Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Nov. 15, 2019 | Mar. 31, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | Sally Beauty Holdings, Inc. | ||
Entity Central Index Key | 0001368458 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2019 | ||
Trading Symbol | SBH | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 2,202,239,000 | ||
Entity Common Stock, Shares Outstanding | 116,326,372 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Security Exchange Name | NYSE | ||
Title of 12(b) Security | Common Stock | ||
Entity Interactive Data Current | Yes | ||
Entity File Number | 1-33145 | ||
Entity Incorporation, State or Country Code | DE | ||
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 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 71,495 | $ 77,295 |
Trade accounts receivable, net | 43,136 | 48,417 |
Accounts receivable, other | 61,403 | 42,073 |
Inventory | 952,907 | 944,338 |
Other current assets | 34,612 | 42,960 |
Total current assets | 1,163,553 | 1,155,083 |
Property and equipment, net | 319,628 | 308,357 |
Goodwill | 530,786 | 535,925 |
Intangible assets, excluding goodwill, net | 62,051 | 72,698 |
Other assets | 22,428 | 25,351 |
Total assets | 2,098,446 | 2,097,414 |
Current liabilities: | ||
Current maturities of long-term debt | 1 | 5,501 |
Accounts payable | 278,688 | 303,241 |
Accrued liabilities | 169,054 | 180,287 |
Income taxes payable | 8,336 | 2,144 |
Total current liabilities | 456,079 | 491,173 |
Long-term debt | 1,594,542 | 1,768,808 |
Other liabilities | 27,757 | 30,022 |
Deferred income tax liabilities, net | 80,391 | 75,967 |
Total liabilities | 2,158,769 | 2,365,970 |
Stockholders’ deficit: | ||
Common stock, $0.01 par value. Authorized 500,000 shares; 116,986 and 120,145 shares issued and 116,725 and 119,926 shares outstanding at September 30, 2019 and 2018, respectively | 1,167 | 1,199 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Accumulated earnings (deficit) | 55,797 | (179,764) |
Accumulated other comprehensive loss, net of tax | (117,287) | (89,991) |
Total stockholders’ deficit | (60,323) | (268,556) |
Total liabilities and stockholders’ deficit | $ 2,098,446 | $ 2,097,414 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Sep. 30, 2018 |
Statement Of Financial Position [Abstract] | ||
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 | 116,986,000 | 120,145,000 |
Common stock, shares outstanding | 116,725,000 | 119,926,000 |
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 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | |||
Net sales | $ 3,876,411 | $ 3,932,565 | $ 3,938,317 |
Cost of goods sold | 1,965,869 | 1,988,152 | 1,973,422 |
Gross profit | 1,910,542 | 1,944,413 | 1,964,895 |
Selling, general and administrative expenses | 1,452,751 | 1,484,209 | 1,463,619 |
Restructuring | (682) | 33,615 | 22,679 |
Operating earnings | 458,473 | 426,589 | 478,597 |
Interest expense | 96,309 | 98,162 | 132,899 |
Earnings before provision for income taxes | 362,164 | 328,427 | 345,698 |
Provision for income taxes | 90,541 | 70,380 | 130,622 |
Net earnings | $ 271,623 | $ 258,047 | $ 215,076 |
Earnings per share: | |||
Basic | $ 2.27 | $ 2.09 | $ 1.56 |
Diluted | $ 2.26 | $ 2.08 | $ 1.56 |
Weighted average shares: | |||
Basic | 119,636 | 123,190 | 137,533 |
Diluted | 120,283 | 123,832 | 138,176 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net earnings | $ 271,623 | $ 258,047 | $ 215,076 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (22,576) | (10,604) | 19,299 |
Interest rate caps, net of tax | (4,566) | 2,449 | (1,084) |
Foreign exchange contracts, net of tax | (154) | ||
Other comprehensive income (loss), net of tax | (27,296) | (8,155) | 18,215 |
Total comprehensive income | $ 244,327 | $ 249,892 | $ 233,291 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 271,623 | $ 258,047 | $ 215,076 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 107,658 | 108,829 | 112,323 |
Share-based compensation expense | 9,180 | 10,519 | 10,507 |
Amortization of deferred financing costs | 3,786 | 3,832 | 3,264 |
Net loss/(gain) on disposal and impairment of assets | (7,544) | 181 | 8,464 |
Net loss on extinguishment of debt | 951 | 876 | 27,981 |
Deferred income taxes | 5,532 | (20,538) | 14,122 |
Changes in (exclusive of effects of acquisitions): | |||
Trade accounts receivable | 4,399 | (1,949) | 702 |
Accounts receivable, other | (20,432) | 2,743 | (7,520) |
Inventory | (20,272) | (16,450) | (16,343) |
Other current assets | 7,418 | 12,164 | 1,480 |
Other assets | (3,225) | 48 | (6,700) |
Accounts payable and accrued liabilities | (42,719) | 4,592 | (18,779) |
Income taxes payable | 6,144 | (221) | 323 |
Other liabilities | (2,084) | 9,988 | (1,614) |
Net cash provided by operating activities | 320,415 | 372,661 | 343,286 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment | (107,755) | (86,507) | (89,666) |
Proceeds from sales of property and equipment | 15,312 | 369 | 41 |
Acquisitions, net of cash acquired | (3,424) | (9,175) | |
Net cash used by investing activities | (95,867) | (95,313) | (89,625) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 593,504 | 461,819 | 1,277,250 |
Repayments of long-term debt | (777,538) | (558,599) | (1,216,643) |
Debt issuance costs | (1,151) | (8,376) | |
Payments for common stock repurchased | (47,434) | (166,701) | (346,873) |
Proceeds from exercises of stock options | 2,160 | 1,350 | 17,339 |
Net cash used by financing activities | (229,308) | (263,282) | (277,303) |
Effect of foreign exchange rate changes on cash and cash equivalents | (1,040) | (530) | 779 |
Net increase (decrease) in cash and cash equivalents | (5,800) | 13,536 | (22,863) |
Cash and cash equivalents, beginning of period | 77,295 | 63,759 | 86,622 |
Cash and cash equivalents, end of period | 71,495 | 77,295 | 63,759 |
Supplemental Cash Flow Information: | |||
Interest paid | 95,171 | 90,077 | 141,883 |
Income taxes paid | 83,783 | 70,253 | 114,553 |
Capital expenditures incurred but not paid | $ 26,233 | $ 15,315 | $ 8,367 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) |
Balance at Sep. 30, 2016 | $ (276,166) | $ 1,446 | $ (177,561) | $ (100,051) | |
Balance (in shares) at Sep. 30, 2016 | 144,571 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | 215,076 | 215,076 | |||
Other comprehensive income (loss), net of tax | 18,215 | 18,215 | |||
Repurchases of common stock | (346,051) | $ (161) | $ (25,299) | (320,591) | |
Repurchases of common stock (in shares) | (16,072) | ||||
Share-based compensation | 10,507 | $ 1 | 10,506 | ||
Share-based compensation (in shares) | 122 | ||||
Stock issued for stock options | 14,803 | $ 10 | 14,793 | ||
Stock issued for stock options (in shares) | 964 | ||||
Balance at Sep. 30, 2017 | (363,616) | $ 1,296 | (283,076) | (81,836) | |
Balance (in shares) at Sep. 30, 2017 | 129,585 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | 258,047 | 258,047 | |||
Other comprehensive income (loss), net of tax | (8,155) | (8,155) | |||
Repurchases of common stock | (166,701) | $ (100) | (11,866) | (154,735) | |
Repurchases of common stock (in shares) | (9,987) | ||||
Share-based compensation | 10,519 | $ 2 | 10,517 | ||
Share-based compensation (in shares) | 178 | ||||
Stock issued for stock options | 1,350 | $ 1 | 1,349 | ||
Stock issued for stock options (in shares) | 150 | ||||
Balance at Sep. 30, 2018 | $ (268,556) | $ 1,199 | (179,764) | (89,991) | |
Balance (in shares) at Sep. 30, 2018 | 119,926 | 119,926 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings | $ 271,623 | 271,623 | |||
Other comprehensive income (loss), net of tax | (27,296) | (27,296) | |||
Repurchases of common stock | (47,434) | $ (36) | (11,336) | (36,062) | |
Repurchases of common stock (in shares) | (3,562) | ||||
Share-based compensation | 9,180 | $ 2 | 9,178 | ||
Share-based compensation (in shares) | 209 | ||||
Stock issued for stock options | 2,160 | $ 2 | $ 2,158 | ||
Stock issued for stock options (in shares) | 152 | ||||
Balance at Sep. 30, 2019 | $ (60,323) | $ 1,167 | $ 55,797 | $ (117,287) | |
Balance (in shares) at Sep. 30, 2019 | 116,725 | 116,725 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. The consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. The preparation of financial statements in conformity with GAAP requires us to interpret and apply accounting standards and to develop and follow accounting policies consistent with such standards. The following is a summary of the significant accounting policies used in preparing our consolidated financial statements. Use of Estimates In accordance with GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent liabilities in the consolidated financial statements. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. Cash and Cash Equivalents Cash represents currency on hand, debt and credit card receivable and third-party online payment systems transactions, while cash equivalents consist of highly liquid investments which have an original maturity of three months or less. Cash and cash equivalents are stated at cost, which approximates fair value. Trade Accounts Receivable and Accounts Receivable, Other Trade accounts receivable consist of credit extended directly to certain customers who meet our credit requirements in the ordinary course of business and are stated at their carrying values, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is regularly reviewed on the basis of our historical collection data and current customer information. Customer account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At September 30, 2019 and 2018, our allowance for doubtful accounts was $1.7 million and $1.8 million, respectively. Other accounts receivable consist primarily of amounts due from vendors under various contractual agreements and include volume rebates and other promotional considerations. Inventory and Cost of Goods Sold Inventory is stated at the lower of cost (FIFO) or net realizable value. Inventory cost reflects actual product costs, the cost of transportation to our distribution centers and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. When assessing the net realizable value of inventory, we consider several factors including estimates of future demand for our products, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in stock keeping units. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. We have policies and processes in place that are intended to minimize inventory shrinkage. Cost of goods sold includes actual product costs, the cost of transportation to our distribution centers, operating cost associated with our distribution centers (including employee compensation expense, depreciation and amortization, rent and other occupancy-related expenses), vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores. All other shipping and handling costs are included in selling, general and administrative expenses when incurred. We deem cash consideration received from a supplier to be a reduction of the cost of inventory purchased, unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by us in selling the vendor’s products. The majority of cash consideration we receive is considered to be a reduction of inventory and a subsequent reduction in cost of goods sold as the related products are sold. Lease Accounting The majority of our lease agreements are for company-operated stores, warehouse/distribution facilities and office space and are accounted for as operating leases. Rent expense (including any rent abatements or escalation charges) is recognized on a straight-line basis from the date we take possession of the property to begin preparation of the site for occupancy to the end of the lease term, including renewal options that are considered reasonably assured. Certain lease agreements to which we are a party provide for contingent rents that are determined as a percentage of revenues in excess of specified levels. We record a contingent rent liability, along with the corresponding rent expense, when the specified levels of revenue have been achieved or when we determine that achieving the specified levels of revenue during the fiscal year is probable. Certain lease agreements to which we are a party provide for tenant improvement allowances. Tenant improvement allowances are recorded as deferred lease credits, included in accrued liabilities and other liabilities, as appropriate, on our consolidated balance sheets, and amortized on a straight-line basis over the lease term (including renewal options that are determined reasonably assured) as a reduction of rent expense. The amortization period used for deferred lease credits is generally consistent with the amortization period used for the constructed leasehold improvement asset for a given office, store or warehouse facility. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated or amortized over the lesser of the estimated useful lives of the assets or the term of the related lease, including renewals considered reasonably assured. Expenditures for maintenance and repairs are included in selling, general and administrative expenses when incurred, while expenditures for major renewals and improvements that substantially extend the useful life of an asset are capitalized. The following table summarizes our property and equipment balances and their estimated useful lives (dollars in thousands): Life September 30, (in years) 2019 2018 Land N/A $ 10,061 $ 11,130 Buildings and building improvements 5 – 53,132 64,251 Leasehold improvements 2 – 10 281,195 274,848 Furniture, fixtures and equipment 2 – 10 634,525 569,149 Total property and equipment, gross 978,913 919,378 Accumulated depreciation and amortization (659,285 ) (611,021 ) Total property and equipment, net $ 319,628 $ 308,357 Depreciation expense for the fiscal years 2019, 2018 and 2017 was $96.1 million, $97.2 million and $99.2 million, respectively, and is included in selling, general and administrative expenses in our consolidated statements of earnings. Valuation of Long-Lived Assets and Definite-lived Intangible Assets Long-lived assets, such as property and equipment, including store equipment, and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The recoverability of long-lived assets and intangible assets subject to amortization is assessed by comparing the net carrying amount of each asset to the total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. Goodwill and Indefinite-lived Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. G st Components within the same reportable segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. As of September 30, 2019, our reporting units consisted of Sally Beauty Supply (“SBS”) and Beauty Systems Group (“BSG”). We assign goodwill to the reporting unit which consolidates the acquisition. When assessing goodwill for impairment, we perform a quantitative assessment to compare the fair value of each reporting unit to its carrying value, including goodwill. Fair value is measured based on the discounted cash flow method. Based on our assessments, the fair value of each reporting unit exceeded its carrying value, and accordingly, we have not recorded any impairment charges related to goodwill in the current or prior fiscal years presented. Indefinite-lived Intangible Assets Our intangible assets with indefinite lives consist of trade names acquired in business combinations whenever indications of potential impairment exist. When assessing intangible assets with indefinite lives for impairment, we compare the fair value of each asset against its carrying value. Fair value is based on the relief from royalty method. Based Self-Insurance Programs We self-insure the risks related to workers’ compensation, general and auto liability, property and certain employee-related healthcare benefits. We have obtained third-party excess insurance coverage to limit our exposure per occurrence and aggregate cash outlay. We record an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date, which includes claims filed and estimated losses incurred but not yet reported. We estimate the ultimate cost based on an analysis of our historical data and actuarial estimates. