Sally Beauty profits boom as sales enjoy strong growth
Net earnings grew by 57 percent to $41m on the back of like-for-like sales that grew by 13 percent to $793m – figures that beat analysts’ expectations and led the company’s share price by 18 percent.
The company said that the growth was driven by same store sales growth and acquisitions, together with the fact that the company opened 29 more stores compared to the same period last year.
Sally store growth drives business
The company began with one store in 1984 and through a policy of aggressive expansion has now grown the total number of retail outlets to over 3,800, offering more than 6,000 own brand and branded color make-up, hair care and skin care products.
The quarterly growth was partially offset by unfavorable currency exchange, particularly in Europe, where the company has exposure to both Sterling and the Euro currencies.
Sales at Sally Beauty Supply stores increased by 10 percent to reach $481m during the quarter, whereas sales at its Beauty Systems Group – which is mainly concerned with supplies to beauty professionals – grew by 17 percent to $312m.
Professional and consumer divisions experience growth
The company said that sales growth in both division were driven by the store expansion, while for the Beauty Systems Group growth was driven by both acquisitions.
In October last year Sally Beauty acquired the Wisconsin-based business Arial, which is a leading distributor of professional beauty supplies, concentrated in the upper Mid-West region of the nation.
Consolidated net sales for fiscal year 2010 were $2.9 billion, an increase of 10.6 percent compared to the figure for 2009, when the company was hit hard by the economic dowtnturn.
