Sally Beauty 3rd-quarter results mixed

Sally Beauty 3Q profit meets analysts' estimates, revenue misses Wall Street's expectations

Associated Press

DENTON, Texas (AP) -- Sally Beauty's fiscal third-quarter net income climbed 4 percent as sales improved at both of its divisions.

While profit met Wall Street's expectations, revenue missed analysts' estimates. And growth slowed for a key revenue metric. The stock fell in Thursday morning trading.

The company, which sells cosmetics and beauty supplies to both consumers and professionals, earned $72.5 million, or 42 cents per share, for the period ended June 30. That's up from $69.5 million, or 37 cents per share, a year earlier.

Revenue rose 3 percent to $912.1 million from $887 million, mostly because of new stores being added. Sales for the beauty systems unit increased 6 percent, while beauty supply division sales climbed 1 percent.

Still, the performance fell short of the $930.5 million analysts expected, according to FactSet.

Shares of Sally Beauty declined $2.88, or 9.4 percent, to $27.63. The stock has traded in a 52-week range of $22.49 to $31.86.

Revenue at stores open at least a year edged up 0.7 percent. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

The growth was slower than the 5.2 percent increase in the metric a year ago. Sally Beauty Holdings Inc. said that this was because of some tough comparisons and weaker traffic among U.S. customers that don't have its reward card.

Chairman, President and CEO Gary Winterhalter said in a statement that traffic was healthy at its overseas business and at the beauty systems group. He added that the company anticipates traffic among U.S. customers who don't have its reward card recovering over the next few months.

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