Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2023 | Jan. 26, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | SALLY BEAUTY HOLDINGS, INC. | |
Entity Central Index Key | 0001368458 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2023 | |
Trading Symbol | SBH | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 1-33145 | |
Entity Tax Identification Number | 36-2257936 | |
Entity Address, Address Line One | 3001 Colorado Boulevard | |
Entity Address, City or Town | Denton | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76210 | |
City Area Code | 940 | |
Local Phone Number | 898-7500 | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 104,883,609 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 120,999 | $ 123,001 |
Trade accounts receivable, net | 32,164 | 33,421 |
Accounts receivable, other | 46,325 | 42,454 |
Inventory | 1,007,628 | 975,218 |
Other current assets | 55,748 | 53,903 |
Total current assets | 1,262,864 | 1,227,997 |
Property and equipment, net of accumulated depreciation of $811,658 at December 31, 2023, and $780,212 at September 30, 2023 | 284,899 | 297,779 |
Operating lease assets | 551,639 | 570,657 |
Goodwill | 536,686 | 533,081 |
Intangible assets, excluding goodwill, net of accumulated amortization of $32,121 at December 31, 2023, and $30,587 at September 30, 2023 | 55,186 | 55,171 |
Other assets | 40,112 | 40,565 |
Total assets | 2,731,386 | 2,725,250 |
Current liabilities: | ||
Current maturities of long-term debt | 4,168 | 4,173 |
Accounts payable | 267,479 | 258,884 |
Accrued liabilities | 139,573 | 163,366 |
Current operating lease liabilities | 147,069 | 150,479 |
Income taxes payable | 14,780 | 2,355 |
Total current liabilities | 573,069 | 579,257 |
Long-term debt | 1,065,299 | 1,065,811 |
Long-term operating lease liabilities | 438,928 | 455,071 |
Other liabilities | 22,465 | 23,139 |
Deferred income tax liabilities, net | 90,285 | 93,224 |
Total liabilities | 2,190,046 | 2,216,502 |
Stockholders’ equity: | ||
Common stock, $0.01 par value. Authorized 500,000 shares; 104,857 and 106,266 shares issued and shares outstanding at December 31, 2023, and September 30, 2023, respectively | 1,049 | 1,063 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Additional paid-in capital | 5,677 | |
Accumulated earnings | 652,247 | 624,772 |
Accumulated other comprehensive loss, net of tax | (111,956) | (122,764) |
Total stockholders’ equity | 541,340 | 508,748 |
Total liabilities and stockholders’ equity | $ 2,731,386 | $ 2,725,250 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation (in dollars) | $ 811,658 | $ 780,212 |
Intangible assets, excluding goodwill, accumulated amortization (in dollars) | $ 32,121 | $ 30,587 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 500,000,000 | 500,000,000 |
Common stock, shares issued | 104,857,000 | 106,266,000 |
Common stock, shares outstanding | 104,857,000 | 106,266,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 931,302 | $ 957,055 |
Cost of goods sold | 464,126 | 468,481 |
Gross profit | 467,176 | 488,574 |
Selling, general and administrative expenses | 398,138 | 391,580 |
Restructuring | (85) | 10,406 |
Operating earnings | 69,123 | 86,588 |
Interest expense | 17,314 | 17,923 |
Earnings before provision for income taxes | 51,809 | 68,665 |
Provision for income taxes | 13,419 | 18,328 |
Net earnings | $ 38,390 | $ 50,337 |
Earnings per share: | ||
Basic | $ 0.36 | $ 0.47 |
Diluted | $ 0.35 | $ 0.46 |
Weighted-average shares: | ||
Basic | 105,948 | 107,140 |
Diluted | 108,718 | 109,460 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss) | $ 38,390 | $ 50,337 |
Other comprehensive income: | ||
Foreign currency translation adjustments | 16,367 | 25,941 |
Interest rate swap, net of tax | (3,088) | |
Interest rate caps, net of tax | 203 | |
Foreign exchange contracts, net of tax | (2,471) | (910) |
Other comprehensive income, net of tax | 10,808 | 25,234 |
Total comprehensive income | $ 49,198 | $ 75,571 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss |
Balance at Sep. 30, 2022 | $ 293,636 | $ 1,070 | $ 4,241 | $ 440,172 | $ (151,847) |
Balance (in shares) at Sep. 30, 2022 | 106,970 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income (Loss) | 50,337 | 50,337 | |||
Other comprehensive income | 25,234 | 25,234 | |||
Share-based compensation | 5,135 | 5,135 | |||
Stock issued for equity awards | 82 | $ 4 | 78 | ||
Stock issued for equity awards (in shares) | 404 | ||||
Employee withholding taxes paid related to net share settlement | (1,126) | $ (1) | (1,125) | ||
Employee withholding taxes paid related to net share settlement (in shares) | (90) | ||||
Balance at Dec. 31, 2022 | 373,298 | $ 1,073 | 8,329 | 490,509 | (126,613) |
Balance (in shares) at Dec. 31, 2022 | 107,284 | ||||
Balance at Sep. 30, 2023 | $ 508,748 | $ 1,063 | 5,677 | 624,772 | (122,764) |
Balance (in shares) at Sep. 30, 2023 | 106,266 | 106,266 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income (Loss) | $ 38,390 | 38,390 | |||
Other comprehensive income | 10,808 | 10,808 | |||
Share-based compensation | 5,118 | 5,118 | |||
Stock issued for equity awards | 216 | $ 7 | 209 | ||
Stock issued for equity awards (in shares) | 722 | ||||
Employee withholding taxes paid related to net share settlement | (1,740) | $ (2) | (1,738) | ||
Employee withholding taxes paid related to net share settlement (in shares) | (192) | ||||
Repurchases and cancellations of common stock | (20,200) | $ (19) | $ (9,266) | (10,915) | |
Repurchases and cancellations of common stock (in shares) | (1,939) | ||||
Balance at Dec. 31, 2023 | $ 541,340 | $ 1,049 | $ 652,247 | $ (111,956) | |
Balance (in shares) at Dec. 31, 2023 | 104,857 | 104,857 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net Income (Loss) | $ 38,390 | $ 50,337 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 28,063 | 25,285 |
Share-based compensation expense | 5,118 | 5,135 |
Amortization of deferred financing costs | 637 | 648 |
Impairment of long-lived assets, including operating lease assets | 2,103 | |
