Sally Beauty Holdings, Inc. (NYSE:SBH) Q4 2023 Earnings Conference Call November 14, 2023 8:30 AM ET

Company Participants

Jeff Harkins - Vice President-Investor Relations & Treasurer

Denise Paulonis - President & Chief Executive Officer

Marlo Cormier - Chief Financial Officer

Conference Call Participants

Oliver Chen - TD Cowen

Korinne Wolfmeyer - Piper Sandler

Ashley Helgans - Jefferies

Olivia Tong - Raymond James

Operator

Good morning everyone, and welcome to Sally Beauty Holdings Conference Call to discuss the company’s Fourth Quarter and Full Year Fiscal 2023 Results. All participants have been placed in a listen-only mode. After management’s prepared remarks, there will be a question and answer session. Additional instructions will be given at that time.

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 full year financial results in line with the expectations we laid out at the beginning of fiscal 2023. We also advanced our strategic priorities during the year, engaging our Sally customers and BSG stylists through new concepts and services, product innovation and distinctive omnichannel experiences. We delivered a comparable sales increase of 1.4% and net sales of $3.73 billion, down 2.3% versus a year ago on 308 fewer stores.

We also maintained our healthy gross margin profile above 50% and captured $50 million of expense savings under our DC and store optimization program, while investing in wages and our strategic initiatives. In turn, we achieved adjusted operating margin of 9.1% and adjusted EBITDA of $459 million. Additionally, the business generated strong free cash flow of $159 million.