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. The current and long-term portions of these liabilities are recorded at their present value and included in accrued liabilities and other liabilities in our consolidated balance sheets, respectively. Revenue Recognition Substantially all of our revenue is derived through the sale of merchandise. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data. Additionally, we have assessed all revenue streams for principal versus agent considerations and have concluded we are the principal for all transactions. See Note 16 for additional information regarding the disaggregation of our sales revenue. Merchandise Revenues The majority of our revenue comes from the sale of products in our company-operated stores. These sales generally have one single performance obligation and the revenue is recognized at the point of sale. However, discounts and incentives issued at the point of sale to entice a customer to a future purchase are treated as a separate performance obligation. As such, we allocate a portion of the revenue generated from the point of sale to each of the additional performance obligations separately using explicitly stated amounts or our best estimate using historical data. We also sell merchandise on our online platforms, to our franchisees and by using distributor sales consultants. These sales generally have one single performance obligation and revenue is recognized upon the shipment of the merchandise. Any shipping and handling fees charged to the customer are recognized as revenue, while any shipping and handling costs to get the merchandise shipped is recognized in cost of goods sold. We extend credit to certain customers, primarily salon professionals, which generally have 30 day payment terms. Based on the nature of theses receivables, no significant financing component exists. Gift Cards The revenue from the sale of our gift cards is recognized at the time the gift card is used to purchase merchandise, which is generally within one year from the date of purchase. Our gift cards do not carry expiration dates or impose post-sale fees. Based on historical experience, a certain amount of our gift cards will not be redeemed, also referred to as “gift card breakage.” We recognize revenue related to gift card breakage within revenue in our consolidated statements of earnings over time proportionately to historical redemption patterns. The gift cards are issued and represent liabilities of either of our operating entities, Sally Beauty Supply LLC or Beauty Systems Group LLC, which are both limited liability companies formed in the state of Virginia. Customer Loyalty Rewards We launched our new Sally Beauty Rewards Loyalty Program nationwide during the first quarter of fiscal year 2019 to the U.S. and Canada, which enables customers to earn points based on their status for every dollar spent on merchandise purchased in our SBS stores and through our sallybeauty.com sallybeauty.com Private Label Credit Card In September 2019, we signed a multi-year agreement with a third-party bank (the “Bank”) to launch a private label credit card (the “Program”). Under the agreement, the Bank will manage and extend credit to our SBS and BSG customers and we will provide licensing to our brand, marketing services and facilitate credit applications. The Bank will be the sole owner of the private label credit card accounts and takes on the risk of default by the private label card holders. As of September 30, 2019, Program operations have not yet commenced. In connection with signing the agreement, we received a refundable payment from the Bank that we recorded as deferred revenue within other liabilities on our consolidated balance sheets and will recognize on a straight-line basis over the initial term of the agreement into net sales in our consolidated statements of earnings. Pursuant to the agreement, the Bank will reimburse us for certain expenses we incur for the launch and marketing of the Program. Amounts reimbursed are recognized in net sales in our consolidated statements of earnings. In addition, we can earn other amounts from the Bank, including incentive payments for achieving performance targets and the activation of credit cards. The following table shows the amount of contract liabilities on our consolidated balance sheets as of September 30, 2019 and 2018 (in thousands): September 30, Contracts Balance Sheet Classification 2019 2018 Gift cards Accrued liabilities $ 4,558 $ 4,144 Rewards loyalty program Accrued liabilities 8,308 1,165 Total liability $ 12,866 $ 5,309 Advertising Costs Advertising costs relate mainly to print advertisements, digital marketing, trade shows and product education for salon professionals. Advertising costs incurred in connection with print advertisements are expensed the first time the advertisement is run. Other advertising costs are expensed when incurred. Advertising costs were $73.3 million, $83.4 million and $82.0 million for the fiscal years 2019, 2018 and 2017, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. Share-based Compensation We measure the cost of services received from our employees and directors in exchange for an award of equity instruments based on the fair value of the award on the date of grant which are expensed ratably over the vesting period. We recognize the impact of forfeitures as they occur. Share-based compensation expense is included in selling, general and administrative expenses in our consolidated statements of earnings. Income Taxes We recognize deferred income taxes for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are anticipated to be recovered or settled. The effect on deferred taxes of a change in income tax rates is recognized in the consolidated statements of earnings in the period of enactment. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that such assets will be realized in full. The estimated tax benefit of an uncertain tax position is recorded in our consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax position will withstand challenge, if any, from applicable taxing authorities. Foreign Currency The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. Foreign currency transaction gains or losses, including changes in the fair value (i.e., marked-to-market adjustments) of certain foreign exchange contracts we hold, are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and were not significant in any of the periods presented in the accompanying consolidated financial statements. |
Accounting Changes and Recent A
Accounting Changes and Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes and Recent Accounting Pronouncements | 3. Accounting Changes In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In connection with the adoption of ASU No. 2014-09, we now present our sales returns allowance on a gross basis rather than a net liability basis. As such, we recognize a return asset from the right to recover merchandise from customers (included in other current assets) and a return liability from the amount to be returned to the customer (included in accrued liabilities) within our consolidated balance sheets. Additionally, we now recognize revenue for our gift cards not expected to be redeemed (“gift card breakage”) within revenue in our consolidated statements of earnings. The following tables set forth the impact of adopting this standard on our consolidated balance sheets as of September 30, 2019 and our consolidated statements of earnings for the fiscal year ended September 30, 2019 (in thousands): Effect of ASU No. 2014-09 Adoption on Consolidated Balance Sheet Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Accounts receivable, other $ 61,403 $ 58,968 $ 2,435 Accrued liabilities $ 169,054 $ 166,619 $ 2,435 Effect of ASU No. 2014-09 Adoption on Consolidated Statement of Earnings Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Net Sales $ 3,876,411 $ 3,876,136 $ 275 Gross Profit 1,910,542 1,910,267 275 Selling, general and administrative expenses $ 1,452,751 $ 1,452,476 $ 275 Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases We have completed a preliminary assessment of the potential impact of adopting ASU No. 2016-02 on our consolidated financial statements. At September 30, 2019, we estimate that the adoption of ASU No. 2016-02 would have resulted in recognition of a lease liability in the estimated amount of approximately $500.0 million and a right-of-use asset for a similar amount, which will be adjusted by reclassifications of existing lease assets and liability, on our consolidated balance sheet. We are currently in the final stages of implementing changes to our processes, controls and systems and expect to be compliant upon required adoption of the new standard. We do not believe adoption of ASU No. 2016-02 will have a material impact on our consolidated results of operations or consolidated cash flows. The amount of the right-of-use asset and the lease liability we ultimately recognize may materially differ from this preliminary estimate, including as a result of future organic growth in our business, changes in interest rates, and potential acquisitions. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Our financial instruments consist of cash equivalents, trade and other accounts receivable, accounts payable, derivative instruments, including foreign exchange contracts and interest rate caps, and debt. The carrying amounts of cash equivalents, trade and other accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. 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 Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data; and Level 3 - Unobservable inputs for the asset or liability. Fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follows (in thousands): As of September 30, Classification Pricing Category 2019 2018 Financial Assets Interest rate caps Other assets Level 2 344 8,367 Financial Liabilities None The fair value for interest rate caps were measured using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Other fair value disclosures Carrying amounts and the related estimated fair value of our long-term debt, excluding capital lease obligations, are as follows: As of September 30, 2019 2018 Pricing Category Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 885,296 898,814 $ 950,000 $ 911,490 Other long-term debt Level 2 724,000 709,830 844,500 824,068 Total debt $ 1,609,296 $ 1,608,644 $ 1,794,500 $ 1,735,558 The fair value of the senior notes was measured using unadjusted quoted market prices. The fair value of other long-term debt was 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. |
Accumulated Stockholders' Defic
Accumulated Stockholders' Deficit | 12 Months Ended |
Sep. 30, 2019 | |
Stockholders Equity Note [Abstract] | |
Accumulated Stockholders' Deficit | 5. Accumulated Stockholders’ Deficit Share Repurchases In August 2017, we announced that the Board approved a share repurchase program authorizing us to repurchase up to $1.0 billion of our common stock over an approximate four-year Accumulated other Comprehensive Loss The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Foreign Exchange Contracts Total Balance at September 30, 2017 $ (80,752 ) $ (1,084 ) $ — $ (81,836 ) Other comprehensive income (loss) before reclassifications, net of tax (10,604 ) 2,449 — (8,155 ) Balance at September 30, 2018 (91,356 ) 1,365 — (89,991 ) Other comprehensive loss before reclassifications, net of tax (22,576 ) (6,167 ) (869 ) (29,612 ) Reclassification to net earnings, net of tax — 1,601 715 2,316 Balance at September 30, 2019 $ (113,932 ) $ (3,201 ) $ (154 ) $ (117,287 ) The tax impact for the changes in other comprehensive loss and the reclassifications to net earnings was not material. |
Weighted-Average Shares
Weighted-Average Shares | 12 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Weighted-Average Shares | 6. Weighted The following table sets forth the computations of basic and diluted earnings per share (in thousands): Fiscal Year Ended September 30, 2019 2018 2017 Weighted average basic shares 119,636 123,190 137,533 Dilutive securities: Stock option and stock award programs 647 642 643 Weighted average diluted shares 120,283 123,832 138,176 At September 30, 2019, 2018 and 2017, options to purchase approximately 4.7 million, 5.2 million and 4.5 million shares, respectively, of our common stock were outstanding but not included in the computation of diluted earnings per share, because these options were anti-dilutive. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Payments | 7. Our Sally Beauty Holdings, Inc. 2019 Omnibus Incentive Plan and the 2010 Omnibus Incentive Plan as amended (the "Omnibus Plans") allows us to grant performance-based awards and service-based awards to its employees up to 8.0 million shares of our common stock. Currently, we have awarded grants to employees and non-employee directors under the terms of the Omnibus Plans. The following table presents total compensation cost for all share-based compensation arrangements, and the related income tax benefits recognized in our consolidated statement of earnings (in thousands): Fiscal Year Ended September 30, 2019 2018 2017 Share-based compensation expense $ 9,180 $ 10,519 $ 10,507 Income tax benefit related to share-based compensation expense $ 2,357 $ 3,013 $ 3,918 The Omnibus Plan award types are as follows: Performance awards: Performance awards vest on the satisfaction of the employee service condition and our level of achievement with respect to certain specified cumulative performance targets, including sales growth and return on invested capital, during the three-year 0% 200% Stock options: Stock option awards are valued using the Black-Scholes option pricing model to estimate the fair value of each stock option award on the date of grant and expense ratably over the vesting period, generally three years. Stock options have a ten year life. Restricted Stock: Restricted stock awards (“RSA”) and restricted stock units (“RSU”) are valued using the closing market price of our common stock on the date of grant. Expense is recognized ratably over the vesting period, generally three years for RSAs and one year for RSUs. An RSA award is an award of our shares that have full voting rights and dividend rights, but are restricted with regard to sale or transfer. These restrictions lapse over the vesting period. RSUs are awarded to our independent directors who may elect, upon receipt of such award, to defer until a later date delivery of the shares of our common stock that would otherwise be issued on the vesting date. RSUs granted prior to the fiscal year 2012, are generally retained by the Company as deferred stock units that are not distributed until six months after the independent director’s service as a director terminates. Performance-Based Awards The following table presents a summary of the activity for our performance awards assuming 100% payout: Performance Awards Number of Shares (in Weighted Average Fair Value Per Share Unvested at September 30, 2018 349 $ 20.88 Granted 230 17.22 Vested (28 ) 22.26 Forfeited (140 ) 20.63 Unvested at September 30, 2019 411 $ 18.83 As of September 30, 2019, the maximum compensation expense that could be potentially recognized in connection with unvested performance awards is approximately $11.6 million, which is expected to be recognized over the weighted average period of 1.9 years. Service-Based Awards Stock Option Awards The following table presents a summary of the activity for our stock option awards: Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 30, 2018 5,405 $ 23.04 5.4 $ 3,161 Granted 948 18.14 Exercised (152 ) 14.34 Forfeited or expired (1,299 ) 24.09 Outstanding at September 30, 2019 4,902 $ 22.08 5.8 $ 670 Exercisable at September 30, 2019 4,054 $ 23.00 5.1 $ 670 The weighted average assumptions used in the Black-Scholes model relating to the valuation of our stock options are as follows: Fiscal Year Ended September 30, 2019 2018 2017 Expected life (in years) 5.0 5.0 5.0 Expected volatility for the Company’s common stock 30.5 % 27.4 % 25.3 % Risk-free interest rate 3.0 % 2.1 % 1.3 % Dividend yield 0.0 % 0.0 % 0.0 % The expected life of options awarded represents the period of time that such options are expected to be outstanding and is based on our historical experience. The risk-free interest rate is based on the zero-coupon U.S. Treasury notes with a term comparable to the expected life of an award at the date of the grant. Since we do not currently expect to pay dividends, the dividend yield used for this purpose is 0% The weighted average fair value per share at the date of grant of the stock options awarded during the fiscal years 2019, 2018 and 2017 was $5.86, $4.84 and $6.37, respectively. The aggregate fair value of stock options that vested during the fiscal years 2019, 2018 and 2017 was $5.1 million, $7.7 million and $13.1 million, respectively. The aggregate intrinsic value of options exercised during the fiscal years 2019, 2018 and 2017 was $0.9 million, $1.3 million and $7.7 million, respectively. The total cash received during the fiscal years 2019, 2018 and 2017 from these option exercises was $2.2 million, $1.4 million and $17.3 million, respectively, and the tax benefit realized for the tax deductions from these option exercises was $0.2 million, $0.3 million and $2.9 million, respectively. At September 30, 2019, approximately $4.4 million of total unrecognized compensation costs related to unvested stock option awards are expected to be recognized over the weighted average period of 1.7 years. R SAs The following table presents a summary of the activity for our RSAs: Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2018 219 $ 16.98 Granted 287 18.14 Vested (169 ) 17.77 Forfeited (75 ) 17.84 Unvested at September 30, 2019 262 $ 17.53 At September 30, 2019, approximately $4.0 million of total unrecognized compensation costs related to unvested RSAs are expected to be recognized over the weighted average period of 1.7 years. RSUs The following table presents a summary of the activity for our RSUs: Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2018 — $ — Granted 88 18.14 Vested (80 ) 18.14 Forfeited (8 ) 18.14 Unvested at September 30, 2019 — $ — At September 30, 2019, all RSUs previously awarded have vested and there are no unrecognized compensation costs in connection therewith. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 8. The changes in the carrying amounts of goodwill during the fiscal years 2019 and 2018 are as follows (in thousands): SBS BSG Total Balance at September 30, 2017 $ 82,670 $ 455,121 $ 537,791 Acquisitions 329 716 1,045 Foreign currency translation (1,782 ) (1,129 ) (2,911 ) Balance at September 30, 2018 $ 81,217 $ 454,708 $ 535,925 Acquisitions 284 — 284 Foreign currency translation (4,596 ) (827 ) (5,423 ) Balance at September 30, 2019 $ 76,905 $ 453,881 $ 530,786 The following table reflects our other intangible assets, excluding goodwill, on our consolidated balance sheets. Once an intangible becomes fully amortized, the original cost and accumulated amortization is removed in the subsequent period. In the table below, prior year amounts for definite-lived intangible assets have been conformed to the current year’s presentation. As of September 30, 2019 and 2018, we had the following (in thousands): September 30, 2019 September 30, 2018 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Definite-lived Intangible assets: Customer relationships $ 43,752 $ (33,192 ) $ 10,560 $ 58,133 $ (41,055 ) $ 17,078 Distribution rights 33,364 (27,477 ) 5,887 40,280 (32,080 ) 8,200 Other intangible assets 6,457 (3,946 ) 2,511 8,956 (5,779 ) 3,177 Total definite-lived intangible assets 83,573 (64,615 ) 18,958 107,369 (78,914 ) 28,455 Indefinite-lived Intangible assets: Trade names 43,093 — 43,093 44,243 — 44,243 Total intangible assets, excluding goodwill, net $ 126,666 $ (64,615 ) $ 62,051 $ 151,612 $ (78,914 ) $ 72,698 Our definite-lived intangible assets are amortized on a straight-line basis over the period that we expected an economic benefit, typically over periods of three to ten years. For the fiscal years ended September 30, 2019, 2018 and 2017, amortization expense related to intangible assets totaled $11.3 million, $11.7 million and $13.1 million, respectively. As of September 30, 2019, the expected future amortization expense related to definite-lived intangible assets is as follows (in thousands): Fiscal Year: 2020 $ 8,669 2021 5,028 2022 2,569 2023 1,472 2024 555 Thereafter 665 $ 18,958 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 9. Accrued liabilities consist of the following (in thousands): September 30, 2019 2018 Compensation and benefits $ 63,005 $ 61,182 Deferred revenue 18,165 18,450 Interest payable 17,951 23,008 Rental obligations 11,670 12,129 Insurance reserves 4,567 4,816 Property and other taxes 3,869 4,607 Loss contingency obligation — 14,294 Operating accruals and other 49,827 41,801 Total accrued liabilities $ 169,054 $ 180,287 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments Leases Our leases relate primarily to retail stores and warehousing properties. At September 30, 2019, future minimum payments, excluding amounts related taxes, insurance, maintenance and special assessments, under non-cancelable operating leases are as follows (in thousands): Fiscal Year: 2020 $ 174,578 2021 136,900 2022 95,918 2023 61,944 2024 33,803 Thereafter 40,545 $ 543,688 Certain of our leases include payments of contingent rent based on a percentage of sales, renewal options and escalation clauses. Contingent rentals were not material for any fiscal years presented. Aggregate rental expense for all operating leases amounted to $250.4 million, $249.8 million and $242.0 million for the fiscal years 2019, 2018 and 2017, respectively. Letters of Credit We had $18.0 million and $18.7 million of outstanding letters of credit as of September 30, 2019 and 2018, respectively. Contingencies Legal Proceedings The Company is, from time to time, involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. Data Security Incidents As previously disclosed, we experienced data security incidents during the fiscal years 2014 and 2015 (together, the “data security incidents”). The data security incidents involved the unauthorized installation of malicious software (“malware”) on our information technology systems, including our point-of-sale systems that may have placed at risk certain payment card data for some transactions. The costs that we have incurred to date in connection with the data security incidents include assessments by payment card networks, professional advisory fees and legal fees relating to investigating and remediating the data security incidents. During the fiscal year 2017, we entered into agreement pursuant to which all existing claims and assessments by certain payment card networks were settled. We received an assessment from another payment card network during fiscal year 2018 in connection with the data security incidents and recognized $7.9 million of expenses. The assessment was based on the network’s claims against our acquiring banks for costs that it asserts its issuing banks incurred in connection with the data security incidents, including incremental counterfeit fraud losses and non-ordinary course operating expenses, such as card reissuance costs. As of September 30, 2018, we had a $14.3 million loss contingency liability related to the data security incidents. During the fiscal year 2019, we paid the full amount of the assessment, and, we believe that, we have no remaining liability related to the data security incidents. Liabilities for loss contingencies, arising from claims, assessments, litigation, fines, penalties, the data security incidents and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. We have no significant liabilities for loss contingencies at September 30, 2019 and 2018, except as disclosed above. |
Debt
Debt | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 11. Short-term Debt In July 2017, we entered into an amended and restated $500 million, five-year At September 30, 2019 and 2018, we did not have any outstanding borrowing under the ABL facility. At September 30, 2019, we had $482.0 million available for borrowing under the ABL facility. Long-term Debt Long-term debt consists of the following (dollars in thousands): September 30, 2019 2018 Interest Rates Term loan B: Variable-rate tranche 424,000 544,500 LIBOR plus 2.25% Fixed-rate tranche 300,000 300,000 4.500% Senior notes due Nov. 2023 197,419 200,000 5.500% Senior notes due Dec. 2025 687,877 750,000 5.625% Total $ 1,609,296 $ 1,794,500 Plus: capital lease obligations 832 883 Less: unamortized debt issuance costs and discount, net 15,585 21,074 Total debt $ 1,594,543 $ 1,774,309 Less: current maturities 1 5,501 Total long-term debt $ 1,594,542 $ 1,768,808 Maturities of our debt, excluding capital leases, are as follows at September 30, 2019 (in thousands): Fiscal Year: 2020-2023 $ — 2024 921,419 Thereafter 687,877 Total $ 1,609,296 Term Loan B In July 2017, we entered into a seven-year During the fiscal year ended September 30, 2019, we paid down $115.0 million aggregate principal amount of our term loan B, in addition to the previously required quarterly payments. In connection with debt repayment, we recognized a $1.4 million loss on the extinguishment of debt from the write-off of unamortized deferred financing costs. In March 2018, the Borrowers entered into an Amendment No. 1 with respect to our term loan B pursuant to which the interest rate spread on the variable-rate tranche was reduced by 25 basis points to LIBOR plus 2.25%. Senior Notes The senior notes due 2023 and the senior notes due 2025, which we refer to collectively as “the senior notes due 2023 and 2025,” are unsecured obligations that are jointly and severally guaranteed by Sally Beauty Holdings, Inc. and Sally Investment, and by each material domestic subsidiary. Interest on the senior notes due 2023 and 2025 is payable semi-annually, during our first and third fiscal quarters. Please see Note 17 for certain condensed financial statement data pertaining to Sally Beauty Holdings, Inc., the Issuers, the guarantor subsidiaries and the non-guarantor subsidiaries. During the fiscal year ended September 30, 2019, we repurchased $62.2 million of our senior notes due 2025 at a weighted-average price of 98.1% and $2.6 million of our senior notes due 2023 at par. As a result, we recognized a $0.5 million gain on the extinguishment of debt, including a gain of approximately $1.2 million from the discount paid under the face value of the accepted 2025 Notes and the write-off of $0.7 million in unamortized deferred financing costs. Covenants The agreements governing our ABL facility, term loan B and the senior notes due 2023 and 2025 contain a customary covenant package that places restrictions on the disposition of assets, the granting of liens and security interests, the prepayment of certain indebtedness, and other matters and customary events of default, including customary cross-default and/or cross-acceleration provisions. As of September 30, 2019, we are in compliance with all debt covenants and all the net assets of our consolidated subsidiaries were unrestricted from transfer. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 12. As of September 30, 2019, we did not purchase or hold any derivative instruments for trading or speculative purposes. See note 4 for the classification and fair value of our derivative instruments. Designated Cash Flow Hedges Foreign Currency Forwards During the fiscal year ended September 30, 2019, we entered into foreign currency forwards to mitigate the exposure to exchange rate changes on inventory purchases in USD by our foreign subsidiaries over fiscal year 2019. As of September 30, 2019, all of our foreign currency forward derivatives instruments had settled. We record, net of income tax, the changes in fair value related to the foreign currency forwards into AOCL and recognize realized gain or loss into cost of goods sold based on inventory turns. As of September 30, 2019 exchange rates, we expect to reclassify approximately $0.3 million into cost of goods sold over the next 12 months. During the fiscal year ended September 30, 2019, we reclassified $0.7 million of net losses into cost of goods sold. 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”). The interest rate caps are made up of individual caplets that expire monthly through June 30, 2023 and are designated as cash flow hedges. During the fiscal year ended September 30, 2019, we dedesignated one interest rate cap and terminated $115.0 million in notional amount, concurrent with the repayment of $115.0 million of the term loan B variable tranche. Subsequently, we redesignated the remaining notional amounts of the interest rate cap. Once we determined the hedged transaction related to $115.0 million of the term loan B variable tranche principal was probable not to occur, we reclassified a loss of $1.2 million from AOCL into interest expense. Furthermore, changes in fair value of the remaining hedged interest rate caps are recorded quarterly, net of income tax, and are included in AOCL. Over the next 12 months, we expect to reclassify approximately $0.6 million into interest expense, which represents the original value of the expiring caplets. During the fiscal year ended September 30, 2019, we reclassified $1.6 million, which includes the $1.2 million loss, out of AOCI into interest expense. Non-Designated Cash Flow Hedges During the fiscal years ended September 30, 2018 and 2017, we used foreign currency forwards to mitigate the exposure to exchange rate changes on inventory purchases in USD by our foreign subsidiaries. We did not have any material non-designated foreign currency forwards during fiscal year 2019. During the fiscal years ended |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan | 12 Months Ended |