Loss on disposal of equipment and other property | 2 | 77 |
Deferred income taxes | (3,237) | 889 |
Changes in (exclusive of effects of acquisitions): | ||
Trade accounts receivable | 1,715 | 2,270 |
Accounts receivable, other | (3,294) | (3,817) |
Inventory | (24,159) | (38,019) |
Other current assets | (1,117) | (4,018) |
Other assets | (1,709) | 4,074 |
Operating leases, net | (641) | (10,392) |
Accounts payable and accrued liabilities | (642) | 7,606 |
Income taxes payable | 12,586 | 12,460 |
Other liabilities | (692) | 313 |
Net cash provided by operating activities | 51,020 | 54,951 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net of proceeds | (30,551) | (25,007) |
Acquisitions, net of cash acquired | (218) | |
Net cash used by investing activities | (30,769) | (25,007) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 67,000 | 229,000 |
Repayments of long-term debt | (68,052) | (233,927) |
Proceeds from equity awards | 216 | 60 |
Payments for common stock repurchased | (20,200) | |
Employee withholding taxes paid related to net share settlement of equity awards | (1,740) | (1,125) |
Net cash used by financing activities | (22,776) | (5,992) |
Effect of foreign exchange rate changes on cash and cash equivalents | 523 | 4,561 |
Net (decrease) increase in cash and cash equivalents | (2,002) | 28,513 |
Cash and cash equivalents, beginning of period | 123,001 | 70,558 |
Cash and cash equivalents, end of period | 120,999 | 99,071 |
Supplemental Cash Flow Information: | ||
Interest paid | 27,272 | 26,758 |
Income taxes paid | 3,495 | 3,081 |
Capital expenditures incurred but not paid | $ 5,206 | $ 5,542 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 38,390 | $ 50,337 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b5-1 Arrangement Modified | false |
Non-Rule 10b5-1 Arrangement Modified | false |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated interim financial statements of Sally Beauty Holdings, Inc. and its subsidiaries included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures included herein are adequate for the interim period presented. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly our consolidated financial position as of December 31, 2023, and September 30, 2023, our consolidated results of operations, consolidated comprehensive income, consolidated statements of stockholders’ equity and consolidated cash flows for the three months ended December 31, 2023 and 2022 . Principles of Consolidation The unaudited condensed consolidated interim financial statements include all accounts of Sally Beauty Holdings, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. All amounts are in U.S. Dollars. Accounting Policies We adhere to the same accounting policies in the preparation of our condensed consolidated interim financial statements as we do in the preparation of our full year consolidated financial statements. As permitted under GAAP, interim accounting for certain expenses, including income taxes, is based on full-year assumptions. For interim financial reporting purposes, income taxes are recorded based upon our estimated annual effective income tax. Use of Estimates In order to present our financial statements in conformity with GAAP, we are required to make certain estimates and assumptions that impact our interim financial statements and supplementary disclosures. These estimates may use forecasted financial information based on reasonable information available, however are subject to change in the future. Significant estimates and assumptions are part of our accounting for sales allowances, deferred revenue, valuation of inventory, amortization and depreciation, intangibles and goodwill, and other reserves. We believe these estimates and assumptions are reasonable; however, they are based on management’s current knowledge of events and actions, and changes in facts and circumstances may result in revised estimates and impact actual results. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , to enhance segment disclosures for annual and interim consolidated financial statements, including significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”). For public companies, the amendments in the update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this update, but do not expect the update to impact our consolidated results of operations or financial position. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to expand disclosures in an entity’s income tax rate reconciliation table and the disaggregation of taxes paid in U.S. and foreign jurisdictions. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this update, but do not expect the update to impact our consolidated results of operations or financial position. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Substantially all of our revenue is derived through the sale of merchandise at the point-of-sale. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data. Changes to our contract liabilities, which are included in accrued liabilities in our condensed consolidated balance sheets, for the periods were as follows (in thousands): Three Months Ended December 31, 2023 2022 Beginning Balance $ 14,038 $ 13,460 Loyalty points and gift cards issued but not redeemed, net of estimated breakage 9,494 6,291 Revenue recognized from beginning liability ( 7,942 ) ( 4,489 ) Ending Balance $ 15,590 $ 15,262 See Note 10, Segment Reporting , for additional information regarding the disaggregation of our sales revenue. