078

 

(5.7

)%

Section working earnings

 

113,315

 

 

159,081

 

(28.8

)%

 

544,291

 

 

622,736

 

(12.6

)%

 
Unallocated bills (1)

 

47,685

 

 

44,648

 

6.8

%

 

179,074

 

 

199,682

 

(10.3

)%

Restructuring

 

26,434

 

 

3,240

 

715.9

%

 

27,577

 

 

4,611

 

498.1

%

Curiosity expense

 

17,429

 

 

20,196

 

(13.7

)%

 

93,543

 

 

93,509

 

0.0

%

Earnings earlier than provision for revenue taxes

$

21,767

 

$

90,997

 

(76.1

)%

$

244,097

 

$

324,934

 

(24.9

)%

 
 
Section gross margin:

2022

2021

Foundation Level
Change

2022

2021

Foundation Level
Change
SBS

 

56.6

%

 

57.5

%

(90

)

 

58.1

%

 

57.9

%

20

 

BSG

 

36.7

%

 

40.7

%

(400

)

 

39.8

%

 

39.8

%

0

 

 
Section working margin:
SBS

 

14.5

%

 

18.1

%

(360

)

 

16.0

%

 

18.3

%

(230

)

BSG

 

8.0

%

 

13.2

%

(520

)

 

11.9

%

 

12.8

%

(90

)

Consolidated working margin

 

4.1

%

 

11.2

%

(710

)

 

8.8

%

 

10.8

%

(200

)

 
 
 
(1) Unallocated bills, together with share-based compensation expense, include company and shared prices and are included in promoting, common and administrative bills.
 

Supplemental Schedule 2

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Monetary Measures Reconciliations
(In hundreds, besides per share knowledge)
(Unaudited)
 
Three Months Ended September 30, 2022
As Reported Restructuring (1) As Adjusted
(Non-GAAP)
 
Price of merchandise offered

$

498,964

 

$

(18,316

)

$

480,648

 

Consolidated gross margin

 

48.2

%

 

50.1

%

Promoting, common and administrative bills

 

397,866

 

 

 

 

397,866

 

SG&A bills, as a proportion of gross sales

 

41.3

%

 

41.3

%

Restructuring

 

26,434

 

 

(26,434

)

 

 

Working earnings

 

39,196

 

 

44,750

 

 

83,946

 

Working margin

 

4.1

%

 

8.7

%

Earnings earlier than provision for revenue taxes

 

21,767

 

 

44,750

 

 

66,517

 

Provision for revenue taxes (3)

 

428

 

 

11,659

 

 

12,087

 

Web earnings

$

21,339

 

$

33,091

 

$

54,430

 

 
Earnings per share:
Primary

$

0.20

 

$

0.31

 

$

0.51

 

Diluted

$

0.20

 

$

0.30

 

$

0.50

 

 
Three Months Ended September 30, 2021
As Reported Restructuring (1) COVID-19 (2) As Adjusted
(Non-GAAP)
 
Price of merchandise offered

$

489,285

 

$

(1,444

)

$

 

$

487,841

 

Consolidated gross margin

 

50.6

%

 

50.7

%

Promoting, common and administrative bills

 

386,542

 

 

 

 

86

 

 

386,628

 

SG&A bills, as a proportion of gross sales

 

39.0

%

 

39.0

%

Restructuring

 

3,240

 

 

(3,240

)

 

 

 

 

Working earnings

 

111,193

 

 

4,684

 

 

(86

)

 

115,791

 

Working margin

 

11.2

%

 

11.7

%

Earnings earlier than provision for revenue taxes

 

90,997

 

 

4,684

 

 

(86

)

 

95,595

 

Provision for revenue taxes (3)

 

22,848

 

 

376

 

 

(738

)

 

22,486

 

Web earnings

$

68,149

 

$

4,308

 

$

652

 

$

73,109

 

 
Earnings per share:
Primary

$

0.60

 

$

0.04

 

$

0.01

 

$

0.65

 

Diluted

$

0.59

 

$

0.04

 

$

0.01

 

$

0.64

 

 
(1) For the three months ended September 30, 2022, restructuring included $45.5 million for our Distribution Middle Consolidation and Retailer Optimization Plan, together with stock write-downs of $19.4 million inside price of merchandise offered, and $0.8 million for our Transformation Plan. For the three months ended September 30, 2021, restructuring, together with stock write-downs of $1.4 million inside price of merchandise offered, represents bills incurred primarily in reference to the Transformation Plan.
 
