DENTON, Texas (AP) -- Sally Beauty Holdings Inc. on Tuesday reported nearly flat earnings in its fiscal third quarter, as higher revenue was offset by expenses and a litigation credit in last-year's quarter.
The beauty products company also announced an offering of 23.1 million shares of its stock as its largest shareholder, Clayton, Dubilier & Rice LLC, tries to sell off its stake in the business.
Shares fell more than 8 percent in after-hours trading.
The company, based in Denton, Texas, sells hair, skin and nail products at its own stores worldwide and through other retailers.
Sally Beauty made $69.5 million, or 37 cents per share, for the quarter that ended June 30. That's compared with $69.1 million, or 37 cents per share, in the same quarter last year. After adjusting for a $13.4 million litigation settlement in the fiscal third quarter of 2011 and other items, it earned 38 cents per share compared with 30 cents per share in last year's quarter.
Revenue rose 6 percent to $887 million on stronger sales at its growing base of stores and other retailers.
The results fell below Wall Street expectations. Analysts polled by FactSet expected the company to post adjusted earnings of 37 cents per share on revenue of $900.4 million.
Sales at Sally Beauty Supply stores open at least a year grew 5.2 percent year-over-year. Analysts forecast an increase of 6.4 percent, according to FactSet. That measure is a key indicator of retail performance since it strips away the impact of recently opened or closed stores
The company did not provide details on why the private equity firm is selling its stake but expects it will hold no shares in the business once the offering is complete. A representative for Sally did not return calls for comment.
Clayton Dubilier & Rice declined to comment. The New York-based private equity firm has held a stake in the company since 2006.
Sally Beauty shares fell $2.29, or 8.5 percent, to $24.80 in after-hours trading.