Sep. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) and Profit Sharing Plan | 13. We offer 401(k) Plans to our U.S. and Puerto Rico employees who meet certain eligibility requirements. The U.S. 401(k) Plan allows employees to contribute immediately upon hire, while the Puerto Rico 401(k) Plan allows employees to contribute after one year of employment. Under the terms of each 401(k) Plan, employees may contribute a percentage of their annual compensation up to certain maximums, as defined by each 401(k) Plan and by statutory limitations. We currently match a portion of employee contributions, as defined by each 401(k) Plan. We recognized expense of $6.2 million, $6.5 million and $7.1 million in the fiscal years ended September 30, 2019, 2018 and 2017, respectively, related to such matching contributions and these amounts are included in selling, general and administrative expenses in our consolidated statements of earnings. In addition, pursuant to the 401(k) Plans, we may elect to make voluntary profit sharing contributions to the accounts of eligible employees as determined by the Compensation Committee of the Board. During the fiscal years ended September 30, 2019, 2018 and 2017, we did not make a profit sharing contribution to the 401(k) Plans. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. On December 22, 2017, the U.S. enacted comprehensive amendments to the Internal Revenue Code of 1986 (“U.S. Tax Reform”). Among other things, U.S. Tax Reform (a) reduced the federal statutory tax rate for corporate taxpayers, (b) provided for a deemed repatriation of undistributed foreign earnings by U.S. taxpayers and made other fundamental changes on how foreign earnings will be taxed by the U.S. and (c) otherwise modified corporate tax rules in significant ways. Also in December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provided guidance allowing registrants to record provisional amounts, during a specified measurement period, when the necessary information is not available, prepared or analyzed in reasonable detail to account for the impact of U.S. Tax Reform. We have completed our analysis on our provisional calculations within the measurement period provided by SAB 118. As a result, we identified certain immaterial adjustments to our provisional calculations, including a benefit of $3 million related to the transition tax on unremitted earnings of our foreign operations. The U.S. Treasury Department has issued final regulations covering the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of U.S Tax Reform. Certain guidance included in these final regulations is inconsistent with our interpretation of the enacted tax law that led to the recognition of a $2.5 million benefit in the first quarter of the current fiscal year. Notwithstanding this inconsistency, we remain confident in our interpretation of the Internal Revenue Code and intend to defend this position through litigation, if necessary. However, if we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit. Beginning with our first quarter of fiscal year 2019, we are subject to taxation on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. We have made the policy election to record this tax as a period cost at the time it is incurred. The impact from GILTI was immaterial for fiscal year 2019. The provision for income taxes for the fiscal years 2019, 2018 and 2017 consists of the following (in thousands): Fiscal Year Ended September 30, 2019 2018 2017 Current: Federal $ 59,855 $ 68,608 $ 97,332 Foreign 10,132 11,039 10,394 State 15,339 11,344 8,700 Total current portion 85,326 90,991 116,426 Deferred: Federal 4,905 (26,001 ) 14,559 Foreign (1,498 ) 1,868 (2,314 ) State 1,808 3,522 1,951 Total deferred portion 5,215 (20,611 ) 14,196 Total provision for income taxes $ 90,541 $ 70,380 $ 130,622 The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below: Fiscal Year Ended September 30, 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 24.5 % 35.0 % State income taxes, net of federal tax benefit 3.4 3.2 2.2 Effect of foreign operations — 0.6 0.3 Deferred tax revaluation, including adoption of income tax method changes — (11.5 ) — Deemed repatriation tax (0.3 ) 3.6 — Other, net 0.9 1.0 0.3 Effective tax rate 25.0 % 21.4 % 37.8 % The tax effects of temporary differences that give rise to our deferred tax assets and liabilities are as follows (in thousands): September 30, 2019 2018 Deferred tax assets attributable to: Foreign loss carryforwards $ 27,097 $ 28,612 Accrued liabilities 12,248 15,676 Share-based compensation expense 9,494 10,762 U.S. foreign tax credits 8,807 8,807 Unrecognized tax benefits 320 322 Inventory adjustments 1,242 — Other 651 442 Total deferred tax assets 59,859 64,621 Valuation allowance (38,287 ) (40,906 ) Total deferred tax assets, net 21,572 23,715 Deferred tax liabilities attributable to: Depreciation and amortization 94,920 92,531 Inventory adjustments — 673 Total deferred tax liabilities 94,920 93,204 Net deferred tax liability $ 73,348 $ 69,489 We believe that it is more-likely-than-not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets, net of the valuation allowance. We have recorded a valuation allowance to account for uncertainties regarding recoverability of certain deferred tax assets, primarily foreign loss carry-forwards. Domestic earnings before provision for income taxes were $328.3 million, $300.4 million and $332.5 million in the fiscal years 2019, 2018 and 2017, respectively. Foreign operations had earnings before provision for income taxes of $33.9 million, $28.0 million and $13.2 million in the fiscal years 2019, 2018 and 2017, respectively. Tax reserves are evaluated and adjusted as appropriate, while taking into account the progress of audits by various taxing jurisdictions and other changes in relevant facts and circumstances evident at each balance sheet date. We do not expect the outcome of current or future tax audits to have a material adverse effect on our consolidated financial condition, results of operations or cash flow. As of September 30, 2019, no deferred taxes have been provided on the accumulated undistributed earnings of our foreign operations beyond the amounts recorded for deemed repatriation of such earnings, as required by U.S. Tax Reform. An actual repatriation of earnings from our foreign operations could still be subject to additional foreign withholding taxes and U.S. state taxes. Based upon evaluation of our foreign operations, undistributed earnings are intended to remain permanently reinvested to finance anticipated future growth and expansion, and accordingly, deferred taxes have not been provided. If undistributed earnings of our foreign operations were not considered permanently reinvested as of September 30, 2019, an immaterial amount of additional deferred taxes would have been provided. At September 30, 2019 and 2018, we had total operating loss carry-forwards of $97.3 million and $103.0 million, respectively, of which $79.0 million and $88.6 million, respectively, are subject to a valuation allowance. At September 30, 2019, operating loss carry-forwards of $7.7 million expire between 2020 and 2031 and operating loss carry-forwards of $89.5 million have no expiration date. At September 30, 2019 and 2018, we had tax credit carry-forwards of $11.2 million and $11.6 million, respectively, This includes a U.S. foreign tax credit carry-forward of $8.8 million as a result of the deemed repatriation tax under U.S. Tax Reform. This credit expires in 2028. We do not believe the realization of the U.S. foreign tax credit is more likely than not, so a valuation allowance has been recorded against its full value. Of the remaining tax credit carry-forwards, at September 30, 2019, $1.1 million expire between 2025 and 2028, and $1.3 million have no expiration date. Total tax credit carry-forwards of $10.1 million and $10.2 million are subject to a valuation allowance at September 30, 2019 and 2018, respectively. The changes in the amount of unrecognized tax benefits are as follows (in thousands): Fiscal Year Ended September 30, 2019 2018 Balance at beginning of the fiscal year $ 1,368 $ 1,467 Increases related to prior year tax positions — — Decreases related to prior year tax positions (4 ) (3 ) Increases related to current year tax positions 954 309 Lapse of statute (318 ) (405 ) Balance at end of fiscal year $ 2,000 $ 1,368 If recognized, these positions would affect our effective tax rate. We recognize interest and penalties, accrued in connection with unrecognized tax benefits, in provision for income taxes. Accrued interest and penalties, in the aggregate, were $0.2 million at September 30, 2019 and 2018. Because existing tax positions will continue to generate increased liabilities for unrecognized tax benefits over the next 12 months, and the fact that from time to time our tax returns are routinely under audit by various taxing authorities, it is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months. An estimate of the amount of such change, or a range thereof, cannot reasonably be made at this time. However, we do not expect the change, if any, to have a material effect on our consolidated financial condition or results of operations within the next 12 months. Our consolidated federal income tax return for the fiscal year ended September 30, 2018 is currently under IRS examination. Our statute remains open for the fiscal year ended September 30, 2015 forward. Our U.S. state and foreign income tax returns are impacted by various statutes of limitations, which are generally open from 2014 forward. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | 15. In the fiscal year ended September 30, 2018, we acquired certain assets and business operations of H. Chalut, Ltee. (“Chalut”), a distributor of beauty products with 21 stores operating in the province of Quebec, Canada, for approximately $8.8 million. This acquisition was accounted for using the acquisition method of accounting for business combinations and funded by cash from operations and borrowing under the ABL facility. The results of operations of Chalut are included in our BSG reportable segment subsequent to the acquisition date. We recorded intangible assets subject to amortization of $4.7 million and goodwill of $0.7 million, which is expected to be deductible for tax purposes, in connection with this acquisition. The goodwill in connection with the acquisition was assigned to our BSG reportable segment. The acquisition of Chalut was not material to the results of operations. For the fiscal years ended September 30, 2019 and 2017, we did not acquire any substantial businesses. |
Segments and Disaggregated Reve
Segments and Disaggregated Revenue | 12 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segments and Disaggregated Revenue | 16. Our segments are defined on how our chief operating decision maker, which we consider the Chief Executive Officer and Chief Financial Officer together, regularly reviews performance and allocates resources to our operating segments, which relies on internal management reporting. We then aggregate operating segments based on the nature of the customer base and method used to distribute products into reportable segments. Our business is organized into two reportable segments: (i) SBS, a domestic and international chain of retail stores and a consumer-facing e-commerce website that offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America and (ii) BSG, including its franchise-based business Armstrong McCall, a full service distributor of beauty products and supplies that offers professional beauty products directly to salons and salon professionals through its professional-only stores, e-commerce platforms and its own sales force in partially exclusive geographical territories in the U.S. and Canada. The accounting policies of both of our reportable segments are the same as described in the summary of significant accounting policies contained in Note 2. Sales between segments, which were eliminated in consolidation, were not material for the fiscal years ended September 30, 2019, 2018 and 2017. Business Segments Information Segment data for the fiscal years 2019, 2018 and 2017 are as follows (in thousands): 2019 2018 2017 Net sales (for the fiscal year indicated): SBS $ 2,293,094 $ 2,333,838 $ 2,345,116 BSG 1,583,317 1,598,727 1,593,201 Total $ 3,876,411 $ 3,932,565 $ 3,938,317 Earnings before provision for income taxes: Segment operating earnings: SBS $ 366,412 $ 362,853 $ 385,407 BSG 239,572 240,225 254,691 Segment operating earnings 605,984 603,078 640,098 Unallocated expenses (148,193 ) (142,874 ) (138,822 ) Restructuring 682 (33,615 ) (22,679 ) Consolidated operating earnings 458,473 426,589 478,597 Interest expense (96,309 ) (98,162 ) (132,899 ) Earnings before provision for income taxes $ 362,164 $ 328,427 $ 345,698 Depreciation and amortization: SBS $ 65,561 $ 64,017 $ 63,427 BSG 28,568 29,733 31,755 Corporate 13,529 15,079 17,141 Total $ 107,658 $ 108,829 $ 112,323 Payments for property and equipment: SBS $ 69,802 $ 46,289 $ 52,178 BSG 18,997 16,598 19,335 Corporate 18,956 23,620 18,153 Total $ 107,755 $ 86,507 $ 89,666 Total assets (as of September 30): SBS $ 973,304 $ 995,546 $ 1,025,545 BSG 1,012,336 993,122 964,984 Sub-total 1,985,640 1,988,668 1,990,529 Corporate 112,806 108,746 108,478 Total $ 2,098,446 $ 2,097,414 $ 2,099,007 Unallocated expenses consist of corporate and shared costs and are included in selling, general and administrative expenses in our consolidated statements of earnings. In the fiscal years 2019, 2018, and 2017, no single customer accounted for 10% or more of revenue. Geographic Area Information Certain geographic data is as follows (in thousands): 2019 2018 2017 Net sales (for the fiscal year indicated): United States $ 3,169,821 $ 3,188,993 $ 3,248,662 Other countries 706,590 743,572 689,655 Total $ 3,876,411 $ 3,932,565 $ 3,938,317 Long-lived assets (as of September 30): United States $ 259,815 $ 234,475 $ 230,698 United Kingdom 24,476 29,493 32,771 Other countries 35,337 44,389 50,248 Total $ 319,628 $ 308,357 $ 313,717 Disaggregated Revenues The following tables disaggregate our segment revenues by merchandise category: Fiscal Year Ended September 30, SBS 2019 2018 2017 Hair color 29.4 % 26.9 % 26.0 % Hair care 20.4 % 20.9 % 21.1 % Skin and nail care 14.8 % 15.7 % 15.7 % Styling tools 13.5 % 13.9 % 14.1 % Multicultural products 7.1 % 7.5 % 7.9 % Salon supplies and accessories 6.6 % 7.1 % 7.3 % Other beauty items 8.2 % 8.0 % 7.9 % Total 100.0 % 100.0 % 100.0 % Fiscal Year Ended September 30, BSG 2019 2018 2017 Hair color 39.5 % 38.4 % 37.0 % Hair care 35.1 % 33.7 % 34.4 % Skin and nail care 8.1 % 8.7 % 9.0 % Styling tools 3.4 % 3.9 % 4.2 % Other beauty items 6.3 % 6.7 % 6.9 % Promotional items 7.6 % 8.6 % 8.5 % Total 100.0 % 100.0 % 100.0 % The following table disaggregates our segment revenue by sales channels: SBS BSG Fiscal Year Ended September 30, Fiscal Year Ended September 30, 2019 2018 2017 2019 2018 2017 Company-operated stores 96.9 % 97.5 % 98.1 % 69.4 % 68.7 % 68.4 % E-commerce 2.8 % 2.2 % 1.6 % 4.8 % 3.7 % 3.3 % Franchise stores 0.3 % 0.3 % 0.3 % 7.6 % 7.7 % 7.7 % Distributor sales consultants — — — 18.2 % 19.9 % 20.6 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % |