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements We measure on a recurring basis and disclose the fair value of our financial instruments under the provisions of ASC Topic 820, Fair Value Measurement, as amended (“ASC 820”). We define “fair value” as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for measuring fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels of that hierarchy are defined as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities; Level 2 - Pricing inputs are other than quoted prices in active markets, included in Level 1, that are either directly or indirectly observable; and Level 3 - Unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own model with estimates and assumptions. Financial instruments measured at fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follow: (in thousands) Classification Fair Value Hierarchy Level December 31, September 30, Financial Assets: Foreign exchange contracts Non-designated cash flow hedges Other current assets Level 2 $ 446 $ 1,160 Interest rate swap Other assets Level 2 788 4,668 Total assets $ 1,234 $ 5,828 . Financial Liabilities: Foreign exchange contracts Designated cash flow hedges Accrued liabilities Level 2 $ 1,869 $ — Non-designated cash flow hedges Accrued liabilities Level 2 1,543 397 Total liabilities $ 3,412 $ 397 The fair value of each asset and liability were measured using widely accepted valuation techniques, such as discounted cash flow analyses and observable inputs, such as market interest rates and foreign exchange rates. Other fair value disclosures The carrying amounts of cash equivalents, trade and other accounts receivable, and accounts payable and borrowing under our ABL facility approximate their respective fair values due to the short-term nature of these financial instruments. Carrying amounts and the related estimated fair value of our long-term debt, excluding finance lease obligations, debt issuance costs and original issue discounts, are as follows: December 31, 2023 September 30, 2023 (in thousands) Fair Value Hierarchy Level Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding finance lease obligations Senior notes Level 1 $ 679,961 $ 679,961 $ 679,961 $ 662,962 Term loan B due 2030 Level 2 397,000 397,993 398,000 398,000 Total long-term debt $ 1,076,961 $ 1,077,954 $ 1,077,961 $ 1,060,962 The fair values of our term loans were measured using quoted market prices for similar debt securities in active markets or widely accepted valuation techniques, such as discounted cash flow analyses, using observable inputs, such as market interest rates. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity Share Repurchases In August 2017, our Board of Directors (“Board”) approved a share repurchase program authorizing us to repurchase up to $ 1.0 billion of our common stock, subject to certain limitations governed by our debt agreements. In July 2021, our Board approved a term extension of our share repurchase program to September 30, 2025 . As of December 31, 2023, we had approximately $ 560.8 million of additional share repurchase authorizations remaining under our share repurchase program. For the three months ended December 31, 2023 , we repurchased 1.9 million shares of our common stock at a total cost of $ 20.0 million, excluding the impact of excise taxes. For the three months ended December 31, 2022 , we did no t repurchase shares under our share repurchase program. Accumulated Other Comprehensive Loss The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Swap Foreign Exchange Contracts Total Balance at September 30, 2023 $ ( 124,846 ) $ 3,716 $ ( 1,634 ) $ ( 122,764 ) Other comprehensive income (loss) before 16,367 ( 2,257 ) ( 3,895 ) 10,215 Reclassification to net earnings, net of tax — ( 831 ) 1,424 593 Balance at December 31, 2023 $ ( 108,479 ) $ 628 $ ( 4,105 ) $ ( 111,956 ) The tax impact for the changes in other comprehensive income (loss) and the reclassifications to net earnings was not material. |
Weighted-Average Shares
Weighted-Average Shares | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Weighted-Average Shares | 6. Weighted-Average Shares The following table sets forth the reconciliation of basic and diluted weighted-average shares (in thousands): Three Months Ended 2023 2022 Weighted-average basic shares 105,948 107,140 Dilutive securities: Stock option and stock award programs 2,770 2,320 Weighted-average diluted shares 108,718 109,460 Anti-dilutive options excluded from our computation of diluted shares 1,804 2,123 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets For the three months ended December 31, 2023, we considered potential triggering events and determined there were none during the period. No material impairment losses were recognized in the current or prior periods presented in connection with our goodwill and other intangible assets. As of September 30, 2023, we determined that due to the recent decline in the Company's share price and market capitalization, among other factors, a quantitative assessment was required. Based on our September 30, 2023 quantitative assessment using a discounted cash flow, we estimated the fair value for our BSG reporting unit to be approximately 18 % more than its carrying value. T he critical assumptions used as part of our evaluation included a projected long-term revenue growth rate of 2.0 % and a discount rate of 11.25 %, based on a weighted-average cost of capital analysis (adjusted for company specific risk). Our September 30, 2023 quantitative assessment indicated that the fair value of our SBS segment was substantially higher than its carrying value. Goodwill allocated to our SBS and BSG reporting units, which are also defined as our SBS and BSG segment, was $ 86.4 million and $ 450.3 million, respectively, as of December 31, 2023. Three Months Ended (in thousands) 2023 2022 Intangible assets amortization expense $ 860 $ 1,008 For the three months ended December 31, 2023 , changes in goodwill reflects the effects of foreign currency exchange rates of $ 4.0 million and adjustments of $ 0.4 million from the completion of our Goldwell of NY, Inc. acquisition fair value assessment. Additionally, the changes to other intangibles included effects of foreign currency exchange rates of $ 0.9 million. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 8. Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, September 30, Compensation and benefits $ 49,846 $ 69,915 Deferred revenue 20,422 18,259 Rental obligations 11,368 11,266 Insurance reserves 6,805 6,656 Interest payable 3,898 13,447 Property and other taxes 2,271 2,617 Operating accruals and other 44,963 41,206 Total accrued liabilities $ 139,573 $ 163,366 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 9. Derivative Instruments and Hedging Activities During the three months ended December 31, 2023 , we did no t purchase or hold any derivative instruments for trading or speculative purposes. See Note 4, Fair Value Measurements , for the classification and fair value of our derivative instruments. Designated Cash Flow Hedges Foreign Currency Forwards We regularly enter into foreign currency forwards to mitigate our exposure to exchange rate changes on forecasted inventory purchases in U.S. dollars by our foreign subsidiaries. At December 31, 2023, we held forwards, which expire ratably through September 30, 2024, with a notional amount, based upon exchange rates at December 31, 2023 , as follows (in thousands): Notional Currency Notional Amount Mexican Peso $ 16,538 Euro 8,742 Canadian Dollar 8,404 Total $ 33,684 Quarterly, the changes in fair value related to these foreign currency forwards are recorded into AOCL. As the forwards are exercised, the realized value is recognized into cost of goods sold, based on inventory turns, in our condensed consolidated statements of earnings. For the three months ended December 31, 2023 and 2022 , we recognized a loss of $ 1.4 million and a gain of $ 0.3 million, respectively. Based on December 31, 2023 valuations and exchange rates, we expect to reclassify losses of approximately $ 2.2 million out of AOCL and into cost of goods sold over the next 12 months. Interest Rate Swap In April 2023, we entered into a three-year interest rate swap with an initial notional amount of $ 200 million (the “interest rate swap”) to mitigate the exposure to higher interest rates in connection with our TLB 2030. The interest rate swap involves fixed monthly payments at the contract rate of 3.705 %, and in return, we will receive a floating interest payment based on the 1-month Adjusted Term SOFR Rate. The interest rate swap will mature in April 2026 and is designated as a cash flow hedge. Changes in the fair value of the interest rate swap are recorded quarterly, net of income tax, and included in AOCL. For the three months ended December 31, 2023 , we recognized income of $ 0.8 million into interest expense on our condensed consolidated statements of earnings related to the interest rate swap. At December 31, 2023 , we expect to reclassify gains of approximately $ 1.9 million out of AOCL and into interest expense over the next 12 months. Interest Rate Caps In July 2017, we purchased two interest rate caps with an initial aggregate notional amount of $ 550 million (the “interest rate caps”) to mitigate the exposure to higher interest rates in connection with our prior term loan due 2024. The interest rate caps were comprised of individual caplets and were designated as cash flow hedges. Accordingly, the changes in fair value of the interest rate caps were recorded quarterly, net of income tax, and included in AOCL. During fiscal year 2023, we early settled both interest rate caps due to the forecasted transactions being hedged no longer occurring as a result of the repayment of our prior term loan. The effects of our interest rate caps on our condensed consolidated statements of earnings were not material for the three months ended December 31, 2022. Non-Designated Derivative Instruments We also use foreign exchange contracts to mitigate our exposure to exchange rate changes in connection with certain intercompany balances not permanently invested. At December 31, 2023, we held forwards, which settle on various dates in the first month of the next two fiscal quarters, with a notional amount, based upon exchange rates at December 31, 2023 , as follows (in thousands): Notional Currency Notional Amount British Pound $ 44,723 Mexican Peso 21,517 Euro 20,679 Canadian Dollar 17,275 Total $ 104,194 We record changes in fair value and realized gains or losses related to these foreign currency forwards into selling, general and administrative expenses. For the three months ended December 31, 2023 and 2022 , the effects of these foreign exchange contracts on our condensed consolidated financial statements were losses of $ 1.3 million and gains of $ 0.4 million, respectively. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | 10. Segment Reporting Segment data for the three months ended December 31, 2023 and 2022, is as follows (in thousands): Three Months Ended 2023 2022 Net sales: Sally Beauty Supply ("SBS") $ 523,238 $ 549,472 Beauty Systems Group ("BSG") 408,064 407,583 Total $ 931,302 $ 957,055 Earnings before provision for income taxes: Segment operating earnings: SBS $ 77,629 $ 99,174 BSG 44,627 49,647 Segment operating earnings 122,256 148,821 Unallocated expenses 53,218 51,827 Restructuring ( 85 ) 10,406 Consolidated operating earnings 69,123 86,588 Interest expense 17,314 17,923 Earnings before provision for income taxes $ 51,809 $ 68,665 Sales between segments, which are eliminated in consolidation, were not material during the three months ended December 31, 2023 and 2022. Disaggregation of net sales by segment Periodically, we make minor adjustments to our product hierarchy, that impacts the roll-up of our merchandise categories. As a result, certain prior year amounts have been reclassified to conform to current year presentation. The following tables disaggregate our segment revenues by merchandise category. Three Months Ended SBS 2023 2022 Hair color 39.1 % 38.7 % Hair care 24.6 % 23.4 % Styling tools and supplies 18.2 % 19.5 % Nail 10.1 % 10.3 % Skin and cosmetics 7.4 % 7.4 % Other beauty items 0.6 % 0.7 % Total 100.0 % 100.0 % Three Months Ended BSG 2023 2022 Hair care 42.9 % 43.5 % Hair color 39.4 % 38.3 % Styling tools and supplies 10.7 % 10.8 % Skin and cosmetics 4.3 % 4.4 % Nail 2.4 % 2.7 % Other beauty items 0.3 % 0.3 % Total 100.0 % 100.0 % The following tables disaggregate our segment revenue by sales channels: Three Months Ended SBS 2023 2022 Company-operated stores 93.3 % 93.6 % E-commerce 6.7 % 6.4 % Total 100.0 % 100.0 % Three Months Ended BSG 2023 2022 Company-operated stores 68.6 % 66.3 % E-commerce 13.8 % 13.6 % Distributor sales consultants 10.6 % 12.6 % Franchise stores 7.0 % 7.5 % Total 100.0 % 100.0 % |