(2) For the three months ended September 30, 2021, COVID-19 primarily represents a lease subsidy offered by the Canadian authorities and extra tax influence from the donation of personal-protective tools.
 
(3) The availability for revenue taxes was calculated utilizing the relevant tax charges for every nation, whereas excluding the tax advantages for nations the place the tax profit is just not presently deemed possible of being realized.

Supplemental Schedule 3

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Monetary Measures Reconciliations, Continued
(In hundreds, besides per share knowledge)
(Unaudited)
 
Twelve Months Ended September 30, 2022
As Reported Restructuring (1) COVID-19 (2) Loss on Debt
Extinguishment
and Different (3)
As Adjusted
(Non-GAAP)
 
Price of merchandise offered

$

1,896,400

 

$

(18,316

)

$

(2,841

)

$

 

$

1,875,243

 

Consolidated gross margin

 

50.3

%

 

50.9

%

Promoting, common and administrative bills

 

1,553,948

 

 

 

 

(3,382

)

 

(1,546

)

 

1,549,020

 

SG&A bills, as a proportion of gross sales

 

40.7

%

 

40.6

%

Restructuring

 

27,577

 

 

(27,577

)

 

 

 

 

 

 

Working earnings

 

337,640

 

 

45,893

 

 

6,223

 

 

1,546

 

 

391,302

 

Working margin

 

8.8

%

 

10.3

%

Earnings earlier than provision for revenue taxes

 

244,097

 

 

45,893

 

 

6,223

 

 

17,985

 

 

314,198

 

Provision for revenue taxes (3)

 

60,544

 

 

9,830

 

 

2,132

 

 

3,821

 

 

76,327

 

Web earnings

$

183,553

 

$

36,063

 

$

4,091

 

$

14,164

 

$

237,871

 

 
Earnings per share:
Primary

$

1.69

 

$

0.33

 

$

0.04

 

$

0.13

 

$

2.19

 

Diluted

$

1.66

 

$

0.33

 

$

0.04

 

$

0.13

 

$

2.16

 

 
Twelve Months Ended September 30, 2021
As Reported Restructuring (1) COVID-19 (2) As Adjusted
(Non-GAAP)
 
Price of merchandise offered

$

1,921,663

 

$

(1,444

)

$

(6,957

)

$

1,913,262

 

Consolidated gross margin

 

50.4

%

 

50.6

%

Promoting, common and administrative bills

 

1,530,280

 

 

 

 

(29,667

)

 

1,500,613

 

SG&A bills, as a proportion of gross sales

 

39.5

%

 

38.7

%

Restructuring

 

4,611

 

 

(4,611

)

 

 

 

 

Working earnings

 

418,443

 

 

6,055

 

 

36,624

 

 

461,122

 

Working margin

 

10.8

%

 

11.9

%

Earnings earlier than provision for revenue taxes

 

324,934

 

 

6,055

 

 

36,624

 

 

367,613

 

Provision for revenue taxes (3)

 

85,076

 

 

640

 

 

7,910

 

 

93,626

 

Web earnings

$

239,858

 

$

5,415

 

$

28,714

 

$

273,987

 

 
Earnings per share:
Primary

$

2.13

 

$

0.05

 

$

0.25

 

$

2.43

 

Diluted

$

2.10

 

$

0.05

 

$

0.25

 

$

2.40

 

 
 
(1) For fiscal 12 months 2022, restructuring included $45.5 million for our Distribution Middle Consolidation and Retailer Optimization Plan, together with stock write-downs of $19.4 million inside price of merchandise offered, and $0.4 million for our Transformation Plan. For fiscal 12 months 2021, restructuring, together with stock write-downs of $1.4 million in price of merchandise offered, represents bills incurred primarily in reference to Undertaking Surge and the Transformation Plan.
 
(2) For fiscal 12 months 2022, COVID-19-related expense is comprised of disposal prices for out of date personal-protective tools stock (“PPE”). For fiscal 12 months 2021, COVID-19 bills primarily represents the write-down of PPE of $7.0 million in price of merchandise offered and donation expense associated to the personal-protective tools stock of $33.0 million in promoting, common, and administrative bills, partially offset by wage and lease subsidies offered by the Canadian authorities of $3.4 million.
 
(3) For fiscal 12 months 2022, loss on debt extinguishment pertains to the reimbursement of our 8.750% Senior Secured Second Lien Notes due 2025, which included a redemption premium of $13.1 million and the write-off of unamortized deferred financing prices of $3.3 million included in curiosity expense.
 
