Sally Beauty Holdings (NYSE:SBH) has reported a dip in fourth-quarter revenue and earnings but good progress with its distribution center consolidation and store optimization plan, sending its shares higher on Tuesday morning.
The beauty products and solutions provider reported a 4.3% decline in net sales to $921 million for the quarter to September 30, 2023, while comparable sales were down 1.6%.
Adjusted earnings per share fell 8% to $0.42, below the $0.46 expected by analysts surveyed by Zacks Investment Research.
Its gross margin expanded by 240 basis points to 50.6%, while cash flow from operations reached $117 million and it achieved a healthy operating free cash flow of $90 million.
“We drove a comparable sales gain, maintained healthy gross margins and generated strong cash flow from operations against a rapidly shifting backdrop,” the company’s president and CEO Denise Paulonis commented in a statement.
“We also advanced our consumer-centric strategies during the year, launching new concepts and bringing new services to the market, while delivering unparalleled product innovation to both our Sally and BSG customers.”
The company has guided for steady 2024 net sales as growth from its strategic initiatives is offset by anticipated pressure on consumer spending. It also expects its gross margin to remain above 50%.
The company’s shares were up 17% at $9.53 in Tuesday late-morning trading in New York.
Contact the author at stephen.gunnion@proactiveinvestors.com