Separate Financial Information
Separate Financial Information of Guarantor Subsidiaries | 12 Months Ended |
Sep. 30, 2019 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Separate Financial Information of Guarantor Subsidiaries | 17. Separate Financial Information of Certain 100% wholly owned domestic subsidiaries (“guarantor subsidiaries”), as defined in our credit agreements, of Sally Beauty serve as guarantors to the ABL facility, term loan B and senior notes due 2023 and 2025. The guarantees related to these debt instruments are full and unconditional, joint and several and have certain restrictions on the ability to pay restricted payments to Sally Beauty Holdings, Inc. (“parent”). Certain other subsidiaries, including our foreign subsidiaries, do not serve as guarantors (“non-guarantor subsidiaries”). The following condensed consolidating financial information represents financial information for (i) parent, (ii) Sally Holdings and Sally Capital Inc., (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries, (v) elimination entries necessary for consolidation purposes, and (vi) Sally Beauty on a consolidated basis. Condensed Consolidating Balance Sheet September 30, 2019 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Trade and other accounts receivable, net — — 65,746 38,793 — 104,539 Due from affiliates — — 2,878,072 — (2,878,072 ) — Inventory — — 722,830 230,077 — 952,907 Other current assets 1,436 132 22,480 10,564 — 34,612 Property and equipment, net 6 — 258,132 61,490 — 319,628 Investment in subsidiaries 1,621,843 4,374,334 385,629 — (6,381,806 ) — Goodwill and other intangible assets, net — — 452,645 140,192 — 592,837 Other assets 1,446 3,499 (581 ) 18,064 — 22,428 Total assets $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 48 $ — $ 235,940 $ 42,700 $ — $ 278,688 Due to affiliates 1,672,322 1,142,324 — 63,426 (2,878,072 ) — Accrued liabilities 188 17,937 121,375 29,554 — 169,054 Income taxes payable 6,055 2,161 1 119 — 8,336 Long-term debt — 1,593,710 1 832 — 1,594,543 Other liabilities 6,441 — 17,639 3,677 — 27,757 Deferred income tax liabilities, net — — 76,672 3,719 — 80,391 Total liabilities 1,685,054 2,756,132 451,628 144,027 (2,878,072 ) 2,158,769 Total stockholders’ (deficit) equity (60,323 ) 1,621,843 4,374,334 385,629 (6,381,806 ) (60,323 ) Total liabilities and stockholders’ (deficit) equity $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 Condensed Consolidating Balance Sheet September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Trade and other accounts receivable, net 4 — 53,295 37,191 — 90,490 Due from affiliates — — 2,598,681 — (2,598,681 ) — Inventory — — 714,000 230,338 — 944,338 Other current assets 2,010 111 27,422 13,417 — 42,960 Property and equipment, net 8 — 232,941 75,408 — 308,357 Investment in subsidiaries 1,368,927 4,044,669 380,166 — (5,793,762 ) — Goodwill and other intangible assets, net — — 459,348 149,275 — 608,623 Other assets 1,325 10,242 (4,797 ) 18,581 — 25,351 Total assets $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 38 $ — $ 233,936 $ 69,267 $ — $ 303,241 Due to affiliates 1,629,411 888,141 — 81,129 (2,598,681 ) — Accrued liabilities 234 23,019 125,179 31,855 — 180,287 Income taxes payable 585 1,519 — 40 — 2,144 Long-term debt — 1,773,426 1 882 — 1,774,309 Other liabilities 10,562 — 15,250 4,210 — 30,022 Deferred income tax liabilities, net — — 71,071 4,896 — 75,967 Total liabilities 1,640,830 2,686,105 445,437 192,279 (2,598,681 ) 2,365,970 Total stockholders’ (deficit) equity (268,556 ) 1,368,927 4,044,669 380,166 (5,793,762 ) (268,556 ) Total liabilities and stockholders’ (deficit) equity $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,131,360 $ 745,051 $ — $ 3,876,411 Related party sales — — 2,201 — (2,201 ) — Cost of goods sold — — 1,568,663 399,407 (2,201 ) 1,965,869 Gross profit — — 1,564,898 345,644 — 1,910,542 Selling, general and administrative expenses 11,331 607 1,135,926 304,887 — 1,452,751 Restructuring — — (682 ) — — (682 ) Operating earnings (loss) (11,331 ) (607 ) 429,654 40,757 — 458,473 Interest expense (income) — 96,464 5 (160 ) — 96,309 Earnings (loss) before provision for income taxes (11,331 ) (97,071 ) 429,649 40,917 — 362,164 Provision (benefit) for income taxes (2,742 ) (24,888 ) 109,230 8,941 — 90,541 Equity in earnings of subsidiaries, net of tax 280,212 352,395 31,976 — (664,583 ) — Net earnings 271,623 280,212 352,395 31,976 (664,583 ) 271,623 Other comprehensive loss, net of tax — (4,566 ) — (22,730 ) — (27,296 ) Total comprehensive income (loss) $ 271,623 $ 275,646 $ 352,395 $ 9,246 $ (664,583 ) $ 244,327 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,152,120 $ 780,445 $ — $ 3,932,565 Related party sales — — 2,294 — (2,294 ) — Cost of goods sold — — 1,581,385 409,061 (2,294 ) 1,988,152 Gross profit — — 1,573,029 371,384 — 1,944,413 Selling, general and administrative expenses 10,957 1,538 1,136,312 335,402 — 1,484,209 Restructuring — — 33,615 — — 33,615 Operating earnings (loss) (10,957 ) (1,538 ) 403,102 35,982 — 426,589 Interest expense (income) — 98,332 (3 ) (167 ) — 98,162 Earnings (loss) before provision for income taxes (10,957 ) (99,870 ) 403,105 36,149 — 328,427 Provision (benefit) for income taxes (2,734 ) (28,787 ) 73,747 28,154 — 70,380 Equity in earnings of subsidiaries, net of tax 266,270 337,353 7,995 — (611,618 ) — Net earnings 258,047 266,270 337,353 7,995 (611,618 ) 258,047 Other comprehensive income (loss), net of tax — 2,449 — (10,604 ) — (8,155 ) Total comprehensive income (loss) $ 258,047 $ 268,719 $ 337,353 $ (2,609 ) $ (611,618 ) $ 249,892 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,209,039 $ 729,278 $ — $ 3,938,317 Related party sales — — 2,501 — (2,501 ) — Cost of goods sold — — 1,590,184 385,739 (2,501 ) 1,973,422 Gross profit — — 1,621,356 343,539 — 1,964,895 Selling, general and administrative expenses 10,939 526 1,130,615 321,539 — 1,463,619 Restructuring — — 22,679 — — 22,679 Operating earnings (loss) (10,939 ) (526 ) 468,062 22,000 — 478,597 Interest expense — 132,696 6 197 — 132,899 Earnings (loss) before provision for income taxes (10,939 ) (133,222 ) 468,056 21,803 — 345,698 Provision (benefit) for income taxes (4,246 ) (51,726 ) 177,383 9,211 — 130,622 Equity in earnings of subsidiaries, net of tax 221,769 303,265 12,592 — (537,626 ) — Net earnings 215,076 221,769 303,265 12,592 (537,626 ) 215,076 Other comprehensive income (loss), net of tax — (1,084 ) — 19,299 — 18,215 Total comprehensive income $ 215,076 $ 220,685 $ 303,265 $ 31,891 $ (537,626 ) $ 233,291 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 2,364 $ (70,150 ) $ 373,313 $ 14,888 $ — $ 320,415 Cash Flows from Investing Activities: Payments for property and equipment, net (1 ) — (79,379 ) (13,063 ) — (92,443 ) Acquisitions, net of cash acquired — — (2,584 ) (840 ) — (3,424 ) Due from affiliates — — (279,391 ) — 279,391 — Net cash used by investing activities (1 ) — (361,354 ) (13,903 ) 279,391 (95,867 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 593,500 4 — — 593,504 Repayments of long-term debt — (777,533 ) (4 ) (1 ) — (777,538 ) Payments for common stock repurchased (47,434 ) — — — — (47,434 ) Proceeds from exercises of stock options 2,160 — — — — 2,160 Due to affiliates 42,911 254,183 — (17,703 ) (279,391 ) — Net cash provided (used) by financing activities (2,363 ) 70,150 — (17,704 ) (279,391 ) (229,308 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (1,040 ) — (1,040 ) Net increase (decrease) in cash and cash equivalents — — 11,959 (17,759 ) — (5,800 ) Cash and cash equivalents, beginning of period — 10 29,050 48,235 — 77,295 Cash and cash equivalents, end of period $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Condensed Consolidating Statement of Cash Flows September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 23,424 $ (62,948 ) $ 384,958 $ 27,227 $ — $ 372,661 Cash Flows from Investing Activities: Payments for property and equipment, net — — (68,689 ) (17,449 ) — (86,138 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (309,310 ) — 309,310 — Net cash used by investing activities — — (377,999 ) (26,624 ) 309,310 (95,313 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 461,814 5 — — 461,819 Repayments of long-term debt — (558,000 ) (4 ) (595 ) — (558,599 ) Debt issuance cost — (1,151 ) — — — (1,151 ) Payments for common stock repurchased (166,701 ) — — — — (166,701 ) Proceeds from exercises of stock options 1,350 — — — — 1,350 Due to affiliates 141,927 160,285 — 7,098 (309,310 ) — Net cash provided (used) by financing activities (23,424 ) 62,948 1 6,503 (309,310 ) (263,282 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (530 ) — (530 ) Net increase in cash and cash equivalents — — 6,960 6,576 — 13,536 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 4,095 $ (72,779 ) $ 386,604 $ 25,366 $ — $ 343,286 Cash Flows from Investing Activities: Payments for property and equipment, net — — (64,000 ) (25,625 ) — (89,625 ) Due from affiliates — — (322,866 ) — 322,866 — Net cash used by investing activities — — (386,866 ) (25,625 ) 322,866 (89,625 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 1,277,250 — — — 1,277,250 Repayments of long-term debt — (1,215,940 ) (16 ) (687 ) — (1,216,643 ) Debt issuance costs — (8,376 ) — — — (8,376 ) Payments for common stock repurchased (346,873 ) — — — — (346,873 ) Proceeds from exercises of stock options 17,339 — — — — 17,339 Due to affiliates 325,439 (8,517 ) — 5,944 (322,866 ) — Net cash provided (used) by financing activities (4,095 ) 44,417 (16 ) 5,257 (322,866 ) (277,303 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — 779 — 779 Net increase (decrease) in cash and cash equivalents — (28,362 ) (278 ) 5,777 — (22,863 ) Cash and cash equivalents, beginning of period — 28,372 22,368 35,882 — 86,622 Cash and cash equivalents, end of period $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 |
Restructuring
Restructuring | 12 Months Ended |
Sep. 30, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 18. Restructuring expense and gains for the fiscal years ended September 30, 2019, 2018 and 2017, are as follows (in thousands): 2019 2018 2017 Supply Chain Modernization $ (4,662 ) $ — $ — 2018 Restructuring Plan 3,980 33,615 — 2017 Restructuring Plan — — 22,679 Total expense (gain) $ (682 ) $ 33,615 $ 22,679 Supply Chain Modernization In February 2019, we announced that we were assessing our supply chain in an effort to minimize out-of-stocks, optimize inventory levels, reduce costs and explore new replenishment and fulfillment options. As part of our supply chain modernization plans, we sold our secondary headquarters and fulfillment center in Denton, Texas, and our Marinette, Wisconsin, fulfillment facility, anticipate closing other select distribution centers and upgrading our e-commerce capabilities. Additionally, we will be opening a new automated and concentrated distribution center which will service SBS stores and e-commerce sales, as well as BSG stores, full service sales and e-commerce sales in fiscal year 2020. The liability related to the supply chain modernization, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): Supply Chain Modernization Liability at September 30, 2018 Expenses Cash Payments Adjustments Liability at September 30, 2019 Workforce reductions $ — $ 2,502 $ 1,848 $ — $ 654 Facility closures — 1,021 817 — 204 Other — 224 224 — — Total $ — $ 3,747 $ 2,889 $ — $ 858 Expenses incurred during the fiscal year ended September 30, 2019, represent costs incurred by SBS of $1.5 million, BSG of $1.5 million and corporate of $0.7 million. The above table does not include an $8.4 million gain from selling our secondary headquarters and fulfillment center in Denton, Texas, and our fulfillment center in Marinette, Wisconsin. 2018 Restructuring Plan In November 2017, our Board of Directors approved a restructuring plan (the “2018 Restructuring Plan”) focused primarily on significantly improving the profitability of our international businesses, with particular focus on our European operations. In April 2018, we announced an expansion of the 2018 Restructuring Plan that contained cost reduction initiatives designed to help fund important long-term growth initiatives. The expansion to the 2018 Restructuring Plan included headcount reductions primarily at our corporate headquarters in Denton, Texas. As of December 31, 2018, the 2018 Restructuring Plan was substantially complete and we do not anticipate any additional material costs for the 2018 Restructuring Plan. The liability related to the 2018 Restructuring Plan, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): 2018 Restructuring Plan Liability at September 30, 2018 Expenses Cash Payments Adjustments Liability at September 30, 2019 Workforce reductions $ 3,444 $ 643 $ 4,087 $ — $ — Consulting 3,087 2,502 5,589 — — Other 2,266 835 3,031 — 70 Total $ 8,797 $ 3,980 $ 12,707 $ — $ 70 Expenses incurred during the fiscal year ended September 30, 2019, represent costs incurred by SBS of $1.1 million and corporate of $2.8 million. 2017 Restructuring Plan In January 2017, the Board approved a restructuring plan (the “2017 Restructuring Plan”) for our businesses that included the closure of four administrative offices in the U.S. and Canada, reductions in both salaried and hourly workforce and certain other cost reduction activities. In addition, we expanded the 2017 Restructuring Plan to encompass some other underperforming international operations. There was no material liability for the 2017 Restructuring Plan as of September 30, 2019. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Sep. 30, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 19. Certain unaudited quarterly consolidated statement of earnings information for the fiscal years ended September 30, 2019 and 2018 is summarized below (in thousands, except per share data): 1 st 2 nd 3 rd 4 th Fiscal Year Quarter Quarter Quarter Quarter 2019: Net sales $ 989,453 $ 945,852 $ 975,169 $ 965,937 Gross profit $ 480,705 $ 468,324 $ 482,222 $ 479,291 Net earnings $ 65,727 $ 65,725 $ 71,164 $ 69,007 Earnings per share (a) Basic $ 0.55 $ 0.55 $ 0.59 $ 0.58 Diluted $ 0.54 $ 0.54 $ 0.59 $ 0.58 2018: Net sales $ 994,964 $ 975,321 $ 996,283 $ 965,997 Gross profit $ 486,629 $ 486,322 $ 493,370 $ 478,092 Net earnings $ 83,264 $ 61,371 $ 58,226 $ 55,186 Earnings per share (a) Basic $ 0.65 $ 0.49 $ 0.48 $ 0.46 Diluted $ 0.65 $ 0.49 $ 0.48 $ 0.46 (a) The sum of the quarterly earnings per share may not equal the full year amount due to rounding of the calculated amounts. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates In accordance with GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent liabilities in the consolidated financial statements. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash represents currency on hand, debt and credit card receivable and third-party online payment systems transactions, while cash equivalents consist of highly liquid investments which have an original maturity of three months or less. Cash and cash equivalents are stated at cost, which approximates fair value. |