Restructuring
Restructuring | 3 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 11. Restructuring Restructuring expenses, included in Cost of Goods Sold (“COGS”) and Restructuring for the three months ended December 31, 2023 and 2022, are as follows (in thousands): Three Months Ended 2023 2022 Included in COGS (a) Distribution Center Consolidation and Store Optimization Plan $ — $ ( 2,680 ) Included in Restructuring (b) Distribution Center Consolidation and Store Optimization Plan $ ( 85 ) $ 10,406 (a) Amounts included in COGS relate to adjustments to our expected obsolescence reserve related to the Plan (as defined below). (b) For the three months ended December 31, 2022, restructuring consisted of closing costs related to lease terminations, employee termination benefits and $ 2.1 million in impairment charges. Distribution Center Consolidation and Store Optimization Plan In the fourth quarter of fiscal year 2022, our Board approved the Distribution Center Consolidation and Store Optimization Plan (“the Plan”) authorizing the closure of 330 SBS stores and 35 BSG stores, and the closure of two BSG distribution centers in Clackamas, Oregon and Pottsville, Pennsylvania. Stores identified for early closure were part of a strategic evaluation which included a market analysis of certain locations where we believed we would be able to recapture demand and improve profitability. The Plan has been substantially completed, as the remaining two BSG stores were closed during the quarter. However we may still incur future immaterial charges related to store closures such as exit costs, lease negotiation penalties and adjustments to estimates. As of December 31, 2023 , there were no material outstanding liabilities for exit costs or involuntary employee termination benefits. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated interim financial statements of Sally Beauty Holdings, Inc. and its subsidiaries included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures included herein are adequate for the interim period presented. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly our consolidated financial position as of December 31, 2023, and September 30, 2023, our consolidated results of operations, consolidated comprehensive income, consolidated statements of stockholders’ equity and consolidated cash flows for the three months ended December 31, 2023 and 2022 . |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated interim financial statements include all accounts of Sally Beauty Holdings, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. All amounts are in U.S. Dollars. |
Accounting Policies | Accounting Policies We adhere to the same accounting policies in the preparation of our condensed consolidated interim financial statements as we do in the preparation of our full year consolidated financial statements. As permitted under GAAP, interim accounting for certain expenses, including income taxes, is based on full-year assumptions. For interim financial reporting purposes, income taxes are recorded based upon our estimated annual effective income tax. |
Use of Estimates | Use of Estimates In order to present our financial statements in conformity with GAAP, we are required to make certain estimates and assumptions that impact our interim financial statements and supplementary disclosures. These estimates may use forecasted financial information based on reasonable information available, however are subject to change in the future. Significant estimates and assumptions are part of our accounting for sales allowances, deferred revenue, valuation of inventory, amortization and depreciation, intangibles and goodwill, and other reserves. We believe these estimates and assumptions are reasonable; however, they are based on management’s current knowledge of events and actions, and changes in facts and circumstances may result in revised estimates and impact actual results. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Changes to Contract Liabilities | Changes to our contract liabilities, which are included in accrued liabilities in our condensed consolidated balance sheets, for the periods were as follows (in thousands): Three Months Ended December 31, 2023 2022 Beginning Balance $ 14,038 $ 13,460 Loyalty points and gift cards issued but not redeemed, net of estimated breakage 9,494 6,291 Revenue recognized from beginning liability ( 7,942 ) ( 4,489 ) Ending Balance $ 15,590 $ 15,262 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities and other fair value disclosures by fair value hierarchy | Financial instruments measured at fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follow: (in thousands) Classification Fair Value Hierarchy Level December 31, September 30, Financial Assets: Foreign exchange contracts Non-designated cash flow hedges Other current assets Level 2 $ 446 $ 1,160 Interest rate swap Other assets Level 2 788 4,668 Total assets $ 1,234 $ 5,828 . Financial Liabilities: Foreign exchange contracts Designated cash flow hedges Accrued liabilities Level 2 $ 1,869 $ — Non-designated cash flow hedges Accrued liabilities Level 2 1,543 397 Total liabilities $ 3,412 $ 397 Other fair value disclosures The carrying amounts of cash equivalents, trade and other accounts receivable, and accounts payable and borrowing under our ABL facility approximate their respective fair values due to the short-term nature of these financial instruments. Carrying amounts and the related estimated fair value of our long-term debt, excluding finance lease obligations, debt issuance costs and original issue discounts, are as follows: December 31, 2023 September 30, 2023 (in thousands) Fair Value Hierarchy Level Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding finance lease obligations Senior notes Level 1 $ 679,961 $ 679,961 $ 679,961 $ 662,962 Term loan B due 2030 Level 2 397,000 397,993 398,000 398,000 Total long-term debt $ 1,076,961 $ 1,077,954 $ 1,077,961 $ 1,060,962 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in accumulated other comprehensive loss | The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Swap Foreign Exchange Contracts Total Balance at September 30, 2023 $ ( 124,846 ) $ 3,716 $ ( 1,634 ) $ ( 122,764 ) Other comprehensive income (loss) before 16,367 ( 2,257 ) ( 3,895 ) 10,215 Reclassification to net earnings, net of tax — ( 831 ) 1,424 593 Balance at December 31, 2023 $ ( 108,479 ) $ 628 $ ( 4,105 ) $ ( 111,956 ) |