(3) The availability for revenue taxes was calculated utilizing the relevant tax charges for every nation upon the popularity of bills or positive aspects, whereas excluding the tax advantages for nations the place the tax profit is just not presently deemed possible of being realized.

Supplemental Schedule 4

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Non-GAAP Monetary Measures Reconciliations, Continued
(In hundreds)
(Unaudited)
 
Three Months Ended September 30, Twelve Months Ended September 30,
Adjusted EBITDA:

2022

2021

Proportion
Change

2022

2021

Proportion
Change
 
Web earnings

$

21,339

 

$

68,149

 

(68.7

)%

$

183,553

 

$

239,858

 

(23.5

)%

Add:
Depreciation and amortization

 

26,568

 

 

24,111

 

10.2

%

 

99,929

 

 

102,201

 

(2.2

)%

Curiosity expense

 

17,429

 

 

20,196

 

(13.7

)%

 

93,543

 

 

93,509

 

0.0

%

Provision for revenue taxes

 

428

 

 

22,848

 

(98.1

)%

 

60,544

 

 

85,076

 

(28.8

)%

EBITDA (non-GAAP)

 

65,764

 

 

135,304

 

(51.4

)%

 

437,569

 

 

520,644

 

(16.0

)%

COVID-19

 

 

 

(86

)

(100.0

)%

 

6,223

 

 

36,624

 

(83.0

)%

Restructuring and different

 

44,750

 

 

4,684

 

855.4

%

 

47,439

 

 

6,055

 

683.5

%

Share-based compensation (1)

 

1,841

 

 

3,498

 

(47.4

)%

 

10,708

 

 

11,656

 

(8.1

)%

Adjusted EBITDA (non-GAAP)

$

112,355

 

$

143,400

 

(21.6

)%

$

501,939

 

$

574,979

 

(12.7

)%

 
(1) For twelve months ended September 30, 2022, sure forfeiture quantities in connection to our Transformation Plan are included in restructuring and different.
 
Foundation Level
Change
Foundation Level
Change
Adjusted EBITDA as a proportion of internet gross sales
Adjusted EBITDA margin

 

11.7

%

 

14.5

%

(280

)

 

13.2

%

 

14.8

%

(160

)

 
 
Working Free Money Movement:

 

2022

 

 

2021

 

Proportion Change

 

2022

 

 

2021

 

Proportion Change
Web money offered by working actions

$

107,273

 

$

164,132

 

(34.6

)%

$

156,500

 

$

381,860

 

(59.0

)%

Much less:
Funds for property and tools, internet

 

32,016

 

 

28,770

 

11.3

%

 

99,250

 

 

73,669

 

34.7

%

Working free money movement (non-GAAP)

$

75,257

 

$

135,362

 

(44.4

)%

$

57,250

 

$

308,191

 

(81.4

)%

 

Supplemental Schedule 5

 
SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES
Retailer Depend and Identical Retailer Gross sales
(Unaudited)
 
As of September 30,

2022

2021

Change
 
Variety of shops:
SBS:
Firm-operated shops

3,439

 

3,547

 

(108

)

Franchise shops

 

2

 

(2

)

Whole SBS

3,439

 

3,549

 

(110

)

BSG:
Firm-operated shops

1,223

 

1,230

 

(7

)

Franchise shops

132

 

132

 

 

Whole BSG

1,355

 

1,362

 

(7

)

Whole consolidated

4,794

 

4,911

 

(117

)

 
Variety of BSG distributor gross sales consultants

718

 

719

 

(1

)

 
BSG distributor gross sales consultants (DSC) embrace 195 and 194 gross sales consultants employed by our franchisees at September 30, 2021 and 2020, respectively.
Three Months Ended September 30, Twelve Months Ended September 30,

2022

2021

Foundation Level
Change

2022

2021

Foundation Level
Change
Comparable gross sales development (decline):
SBS

(1.1

)%

2.0

%

(310

)

(0.6

) %

9.1

%

(970

)

BSG

1.5

%

5.7

%

(420

)

2.3

%

10.3

%

(800

)

Consolidated

0.0

%

3.4

%

(340

)

0.6

%

9.6

%

(900

)

 
Our comparable gross sales embrace gross sales from shops which have been working for 14 months or longer as of the final day of a month and e-commerce income. Moreover, our comparable gross sales embrace gross sales to franchisees and full service gross sales. Our comparable gross sales excludes the impact of modifications in overseas alternate charges and gross sales from shops relocated till 14 months after the relocation. Income from acquisitions are excluded from our comparable gross sales calculation till 14 months after the acquisition.

 

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