Trade Accounts Receivable and Accounts Receivable, Other | Trade Accounts Receivable and Accounts Receivable, Other Trade accounts receivable consist of credit extended directly to certain customers who meet our credit requirements in the ordinary course of business and are stated at their carrying values, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is regularly reviewed on the basis of our historical collection data and current customer information. Customer account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At September 30, 2019 and 2018, our allowance for doubtful accounts was $1.7 million and $1.8 million, respectively. Other accounts receivable consist primarily of amounts due from vendors under various contractual agreements and include volume rebates and other promotional considerations. |
Inventory and Cost of Goods Sold | Inventory and Cost of Goods Sold Inventory is stated at the lower of cost (FIFO) or net realizable value. Inventory cost reflects actual product costs, the cost of transportation to our distribution centers and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. When assessing the net realizable value of inventory, we consider several factors including estimates of future demand for our products, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in stock keeping units. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. We have policies and processes in place that are intended to minimize inventory shrinkage. Cost of goods sold includes actual product costs, the cost of transportation to our distribution centers, operating cost associated with our distribution centers (including employee compensation expense, depreciation and amortization, rent and other occupancy-related expenses), vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores. All other shipping and handling costs are included in selling, general and administrative expenses when incurred. We deem cash consideration received from a supplier to be a reduction of the cost of inventory purchased, unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by us in selling the vendor’s products. The majority of cash consideration we receive is considered to be a reduction of inventory and a subsequent reduction in cost of goods sold as the related products are sold. |
Lease Accounting | Lease Accounting The majority of our lease agreements are for company-operated stores, warehouse/distribution facilities and office space and are accounted for as operating leases. Rent expense (including any rent abatements or escalation charges) is recognized on a straight-line basis from the date we take possession of the property to begin preparation of the site for occupancy to the end of the lease term, including renewal options that are considered reasonably assured. Certain lease agreements to which we are a party provide for contingent rents that are determined as a percentage of revenues in excess of specified levels. We record a contingent rent liability, along with the corresponding rent expense, when the specified levels of revenue have been achieved or when we determine that achieving the specified levels of revenue during the fiscal year is probable. Certain lease agreements to which we are a party provide for tenant improvement allowances. Tenant improvement allowances are recorded as deferred lease credits, included in accrued liabilities and other liabilities, as appropriate, on our consolidated balance sheets, and amortized on a straight-line basis over the lease term (including renewal options that are determined reasonably assured) as a reduction of rent expense. The amortization period used for deferred lease credits is generally consistent with the amortization period used for the constructed leasehold improvement asset for a given office, store or warehouse facility. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated or amortized over the lesser of the estimated useful lives of the assets or the term of the related lease, including renewals considered reasonably assured. Expenditures for maintenance and repairs are included in selling, general and administrative expenses when incurred, while expenditures for major renewals and improvements that substantially extend the useful life of an asset are capitalized. The following table summarizes our property and equipment balances and their estimated useful lives (dollars in thousands): Life September 30, (in years) 2019 2018 Land N/A $ 10,061 $ 11,130 Buildings and building improvements 5 – 53,132 64,251 Leasehold improvements 2 – 10 281,195 274,848 Furniture, fixtures and equipment 2 – 10 634,525 569,149 Total property and equipment, gross 978,913 919,378 Accumulated depreciation and amortization (659,285 ) (611,021 ) Total property and equipment, net $ 319,628 $ 308,357 Depreciation expense for the fiscal years 2019, 2018 and 2017 was $96.1 million, $97.2 million and $99.2 million, respectively, and is included in selling, general and administrative expenses in our consolidated statements of earnings. |
Valuation of Long-Lived Assets and Definite-lived Intangible Assets | Valuation of Long-Lived Assets and Definite-lived Intangible Assets Long-lived assets, such as property and equipment, including store equipment, and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The recoverability of long-lived assets and intangible assets subject to amortization is assessed by comparing the net carrying amount of each asset to the total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. |
Goodwill and Indefinite-lived Intangible Assets | Goodwill and Indefinite-lived Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. G st Components within the same reportable segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. As of September 30, 2019, our reporting units consisted of Sally Beauty Supply (“SBS”) and Beauty Systems Group (“BSG”). We assign goodwill to the reporting unit which consolidates the acquisition. When assessing goodwill for impairment, we perform a quantitative assessment to compare the fair value of each reporting unit to its carrying value, including goodwill. Fair value is measured based on the discounted cash flow method. Based on our assessments, the fair value of each reporting unit exceeded its carrying value, and accordingly, we have not recorded any impairment charges related to goodwill in the current or prior fiscal years presented. Indefinite-lived Intangible Assets Our intangible assets with indefinite lives consist of trade names acquired in business combinations whenever indications of potential impairment exist. When assessing intangible assets with indefinite lives for impairment, we compare the fair value of each asset against its carrying value. Fair value is based on the relief from royalty method. Based |
Self-Insurance Programs | Self-Insurance Programs We self-insure the risks related to workers’ compensation, general and auto liability, property and certain employee-related healthcare benefits. We have obtained third-party excess insurance coverage to limit our exposure per occurrence and aggregate cash outlay. We record an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date, which includes claims filed and estimated losses incurred but not yet reported. We estimate the ultimate cost based on an analysis of our historical data and actuarial estimates. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. The current and long-term portions of these liabilities are recorded at their present value and included in accrued liabilities and other liabilities in our consolidated balance sheets, respectively. |
Revenue Recognition | Revenue Recognition Substantially all of our revenue is derived through the sale of merchandise. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data. Additionally, we have assessed all revenue streams for principal versus agent considerations and have concluded we are the principal for all transactions. See Note 16 for additional information regarding the disaggregation of our sales revenue. Merchandise Revenues The majority of our revenue comes from the sale of products in our company-operated stores. These sales generally have one single performance obligation and the revenue is recognized at the point of sale. However, discounts and incentives issued at the point of sale to entice a customer to a future purchase are treated as a separate performance obligation. As such, we allocate a portion of the revenue generated from the point of sale to each of the additional performance obligations separately using explicitly stated amounts or our best estimate using historical data. We also sell merchandise on our online platforms, to our franchisees and by using distributor sales consultants. These sales generally have one single performance obligation and revenue is recognized upon the shipment of the merchandise. Any shipping and handling fees charged to the customer are recognized as revenue, while any shipping and handling costs to get the merchandise shipped is recognized in cost of goods sold. We extend credit to certain customers, primarily salon professionals, which generally have 30 day payment terms. Based on the nature of theses receivables, no significant financing component exists. Gift Cards The revenue from the sale of our gift cards is recognized at the time the gift card is used to purchase merchandise, which is generally within one year from the date of purchase. Our gift cards do not carry expiration dates or impose post-sale fees. Based on historical experience, a certain amount of our gift cards will not be redeemed, also referred to as “gift card breakage.” We recognize revenue related to gift card breakage within revenue in our consolidated statements of earnings over time proportionately to historical redemption patterns. The gift cards are issued and represent liabilities of either of our operating entities, Sally Beauty Supply LLC or Beauty Systems Group LLC, which are both limited liability companies formed in the state of Virginia. Customer Loyalty Rewards We launched our new Sally Beauty Rewards Loyalty Program nationwide during the first quarter of fiscal year 2019 to the U.S. and Canada, which enables customers to earn points based on their status for every dollar spent on merchandise purchased in our SBS stores and through our sallybeauty.com sallybeauty.com Private Label Credit Card In September 2019, we signed a multi-year agreement with a third-party bank (the “Bank”) to launch a private label credit card (the “Program”). Under the agreement, the Bank will manage and extend credit to our SBS and BSG customers and we will provide licensing to our brand, marketing services and facilitate credit applications. The Bank will be the sole owner of the private label credit card accounts and takes on the risk of default by the private label card holders. As of September 30, 2019, Program operations have not yet commenced. In connection with signing the agreement, we received a refundable payment from the Bank that we recorded as deferred revenue within other liabilities on our consolidated balance sheets and will recognize on a straight-line basis over the initial term of the agreement into net sales in our consolidated statements of earnings. Pursuant to the agreement, the Bank will reimburse us for certain expenses we incur for the launch and marketing of the Program. Amounts reimbursed are recognized in net sales in our consolidated statements of earnings. In addition, we can earn other amounts from the Bank, including incentive payments for achieving performance targets and the activation of credit cards. The following table shows the amount of contract liabilities on our consolidated balance sheets as of September 30, 2019 and 2018 (in thousands): September 30, Contracts Balance Sheet Classification 2019 2018 Gift cards Accrued liabilities $ 4,558 $ 4,144 Rewards loyalty program Accrued liabilities 8,308 1,165 Total liability $ 12,866 $ 5,309 |
Advertising Costs | Advertising Costs Advertising costs relate mainly to print advertisements, digital marketing, trade shows and product education for salon professionals. Advertising costs incurred in connection with print advertisements are expensed the first time the advertisement is run. Other advertising costs are expensed when incurred. Advertising costs were $73.3 million, $83.4 million and $82.0 million for the fiscal years 2019, 2018 and 2017, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. |
Share-based Compensation | Share-based Compensation We measure the cost of services received from our employees and directors in exchange for an award of equity instruments based on the fair value of the award on the date of grant which are expensed ratably over the vesting period. We recognize the impact of forfeitures as they occur. Share-based compensation expense is included in selling, general and administrative expenses in our consolidated statements of earnings. |
Income Taxes | Income Taxes We recognize deferred income taxes for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are anticipated to be recovered or settled. The effect on deferred taxes of a change in income tax rates is recognized in the consolidated statements of earnings in the period of enactment. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that such assets will be realized in full. The estimated tax benefit of an uncertain tax position is recorded in our consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax position will withstand challenge, if any, from applicable taxing authorities. |
Foreign Currency | Foreign Currency The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. Foreign currency transaction gains or losses, including changes in the fair value (i.e., marked-to-market adjustments) of certain foreign exchange contracts we hold, are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and were not significant in any of the periods presented in the accompanying consolidated financial statements. |
Accounting Changes and Recent_2