Weighted-Average Shares (Tables
Weighted-Average Shares (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic and diluted weighted-average shares | The following table sets forth the reconciliation of basic and diluted weighted-average shares (in thousands): Three Months Ended 2023 2022 Weighted-average basic shares 105,948 107,140 Dilutive securities: Stock option and stock award programs 2,770 2,320 Weighted-average diluted shares 108,718 109,460 Anti-dilutive options excluded from our computation of diluted shares 1,804 2,123 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets Amortization Expense | Three Months Ended (in thousands) 2023 2022 Intangible assets amortization expense $ 860 $ 1,008 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): December 31, September 30, Compensation and benefits $ 49,846 $ 69,915 Deferred revenue 20,422 18,259 Rental obligations 11,368 11,266 Insurance reserves 6,805 6,656 Interest payable 3,898 13,447 Property and other taxes 2,271 2,617 Operating accruals and other 44,963 41,206 Total accrued liabilities $ 139,573 $ 163,366 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) - Foreign Exchange Contract | 3 Months Ended |
Dec. 31, 2023 | |
Schedule of notional amount held through foreign currency forwards, based upon exchange rates | At December 31, 2023, we held forwards, which expire ratably through September 30, 2024, with a notional amount, based upon exchange rates at December 31, 2023 , as follows (in thousands): Notional Currency Notional Amount Mexican Peso $ 16,538 Euro 8,742 Canadian Dollar 8,404 Total $ 33,684 |
Non-Designated Derivative Instruments | |
Schedule of notional amount held through foreign currency forwards, based upon exchange rates | At December 31, 2023, we held forwards, which settle on various dates in the first month of the next two fiscal quarters, with a notional amount, based upon exchange rates at December 31, 2023 , as follows (in thousands): Notional Currency Notional Amount British Pound $ 44,723 Mexican Peso 21,517 Euro 20,679 Canadian Dollar 17,275 Total $ 104,194 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment data | Segment data for the three months ended December 31, 2023 and 2022, is as follows (in thousands): Three Months Ended 2023 2022 Net sales: Sally Beauty Supply ("SBS") $ 523,238 $ 549,472 Beauty Systems Group ("BSG") 408,064 407,583 Total $ 931,302 $ 957,055 Earnings before provision for income taxes: Segment operating earnings: SBS $ 77,629 $ 99,174 BSG 44,627 49,647 Segment operating earnings 122,256 148,821 Unallocated expenses 53,218 51,827 Restructuring ( 85 ) 10,406 Consolidated operating earnings 69,123 86,588 Interest expense 17,314 17,923 Earnings before provision for income taxes $ 51,809 $ 68,665 |
Schedule of disaggregation of segment revenues by merchandise category and sales channels | Disaggregation of net sales by segment Periodically, we make minor adjustments to our product hierarchy, that impacts the roll-up of our merchandise categories. As a result, certain prior year amounts have been reclassified to conform to current year presentation. The following tables disaggregate our segment revenues by merchandise category. Three Months Ended SBS 2023 2022 Hair color 39.1 % 38.7 % Hair care 24.6 % 23.4 % Styling tools and supplies 18.2 % 19.5 % Nail 10.1 % 10.3 % Skin and cosmetics 7.4 % 7.4 % Other beauty items 0.6 % 0.7 % Total 100.0 % 100.0 % Three Months Ended BSG 2023 2022 Hair care 42.9 % 43.5 % Hair color 39.4 % 38.3 % Styling tools and supplies 10.7 % 10.8 % Skin and cosmetics 4.3 % 4.4 % Nail 2.4 % 2.7 % Other beauty items 0.3 % 0.3 % Total 100.0 % 100.0 % The following tables disaggregate our segment revenue by sales channels: Three Months Ended SBS 2023 2022 Company-operated stores 93.3 % 93.6 % E-commerce 6.7 % 6.4 % Total 100.0 % 100.0 % Three Months Ended BSG 2023 2022 Company-operated stores 68.6 % 66.3 % E-commerce 13.8 % 13.6 % Distributor sales consultants 10.6 % 12.6 % Franchise stores 7.0 % 7.5 % Total 100.0 % 100.0 % |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring expense and gains | Restructuring expenses, included in Cost of Goods Sold (“COGS”) and Restructuring for the three months ended December 31, 2023 and 2022, are as follows (in thousands): Three Months Ended 2023 2022 Included in COGS (a) Distribution Center Consolidation and Store Optimization Plan $ — $ ( 2,680 ) Included in Restructuring (b) Distribution Center Consolidation and Store Optimization Plan $ ( 85 ) $ 10,406 (a) Amounts included in COGS relate to adjustments to our expected obsolescence reserve related to the Plan (as defined below). (b) For the three months ended December 31, 2022, restructuring consisted of closing costs related to lease terminations, employee termination benefits and $ 2.1 million in impairment charges. |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Changes to Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Contract with Customer, Liability [Abstract] | ||
Beginning Balance | $ 14,038 | $ 13,460 |
Loyalty points and gift cards issued but not redeemed, net of estimated breakage | 9,494 | 6,291 |
Revenue recognized from beginning liability | (7,942) | (4,489) |
