Sally Beauty Holdings, Inc. (NYSE:SBH) Q2 2023 Results Conference Call May 4, 2023 8:30 AM ET

Company Participants

Jeff Harkins - VP, IR and Treasurer

Denise Paulonis - President and CEO

Marlo Cormier - CFO

Conference Call Participants

Oliver Chen - PD Cowen

Korinne Wolfmeyer - Piper Sandler

Ashley Helgans - Jefferies

Olivia Tong - Raymond James

Michael Kessler - Morgan Stanley

Operator

Good morning, everyone, and welcome to the Sally Beauty Holdings conference call to discuss the company’s fiscal 2023 second quarter results. All participants have been placed in a listen-only mode. After management’s prepared remarks, there will be in-state.

Now I would like to turn the call over to Jeff Harkins, Vice President of Investor Relations and Treasurer for Sally Beauty Holdings.

Jeff Harkins

Thank you. Good morning, everyone, and thank you for joining us.

With me on the call today are Denise Paulonis, President and Chief Executive Officer; and Marlo Cormier, Chief Financial Officer. Before we begin, I would like to remind everyone that management’s remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K and other filings with the SEC. Any forward-looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. The company has provided a detailed explanation and reconciliations of its adjusting items and non-GAAP financial measures in its earnings press release and on its website. Now I’d like to turn the call over to Denise to begin the formal remarks.

Denise Paulonis

Thank you, Jeff, and good morning, everyone. We’re pleased to report another solid quarter in fiscal Q2 with notable strength in our Sally division, which delivered comp sales growth of 9.1%. On a consolidated basis, net sales increased 1% to $919 million and comparable sales grew 5.7%, with e-commerce sales up 9% year-over-year on a constant currency basis. Solid gross margin performance and prudent cost control enabled us to deliver adjusted EBITDA of $105 million.

The results reflect strong execution by our team and demonstrate that our strategies are working in what continues to be a dynamic macro environment. In the quarter, comparable transactions at Sally were up low single digits, with average ticket up mid-single digits driven by higher average unit retail prices and flat units per transaction. On the BSG side, comparable store transactions were down slightly with average ticket up low single digits, driven by higher average unit retail prices, partially offset by lower units per transaction. The color and care categories remained strong at Sally, up 6% and 2%, respectively, on a total sales basis, which includes the impact of store closures. Color continues to see strong momentum with great coverage up 14%.