Accounting Changes and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes | Accounting Changes In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In connection with the adoption of ASU No. 2014-09, we now present our sales returns allowance on a gross basis rather than a net liability basis. As such, we recognize a return asset from the right to recover merchandise from customers (included in other current assets) and a return liability from the amount to be returned to the customer (included in accrued liabilities) within our consolidated balance sheets. Additionally, we now recognize revenue for our gift cards not expected to be redeemed (“gift card breakage”) within revenue in our consolidated statements of earnings. The following tables set forth the impact of adopting this standard on our consolidated balance sheets as of September 30, 2019 and our consolidated statements of earnings for the fiscal year ended September 30, 2019 (in thousands): Effect of ASU No. 2014-09 Adoption on Consolidated Balance Sheet Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Accounts receivable, other $ 61,403 $ 58,968 $ 2,435 Accrued liabilities $ 169,054 $ 166,619 $ 2,435 Effect of ASU No. 2014-09 Adoption on Consolidated Statement of Earnings Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Net Sales $ 3,876,411 $ 3,876,136 $ 275 Gross Profit 1,910,542 1,910,267 275 Selling, general and administrative expenses $ 1,452,751 $ 1,452,476 $ 275 |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02, Leases We have completed a preliminary assessment of the potential impact of adopting ASU No. 2016-02 on our consolidated financial statements. At September 30, 2019, we estimate that the adoption of ASU No. 2016-02 would have resulted in recognition of a lease liability in the estimated amount of approximately $500.0 million and a right-of-use asset for a similar amount, which will be adjusted by reclassifications of existing lease assets and liability, on our consolidated balance sheet. We are currently in the final stages of implementing changes to our processes, controls and systems and expect to be compliant upon required adoption of the new standard. We do not believe adoption of ASU No. 2016-02 will have a material impact on our consolidated results of operations or consolidated cash flows. The amount of the right-of-use asset and the lease liability we ultimately recognize may materially differ from this preliminary estimate, including as a result of future organic growth in our business, changes in interest rates, and potential acquisitions. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Property and Equipment Balances and Estimated Useful Lives | The following table summarizes our property and equipment balances and their estimated useful lives (dollars in thousands): Life September 30, (in years) 2019 2018 Land N/A $ 10,061 $ 11,130 Buildings and building improvements 5 – 53,132 64,251 Leasehold improvements 2 – 10 281,195 274,848 Furniture, fixtures and equipment 2 – 10 634,525 569,149 Total property and equipment, gross 978,913 919,378 Accumulated depreciation and amortization (659,285 ) (611,021 ) Total property and equipment, net $ 319,628 $ 308,357 |
Summary of Contract Liabilities | The following table shows the amount of contract liabilities on our consolidated balance sheets as of September 30, 2019 and 2018 (in thousands): September 30, Contracts Balance Sheet Classification 2019 2018 Gift cards Accrued liabilities $ 4,558 $ 4,144 Rewards loyalty program Accrued liabilities 8,308 1,165 Total liability $ 12,866 $ 5,309 |
Accounting Changes and Recent_3
Accounting Changes and Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
ASU 2014-09 | |
Recent Accounting Pronouncements | |
Schedule of Impact of Adopting ASU No. 2014-09 on Consolidated Balance Sheets and Consolidated Statements of Earnings | The following tables set forth the impact of adopting this standard on our consolidated balance sheets as of September 30, 2019 and our consolidated statements of earnings for the fiscal year ended September 30, 2019 (in thousands): Effect of ASU No. 2014-09 Adoption on Consolidated Balance Sheet Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Accounts receivable, other $ 61,403 $ 58,968 $ 2,435 Accrued liabilities $ 169,054 $ 166,619 $ 2,435 Effect of ASU No. 2014-09 Adoption on Consolidated Statement of Earnings Excluding ASU No. 2014-09 ASU No. 2014-09 As reported Effect Effect Net Sales $ 3,876,411 $ 3,876,136 $ 275 Gross Profit 1,910,542 1,910,267 275 Selling, general and administrative expenses $ 1,452,751 $ 1,452,476 $ 275 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities and other fair value disclosures by fair value hierarchy | Fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follows (in thousands): As of September 30, Classification Pricing Category 2019 2018 Financial Assets Interest rate caps Other assets Level 2 344 8,367 Financial Liabilities None The fair value for interest rate caps were measured using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Other fair value disclosures Carrying amounts and the related estimated fair value of our long-term debt, excluding capital lease obligations, are as follows: As of September 30, 2019 2018 Pricing Category Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 885,296 898,814 $ 950,000 $ 911,490 Other long-term debt Level 2 724,000 709,830 844,500 824,068 Total debt $ 1,609,296 $ 1,608,644 $ 1,794,500 $ 1,735,558 |
Accumulated Stockholders' Def_2
Accumulated Stockholders' Deficit (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
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 Caps Foreign Exchange Contracts Total Balance at September 30, 2017 $ (80,752 ) $ (1,084 ) $ — $ (81,836 ) Other comprehensive income (loss) before reclassifications, net of tax (10,604 ) 2,449 — (8,155 ) Balance at September 30, 2018 (91,356 ) 1,365 — (89,991 ) Other comprehensive loss before reclassifications, net of tax (22,576 ) (6,167 ) (869 ) (29,612 ) Reclassification to net earnings, net of tax — 1,601 715 2,316 Balance at September 30, 2019 $ (113,932 ) $ (3,201 ) $ (154 ) $ (117,287 ) |
Weighted-Average Shares (Tables
Weighted-Average Shares (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | The following table sets forth the computations of basic and diluted earnings per share (in thousands): Fiscal Year Ended September 30, 2019 2018 2017 Weighted average basic shares 119,636 123,190 137,533 Dilutive securities: Stock option and stock award programs 647 642 643 Weighted average diluted shares 120,283 123,832 138,176 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of total compensation cost charged against income | The following table presents total compensation cost for all share-based compensation arrangements, and the related income tax benefits recognized in our consolidated statement of earnings (in thousands): Fiscal Year Ended September 30, 2019 2018 2017 Share-based compensation expense $ 9,180 $ 10,519 $ 10,507 Income tax benefit related to share-based compensation expense $ 2,357 $ 3,013 $ 3,918 |
Summary of activity for performance based unit awards assuming 100% payout | Performance Awards Number of Shares (in Weighted Average Fair Value Per Share Unvested at September 30, 2018 349 $ 20.88 Granted 230 17.22 Vested (28 ) 22.26 Forfeited (140 ) 20.63 Unvested at September 30, 2019 411 $ 18.83 |
Summary of activity for stock option awards | Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 30, 2018 5,405 $ 23.04 5.4 $ 3,161 Granted 948 18.14 Exercised (152 ) 14.34 Forfeited or expired (1,299 ) 24.09 Outstanding at September 30, 2019 4,902 $ 22.08 5.8 $ 670 Exercisable at September 30, 2019 4,054 $ 23.00 5.1 $ 670 |
Schedule of weighted average assumptions for valuation of stock options using the Black-Scholes option pricing model | Fiscal Year Ended September 30, 2019 2018 2017 Expected life (in years) 5.0 5.0 5.0 Expected volatility for the Company’s common stock 30.5 % 27.4 % 25.3 % Risk-free interest rate 3.0 % 2.1 % 1.3 % Dividend yield 0.0 % 0.0 % 0.0 % |
Restricted Stock Awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of the activity for restricted stock awards/units | Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2018 219 $ 16.98 Granted 287 18.14 Vested (169 ) 17.77 Forfeited (75 ) 17.84 Unvested at September 30, 2019 262 $ 17.53 |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of the activity for restricted stock awards/units | Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2018 — $ — Granted 88 18.14 Vested (80 ) 18.14 Forfeited (8 ) 18.14 Unvested at September 30, 2019 — $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amounts of goodwill | The changes in the carrying amounts of goodwill during the fiscal years 2019 and 2018 are as follows (in thousands): SBS BSG Total Balance at September 30, 2017 $ 82,670 $ 455,121 $ 537,791 Acquisitions 329 716 1,045 Foreign currency translation (1,782 ) (1,129 ) (2,911 ) Balance at September 30, 2018 $ 81,217 $ 454,708 $ 535,925 Acquisitions 284 — 284 Foreign currency translation (4,596 ) (827 ) (5,423 ) Balance at September 30, 2019 $ 76,905 $ 453,881 $ 530,786 |
Schedule of other intangible assets, excluding goodwill | The following table reflects our other intangible assets, excluding goodwill, on our consolidated balance sheets. Once an intangible becomes fully amortized, the original cost and accumulated amortization is removed in the subsequent period. In the table below, prior year amounts for definite-lived intangible assets have been conformed to the current year’s presentation. As of September 30, 2019 and 2018, we had the following (in thousands): September 30, 2019 September 30, 2018 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Definite-lived Intangible assets: Customer relationships $ 43,752 $ (33,192 ) $ 10,560 $ 58,133 $ (41,055 ) $ 17,078 Distribution rights 33,364 (27,477 ) 5,887 40,280 (32,080 ) 8,200 Other intangible assets 6,457 (3,946 ) 2,511 8,956 (5,779 ) 3,177 Total definite-lived intangible assets 83,573 (64,615 ) 18,958 107,369 (78,914 ) 28,455 Indefinite-lived Intangible assets: Trade names 43,093 — 43,093 44,243 — 44,243 Total intangible assets, excluding goodwill, net $ 126,666 $ (64,615 ) $ 62,051 $ 151,612 $ (78,914 ) $ 72,698 |
Schedule of expected future amortization expense related to definite-lived intangible assets | As of September 30, 2019, the expected future amortization expense related to definite-lived intangible assets is as follows (in thousands): Fiscal Year: 2020 $ 8,669 2021 5,028 2022 2,569 2023 1,472 2024 555 Thereafter 665 $ 18,958 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): September 30, 2019 2018 Compensation and benefits $ 63,005 $ 61,182 Deferred revenue 18,165 18,450 Interest payable 17,951 23,008 Rental obligations 11,670 12,129 Insurance reserves 4,567 4,816 Property and other taxes 3,869 4,607 Loss contingency obligation — 14,294 Operating accruals and other 49,827 41,801 Total accrued liabilities $ 169,054 $ 180,287 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments, excluding amounts related taxes, insurance, maintenance and special assessments, under non-cancelable operating leases | At September 30, 2019, future minimum payments, excluding amounts related taxes, insurance, maintenance and special assessments, under non-cancelable operating leases are as follows (in thousands): Fiscal Year: 2020 $ 174,578 2021 136,900 2022 95,918 2023 61,944 2024 33,803 Thereafter 40,545 $ 543,688 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of long-term debt | Short-term Debt In July 2017, we entered into an amended and restated $500 million, five-year At September 30, 2019 and 2018, we did not have any outstanding borrowing under the ABL facility. At September 30, 2019, we had $482.0 million available for borrowing under the ABL facility. Long-term Debt Long-term debt consists of the following (dollars in thousands): September 30, 2019 2018 Interest Rates Term loan B: Variable-rate tranche 424,000 544,500 LIBOR plus 2.25% Fixed-rate tranche 300,000 300,000 4.500% Senior notes due Nov. 2023 197,419 200,000 5.500% Senior notes due Dec. 2025 687,877 750,000 5.625% Total $ 1,609,296 $ 1,794,500 Plus: capital lease obligations 832 883 Less: unamortized debt issuance costs and discount, net 15,585 21,074 Total debt $ 1,594,543 $ 1,774,309 Less: current maturities 1 5,501 Total long-term debt $ 1,594,542 $ 1,768,808 |
Schedule of maturities of debt | Maturities of our debt, excluding capital leases, are as follows at September 30, 2019 (in thousands): Fiscal Year: 2020-2023 $ — 2024 921,419 Thereafter 687,877 Total $ 1,609,296 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes for the fiscal years 2019, 2018 and 2017 consists of the following (in thousands): Fiscal Year Ended September 30, 2019 2018 2017 Current: Federal $ 59,855 $ 68,608 $ 97,332 Foreign 10,132 11,039 10,394 State 15,339 11,344 8,700 Total current portion 85,326 90,991 116,426 Deferred: Federal 4,905 (26,001 ) 14,559 Foreign (1,498 ) 1,868 (2,314 ) State 1,808 3,522 1,951 Total deferred portion 5,215 (20,611 ) 14,196 Total provision for income taxes $ 90,541 $ 70,380 $ 130,622 |
Schedule of the difference between U.S. statutory federal income tax rate and the effective income tax rate | The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below: Fiscal Year Ended September 30, 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 24.5 % 35.0 % State income taxes, net of federal tax benefit 3.4 3.2 2.2 Effect of foreign operations — 0.6 0.3 Deferred tax revaluation, including adoption of income tax method changes — (11.5 ) — Deemed repatriation tax (0.3 ) 3.6 — Other, net 0.9 1.0 0.3 Effective tax rate 25.0 % 21.4 % 37.8 % |
Schedule of the tax effects of temporary differences that give rise to the Company's deferred tax assets and liabilities | The tax effects of temporary differences that give rise to our deferred tax assets and liabilities are as follows (in thousands): September 30, 2019 2018 Deferred tax assets attributable to: Foreign loss carryforwards $ 27,097 $ 28,612 Accrued liabilities 12,248 15,676 Share-based compensation expense 9,494 10,762 U.S. foreign tax credits 8,807 8,807 Unrecognized tax benefits 320 322 Inventory adjustments 1,242 — Other 651 442 Total deferred tax assets 59,859 64,621 Valuation allowance (38,287 ) (40,906 ) Total deferred tax assets, net 21,572 23,715 Deferred tax liabilities attributable to: Depreciation and amortization 94,920 92,531 Inventory adjustments — 673 Total deferred tax liabilities 94,920 93,204 Net deferred tax liability $ 73,348 $ 69,489 |
Schedule of changes in the amount of unrecognized tax benefits | The changes in the amount of unrecognized tax benefits are as follows (in thousands): Fiscal Year Ended September 30, 2019 2018 Balance at beginning of the fiscal year $ 1,368 $ 1,467 Increases related to prior year tax positions — — Decreases related to prior year tax positions (4 ) (3 ) Increases related to current year tax positions 954 309 Lapse of statute (318 ) (405 ) Balance at end of fiscal year $ 2,000 $ 1,368 |
Segments and Disaggregated Re_2
Segments and Disaggregated Revenue (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment data | Segment data for the fiscal years 2019, 2018 and 2017 are as follows (in thousands): 2019 2018 2017 Net sales (for the fiscal year indicated): SBS $ 2,293,094 $ 2,333,838 $ 2,345,116 BSG 1,583,317 1,598,727 1,593,201 Total $ 3,876,411 $ 3,932,565 $ 3,938,317 Earnings before provision for income taxes: Segment operating earnings: SBS $ 366,412 $ 362,853 $ 385,407 BSG 239,572 240,225 254,691 Segment operating earnings 605,984 603,078 640,098 Unallocated expenses (148,193 ) (142,874 ) (138,822 ) Restructuring 682 (33,615 ) (22,679 ) Consolidated operating earnings 458,473 426,589 478,597 Interest expense (96,309 ) (98,162 ) (132,899 ) Earnings before provision for income taxes $ 362,164 $ 328,427 $ 345,698 Depreciation and amortization: SBS $ 65,561 $ 64,017 $ 63,427 BSG 28,568 29,733 31,755 Corporate 13,529 15,079 17,141 Total $ 107,658 $ 108,829 $ 112,323 Payments for property and equipment: SBS $ 69,802 $ 46,289 $ 52,178 BSG 18,997 16,598 19,335 Corporate 18,956 23,620 18,153 Total $ 107,755 $ 86,507 $ 89,666 Total assets (as of September 30): SBS $ 973,304 $ 995,546 $ 1,025,545 BSG 1,012,336 993,122 964,984 Sub-total 1,985,640 1,988,668 1,990,529 Corporate 112,806 108,746 108,478 Total $ 2,098,446 $ 2,097,414 $ 2,099,007 |