Ending Balance | $ 15,590 | $ 15,262 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Long-term debt, excluding finance lease obligations | ||
Long-term debt, excluding finance lease obligations, Carrying Value | $ 1,076,961 | $ 1,077,961 |
Long-term debt, excluding finance lease obligations, Fair Value | 1,077,954 | 1,060,962 |
Level 1 | Senior notes | ||
Long-term debt, excluding finance lease obligations | ||
Long-term debt, excluding finance lease obligations, Carrying Value | 679,961 | 679,961 |
Long-term debt, excluding finance lease obligations, Fair Value | 679,961 | 662,962 |
Level 2 | Term Loan B Due 2030 | ||
Long-term debt, excluding finance lease obligations | ||
Long-term debt, excluding finance lease obligations, Carrying Value | 397,000 | 398,000 |
Long-term debt, excluding finance lease obligations, Fair Value | 397,993 | 398,000 |
Fair Value, Recurring | ||
Financial Assets: | ||
Total assets | 1,234 | 5,828 |
Financial Liabilities: | ||
Total liabilities | 3,412 | 397 |
Fair Value, Recurring | Level 2 | Other current assets | Non-Designated Derivative Instruments | ||
Financial Assets: | ||
Cash flow hedges | 446 | 1,160 |
Fair Value, Recurring | Level 2 | Other assets | ||
Financial Assets: | ||
Interest rate swap | 788 | 4,668 |
Fair Value, Recurring | Level 2 | Accrued Liabilities | Designated cash flow hedges | ||
Financial Liabilities: | ||
Cash flow hedges | 1,869 | |
Fair Value, Recurring | Level 2 | Accrued Liabilities | Non-Designated Derivative Instruments | ||
Financial Liabilities: | ||
Cash flow hedges | $ 1,543 | $ 397 |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Program (Details) - 2017 Share Repurchase program - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 31, 2017 | |
Share Repurchase Program | ||||
Amount of shares authorized to be repurchased | $ 560,800,000 | $ 1,000,000,000 | ||
Stock repurchase program, expiration date | Sep. 30, 2025 | |||
Number of shares repurchased | 1,900,000 | 0 | ||
Total cost of share repurchased | $ 20,000,000 |
Stockholders' Equity - Change i
Stockholders' Equity - Change in AOCL (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | $ 508,748 |
Balance | 541,340 |
Interest rate swap | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | 3,716 |
Other comprehensive income (loss) before reclassification, net of tax | (2,257) |
Reclassification to net earnings, net of tax | (831) |
Balance | 628 |
Foreign exchange contracts | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (1,634) |
Other comprehensive income (loss) before reclassification, net of tax | (3,895) |
Reclassification to net earnings, net of tax | 1,424 |
Balance | (4,105) |
Foreign currency translation adjustments | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (124,846) |
Other comprehensive income (loss) before reclassification, net of tax | 16,367 |
Balance | (108,479) |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (122,764) |
Other comprehensive income (loss) before reclassification, net of tax | 10,215 |
Reclassification to net earnings, net of tax | 593 |
Balance | $ (111,956) |
Weighted-Average Shares (Detail
Weighted-Average Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share Reconciliation: | ||
Weighted-average basic shares | 105,948 | 107,140 |
Dilutive securities: | ||
Stock option and stock award programs | 2,770 | 2,320 |
Weighted-average diluted shares | 108,718 | 109,460 |
Anti-dilutive options excluded from our computation of diluted shares | 1,804 | 2,123 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2023 | Sep. 30, 2023 | |
Goodwill [Line Items] | ||
Goodwill | $ 536,686,000 | $ 533,081,000 |
Impairment losses in connection with the goodwill | 0 | |
Impairment losses in connection with the other intangible assets | 0 | |
Goodwill, decreased from effects of foreign currency exchange rates | 4,000,000 | |
Intangible assets, decreased from effects of foreign currency exchange rates | 900,000 | |
Sally Beauty Supply | ||
Goodwill [Line Items] | ||
Goodwill | 86,400,000 | |
Beauty Systems Group | ||
Goodwill [Line Items] | ||
Goodwill | 450,300,000 | |
Beauty Systems Group | Discounted Cash Flow | ||
Goodwill [Line Items] | ||
Fair value measurement, percentage | 18% | |
Beauty Systems Group | Discounted Cash Flow | Long-term Revenue Growth Rate | ||
Goodwill [Line Items] | ||
Fair value measurement, percentage | 2% | |
Beauty Systems Group | Discounted Cash Flow | Discount rate | ||
Goodwill [Line Items] | ||
Fair value measurement, percentage | 11.25% | |
Goldwell | ||
Goodwill [Line Items] | ||
Goodwill adjustment related to acquisitions | $ 400,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets amortization expense | $ 860 | $ 1,008 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Accrued Liabilities | ||
Compensation and benefits | $ 49,846 | $ 69,915 |
Deferred revenue | 20,422 | 18,259 |
Rental obligations | 11,368 | 11,266 |
Insurance reserves | 6,805 | 6,656 |
Interest payable | 3,898 | 13,447 |
Property and other taxes | 2,271 | 2,617 |
Operating accruals and other | 44,963 | 41,206 |
Total accrued liabilities | $ 139,573 | $ 163,366 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - (Details) | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) Instrument | Dec. 31, 2022 USD ($) | Jul. 31, 2017 USD ($) Derivative | |
Derivative Instruments | ||||
Number of derivative instruments held | Instrument | 0 | |||
Interest expense | $ 17,314,000 | $ 17,923,000 | ||
Foreign Currency Forwards | Selling, General and Administrative Expenses | ||||
Derivative Instruments | ||||
Foreign currency forwards designated as cash flow hedges to be reclassified in to cost of goods sold | (1,300,000) | 400,000 | ||
Foreign Currency Forwards | Reclassification out of Accumulated Other Comprehensive Income | ||||
Derivative Instruments | ||||
Foreign currency forwards designated as cash flow hedges to be reclassified in to cost of goods sold | (1,400,000) | $ 300,000 | ||
Foreign currency forwards designated as cash flow hedges to be reclassified losses into cost of goods sold over next 12 months | (2,200,000) | |||
Interest Rate Caps | Variable-rate tranche | Sally Holdings, LLC | ||||
Derivative Instruments | ||||
Notional Amount | $ 550,000,000 | |||
Number of interest rate caps | Derivative | 2 | |||
Interest Rate Swap | Sally Holdings, LLC | ||||
Derivative Instruments | ||||
Derivative instruments, expiration date | Apr. 30, 2026 | |||
Term of derivative instrument | 3 years | |||
Notional Amount | $ 200,000,000 | |||
Fixed interest rate | 3.705% | |||
Interest income | 800,000 | |||
Interest rate caps designated as cash flow hedges to be reclassified into interest expense over next 12 months | $ 1,900,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of Notional Amount Held Through Foreign Currency Forwards, Based Upon Exchange Rates (Details) | Dec. 31, 2023 USD ($) |
Foreign Currency Forwards | Designated cash flow hedges | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | $ 33,684,000 |
Foreign Currency Forwards | Non-Designated Derivative Instruments | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 104,194,000 |
British Pound | Non-Designated Derivative Instruments | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 44,723,000 |
Mexican Peso | Designated cash flow hedges | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 16,538,000 |
Mexican Peso | Non-Designated Derivative Instruments | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 21,517,000 |
Euro | Designated cash flow hedges | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 8,742,000 |
Euro | Non-Designated Derivative Instruments | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 20,679,000 |
Canadian Dollar | Designated cash flow hedges | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 8,404,000 |
Canadian Dollar | Non-Designated Derivative Instruments | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | $ 17,275,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Net sales: | ||
Total net sales | $ 931,302 | $ 957,055 |
Segment operating earnings: | ||
Segment operating earnings | 69,123 | 86,588 |
Restructuring | (85) | 10,406 |
Interest expense | 17,314 | 17,923 |
Earnings before provision for income taxes | 51,809 | 68,665 |
Operating segments | ||
Segment operating earnings: | ||
Segment operating earnings | 122,256 | 148,821 |
Corporate | ||
Segment operating earnings: | ||
Unallocated expenses | 53,218 | 51,827 |
Sally Beauty Supply | ||
Net sales: | ||
Total net sales | 523,238 | 549,472 |
Sally Beauty Supply | Operating segments | ||
Segment operating earnings: | ||
Segment operating earnings | 77,629 | 99,174 |
Beauty Systems Group | ||
Net sales: | ||
Total net sales | 408,064 | 407,583 |
Beauty Systems Group | Operating segments | ||
Segment operating earnings: | ||
Segment operating earnings | $ 44,627 | $ 49,647 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Disaggregation of Net Sales by Segment (Details) - Sales Revenue, Net - Product Concentration Risk | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Sally Beauty Supply | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 100% | 100% |
Sally Beauty Supply | Hair color | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 39.10% | 38.70% |
Sally Beauty Supply | Hair care | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 24.60% | 23.40% |
Sally Beauty Supply | Styling tools and supplies | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 18.20% | 19.50% |
Sally Beauty Supply | Nail | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 10.10% | 10.30% |
Sally Beauty Supply | Skin and cosmetics | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 7.40% | 7.40% |
Sally Beauty Supply | Other Beauty items | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 0.60% | 0.70% |
Sally Beauty Supply | Sales channel, directly to consumer | Company-operated stores | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 93.30% | 93.60% |
Sally Beauty Supply | Sales channel, through intermediary | E-commerce | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 6.70% | 6.40% |
Beauty Systems Group | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 100% | 100% |
Beauty Systems Group | Hair color | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 39.40% | 38.30% |
Beauty Systems Group | Hair care | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 42.90% | 43.50% |
Beauty Systems Group | Styling tools and supplies | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 10.70% | 10.80% |
Beauty Systems Group | Nail | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 2.40% | 2.70% |
Beauty Systems Group | Skin and cosmetics | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 4.30% | 4.40% |
Beauty Systems Group | Other Beauty items | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 0.30% | 0.30% |
Beauty Systems Group | Sales channel, directly to consumer | Company-operated stores | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 68.60% | 66.30% |
Beauty Systems Group | Sales channel, through intermediary | Distributor sales consultants | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 10.60% | 12.60% |
Beauty Systems Group | Sales channel, through intermediary | E-commerce | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 13.80% | 13.60% |
Beauty Systems Group | Sales channel, through intermediary | Franchise stores | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of net sales | 7% | 7.50% |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Expense and Gains (Details) - Distribution Center Consolidation and Store Optimization Plan - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Cost And Reserve [Line Items] | ||
Total in COGS | $ (2,680) | |
Total in Restructuring | $ (85) | $ 10,406 |
Restructuring - Summary of Re_2
Restructuring - Summary of Restructuring Expense and Gains (Parenthetical) (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
Distribution Center Consolidation and Store Optimization Plan | |
Restructuring Cost and Reserve [Line Items] | |
Impairment charges related to restructuring | $ 2.1 |