Schedule of geographic area information | Certain geographic data is as follows (in thousands): 2019 2018 2017 Net sales (for the fiscal year indicated): United States $ 3,169,821 $ 3,188,993 $ 3,248,662 Other countries 706,590 743,572 689,655 Total $ 3,876,411 $ 3,932,565 $ 3,938,317 Long-lived assets (as of September 30): United States $ 259,815 $ 234,475 $ 230,698 United Kingdom 24,476 29,493 32,771 Other countries 35,337 44,389 50,248 Total $ 319,628 $ 308,357 $ 313,717 |
Schedule of disaggregation of segment revenues by merchandise category and sales channels | The following tables disaggregate our segment revenues by merchandise category: Fiscal Year Ended September 30, SBS 2019 2018 2017 Hair color 29.4 % 26.9 % 26.0 % Hair care 20.4 % 20.9 % 21.1 % Skin and nail care 14.8 % 15.7 % 15.7 % Styling tools 13.5 % 13.9 % 14.1 % Multicultural products 7.1 % 7.5 % 7.9 % Salon supplies and accessories 6.6 % 7.1 % 7.3 % Other beauty items 8.2 % 8.0 % 7.9 % Total 100.0 % 100.0 % 100.0 % Fiscal Year Ended September 30, BSG 2019 2018 2017 Hair color 39.5 % 38.4 % 37.0 % Hair care 35.1 % 33.7 % 34.4 % Skin and nail care 8.1 % 8.7 % 9.0 % Styling tools 3.4 % 3.9 % 4.2 % Other beauty items 6.3 % 6.7 % 6.9 % Promotional items 7.6 % 8.6 % 8.5 % Total 100.0 % 100.0 % 100.0 % The following table disaggregates our segment revenue by sales channels: SBS BSG Fiscal Year Ended September 30, Fiscal Year Ended September 30, 2019 2018 2017 2019 2018 2017 Company-operated stores 96.9 % 97.5 % 98.1 % 69.4 % 68.7 % 68.4 % E-commerce 2.8 % 2.2 % 1.6 % 4.8 % 3.7 % 3.3 % Franchise stores 0.3 % 0.3 % 0.3 % 7.6 % 7.7 % 7.7 % Distributor sales consultants — — — 18.2 % 19.9 % 20.6 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % |
Separate Financial Informatio_2
Separate Financial Information of Guarantor Subsidiaries (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet September 30, 2019 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Trade and other accounts receivable, net — — 65,746 38,793 — 104,539 Due from affiliates — — 2,878,072 — (2,878,072 ) — Inventory — — 722,830 230,077 — 952,907 Other current assets 1,436 132 22,480 10,564 — 34,612 Property and equipment, net 6 — 258,132 61,490 — 319,628 Investment in subsidiaries 1,621,843 4,374,334 385,629 — (6,381,806 ) — Goodwill and other intangible assets, net — — 452,645 140,192 — 592,837 Other assets 1,446 3,499 (581 ) 18,064 — 22,428 Total assets $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 48 $ — $ 235,940 $ 42,700 $ — $ 278,688 Due to affiliates 1,672,322 1,142,324 — 63,426 (2,878,072 ) — Accrued liabilities 188 17,937 121,375 29,554 — 169,054 Income taxes payable 6,055 2,161 1 119 — 8,336 Long-term debt — 1,593,710 1 832 — 1,594,543 Other liabilities 6,441 — 17,639 3,677 — 27,757 Deferred income tax liabilities, net — — 76,672 3,719 — 80,391 Total liabilities 1,685,054 2,756,132 451,628 144,027 (2,878,072 ) 2,158,769 Total stockholders’ (deficit) equity (60,323 ) 1,621,843 4,374,334 385,629 (6,381,806 ) (60,323 ) Total liabilities and stockholders’ (deficit) equity $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 Condensed Consolidating Balance Sheet September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Trade and other accounts receivable, net 4 — 53,295 37,191 — 90,490 Due from affiliates — — 2,598,681 — (2,598,681 ) — Inventory — — 714,000 230,338 — 944,338 Other current assets 2,010 111 27,422 13,417 — 42,960 Property and equipment, net 8 — 232,941 75,408 — 308,357 Investment in subsidiaries 1,368,927 4,044,669 380,166 — (5,793,762 ) — Goodwill and other intangible assets, net — — 459,348 149,275 — 608,623 Other assets 1,325 10,242 (4,797 ) 18,581 — 25,351 Total assets $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 Liabilities and Stockholders’ (Deficit) Equity Accounts payable $ 38 $ — $ 233,936 $ 69,267 $ — $ 303,241 Due to affiliates 1,629,411 888,141 — 81,129 (2,598,681 ) — Accrued liabilities 234 23,019 125,179 31,855 — 180,287 Income taxes payable 585 1,519 — 40 — 2,144 Long-term debt — 1,773,426 1 882 — 1,774,309 Other liabilities 10,562 — 15,250 4,210 — 30,022 Deferred income tax liabilities, net — — 71,071 4,896 — 75,967 Total liabilities 1,640,830 2,686,105 445,437 192,279 (2,598,681 ) 2,365,970 Total stockholders’ (deficit) equity (268,556 ) 1,368,927 4,044,669 380,166 (5,793,762 ) (268,556 ) Total liabilities and stockholders’ (deficit) equity $ 1,372,274 $ 4,055,032 $ 4,490,106 $ 572,445 $ (8,392,443 ) $ 2,097,414 |
Schedule of Condensed Consolidating Statement of Earnings and Comprehensive Income | Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,131,360 $ 745,051 $ — $ 3,876,411 Related party sales — — 2,201 — (2,201 ) — Cost of goods sold — — 1,568,663 399,407 (2,201 ) 1,965,869 Gross profit — — 1,564,898 345,644 — 1,910,542 Selling, general and administrative expenses 11,331 607 1,135,926 304,887 — 1,452,751 Restructuring — — (682 ) — — (682 ) Operating earnings (loss) (11,331 ) (607 ) 429,654 40,757 — 458,473 Interest expense (income) — 96,464 5 (160 ) — 96,309 Earnings (loss) before provision for income taxes (11,331 ) (97,071 ) 429,649 40,917 — 362,164 Provision (benefit) for income taxes (2,742 ) (24,888 ) 109,230 8,941 — 90,541 Equity in earnings of subsidiaries, net of tax 280,212 352,395 31,976 — (664,583 ) — Net earnings 271,623 280,212 352,395 31,976 (664,583 ) 271,623 Other comprehensive loss, net of tax — (4,566 ) — (22,730 ) — (27,296 ) Total comprehensive income (loss) $ 271,623 $ 275,646 $ 352,395 $ 9,246 $ (664,583 ) $ 244,327 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,152,120 $ 780,445 $ — $ 3,932,565 Related party sales — — 2,294 — (2,294 ) — Cost of goods sold — — 1,581,385 409,061 (2,294 ) 1,988,152 Gross profit — — 1,573,029 371,384 — 1,944,413 Selling, general and administrative expenses 10,957 1,538 1,136,312 335,402 — 1,484,209 Restructuring — — 33,615 — — 33,615 Operating earnings (loss) (10,957 ) (1,538 ) 403,102 35,982 — 426,589 Interest expense (income) — 98,332 (3 ) (167 ) — 98,162 Earnings (loss) before provision for income taxes (10,957 ) (99,870 ) 403,105 36,149 — 328,427 Provision (benefit) for income taxes (2,734 ) (28,787 ) 73,747 28,154 — 70,380 Equity in earnings of subsidiaries, net of tax 266,270 337,353 7,995 — (611,618 ) — Net earnings 258,047 266,270 337,353 7,995 (611,618 ) 258,047 Other comprehensive income (loss), net of tax — 2,449 — (10,604 ) — (8,155 ) Total comprehensive income (loss) $ 258,047 $ 268,719 $ 337,353 $ (2,609 ) $ (611,618 ) $ 249,892 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2017 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,209,039 $ 729,278 $ — $ 3,938,317 Related party sales — — 2,501 — (2,501 ) — Cost of goods sold — — 1,590,184 385,739 (2,501 ) 1,973,422 Gross profit — — 1,621,356 343,539 — 1,964,895 Selling, general and administrative expenses 10,939 526 1,130,615 321,539 — 1,463,619 Restructuring — — 22,679 — — 22,679 Operating earnings (loss) (10,939 ) (526 ) 468,062 22,000 — 478,597 Interest expense — 132,696 6 197 — 132,899 Earnings (loss) before provision for income taxes (10,939 ) (133,222 ) 468,056 21,803 — 345,698 Provision (benefit) for income taxes (4,246 ) (51,726 ) 177,383 9,211 — 130,622 Equity in earnings of subsidiaries, net of tax 221,769 303,265 12,592 — (537,626 ) — Net earnings 215,076 221,769 303,265 12,592 (537,626 ) 215,076 Other comprehensive income (loss), net of tax — (1,084 ) — 19,299 — 18,215 Total comprehensive income $ 215,076 $ 220,685 $ 303,265 $ 31,891 $ (537,626 ) $ 233,291 |
Schedule of Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 2,364 $ (70,150 ) $ 373,313 $ 14,888 $ — $ 320,415 Cash Flows from Investing Activities: Payments for property and equipment, net (1 ) — (79,379 ) (13,063 ) — (92,443 ) Acquisitions, net of cash acquired — — (2,584 ) (840 ) — (3,424 ) Due from affiliates — — (279,391 ) — 279,391 — Net cash used by investing activities (1 ) — (361,354 ) (13,903 ) 279,391 (95,867 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 593,500 4 — — 593,504 Repayments of long-term debt — (777,533 ) (4 ) (1 ) — (777,538 ) Payments for common stock repurchased (47,434 ) — — — — (47,434 ) Proceeds from exercises of stock options 2,160 — — — — 2,160 Due to affiliates 42,911 254,183 — (17,703 ) (279,391 ) — Net cash provided (used) by financing activities (2,363 ) 70,150 — (17,704 ) (279,391 ) (229,308 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (1,040 ) — (1,040 ) Net increase (decrease) in cash and cash equivalents — — 11,959 (17,759 ) — (5,800 ) Cash and cash equivalents, beginning of period — 10 29,050 48,235 — 77,295 Cash and cash equivalents, end of period $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Condensed Consolidating Statement of Cash Flows September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 23,424 $ (62,948 ) $ 384,958 $ 27,227 $ — $ 372,661 Cash Flows from Investing Activities: Payments for property and equipment, net — — (68,689 ) (17,449 ) — (86,138 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (309,310 ) — 309,310 — Net cash used by investing activities — — (377,999 ) (26,624 ) 309,310 (95,313 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 461,814 5 — — 461,819 Repayments of long-term debt — (558,000 ) (4 ) (595 ) — (558,599 ) Debt issuance cost — (1,151 ) — — — (1,151 ) Payments for common stock repurchased (166,701 ) — — — — (166,701 ) Proceeds from exercises of stock options 1,350 — — — — 1,350 Due to affiliates 141,927 160,285 — 7,098 (309,310 ) — Net cash provided (used) by financing activities (23,424 ) 62,948 1 6,503 (309,310 ) (263,282 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (530 ) — (530 ) Net increase in cash and cash equivalents — — 6,960 6,576 — 13,536 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 4,095 $ (72,779 ) $ 386,604 $ 25,366 $ — $ 343,286 Cash Flows from Investing Activities: Payments for property and equipment, net — — (64,000 ) (25,625 ) — (89,625 ) Due from affiliates — — (322,866 ) — 322,866 — Net cash used by investing activities — — (386,866 ) (25,625 ) 322,866 (89,625 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 1,277,250 — — — 1,277,250 Repayments of long-term debt — (1,215,940 ) (16 ) (687 ) — (1,216,643 ) Debt issuance costs — (8,376 ) — — — (8,376 ) Payments for common stock repurchased (346,873 ) — — — — (346,873 ) Proceeds from exercises of stock options 17,339 — — — — 17,339 Due to affiliates 325,439 (8,517 ) — 5,944 (322,866 ) — Net cash provided (used) by financing activities (4,095 ) 44,417 (16 ) 5,257 (322,866 ) (277,303 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — 779 — 779 Net increase (decrease) in cash and cash equivalents — (28,362 ) (278 ) 5,777 — (22,863 ) Cash and cash equivalents, beginning of period — 28,372 22,368 35,882 — 86,622 Cash and cash equivalents, end of period $ — $ 10 $ 22,090 $ 41,659 $ — $ 63,759 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Summary of restructuring expense and gains | Restructuring expense and gains for the fiscal years ended September 30, 2019, 2018 and 2017, are as follows (in thousands): 2019 2018 2017 Supply Chain Modernization $ (4,662 ) $ — $ — 2018 Restructuring Plan 3,980 33,615 — 2017 Restructuring Plan — — 22,679 Total expense (gain) $ (682 ) $ 33,615 $ 22,679 |
Supply Chain Modernization | |
Schedule of restructuring | The liability related to the supply chain modernization, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): Supply Chain Modernization Liability at September 30, 2018 Expenses Cash Payments Adjustments Liability at September 30, 2019 Workforce reductions $ — $ 2,502 $ 1,848 $ — $ 654 Facility closures — 1,021 817 — 204 Other — 224 224 — — Total $ — $ 3,747 $ 2,889 $ — $ 858 |
2018 Restructuring Plan | |
Schedule of restructuring | The liability related to the 2018 Restructuring Plan, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): 2018 Restructuring Plan Liability at September 30, 2018 Expenses Cash Payments Adjustments Liability at September 30, 2019 Workforce reductions $ 3,444 $ 643 $ 4,087 $ — $ — Consulting 3,087 2,502 5,589 — — Other 2,266 835 3,031 — 70 Total $ 8,797 $ 3,980 $ 12,707 $ — $ 70 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of selected unaudited quarterly consolidated statement of earnings data | Certain unaudited quarterly consolidated statement of earnings information for the fiscal years ended September 30, 2019 and 2018 is summarized below (in thousands, except per share data): 1 st 2 nd 3 rd 4 th Fiscal Year Quarter Quarter Quarter Quarter 2019: Net sales $ 989,453 $ 945,852 $ 975,169 $ 965,937 Gross profit $ 480,705 $ 468,324 $ 482,222 $ 479,291 Net earnings $ 65,727 $ 65,725 $ 71,164 $ 69,007 Earnings per share (a) Basic $ 0.55 $ 0.55 $ 0.59 $ 0.58 Diluted $ 0.54 $ 0.54 $ 0.59 $ 0.58 2018: Net sales $ 994,964 $ 975,321 $ 996,283 $ 965,997 Gross profit $ 486,629 $ 486,322 $ 493,370 $ 478,092 Net earnings $ 83,264 $ 61,371 $ 58,226 $ 55,186 Earnings per share (a) Basic $ 0.65 $ 0.49 $ 0.48 $ 0.46 Diluted $ 0.65 $ 0.49 $ 0.48 $ 0.46 (a) The sum of the quarterly earnings per share may not equal the full year amount due to rounding of the calculated amounts. |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Trade Accounts Receivable and Accounts Receivable, Other | |||
Allowance for Doubtful Accounts | $ 1.7 | $ 1.8 | |
Selling, general and administrative expenses | |||
Property Plant and Equipment | |||
Depreciation expense | $ 96.1 | $ 97.2 | $ 99.2 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Property and Equipment Balances and Estimated Useful Lives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | $ 978,913 | $ 919,378 | |
Accumulated depreciation and amortization | (659,285) | (611,021) | |
Total property and equipment, net | 319,628 | 308,357 | $ 313,717 |
Land | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | 10,061 | 11,130 | |
Buildings and building improvements | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | 53,132 | 64,251 | |
Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | 281,195 | 274,848 | |
Furniture, fixtures and equipment | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | $ 634,525 | $ 569,149 | |
Minimum | Buildings and building improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Minimum | Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 2 years | ||
Minimum | Furniture, fixtures and equipment | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 2 years | ||
Maximum | Buildings and building improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 40 years | ||
Maximum | Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 10 years | ||
Maximum | Furniture, fixtures and equipment | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 10 years |
Significant Accounting Polici_6
Significant Accounting Policies - Goodwill and Indefinite-lived Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Indefinite-lived Intangible Assets | |||
Impairment losses in connection with the goodwill | $ 0 | $ 0 | $ 0 |
Impairment of intangible assets with indefinite lives | $ 0 | $ 0 | $ 0 |
Significant Accounting Polici_7
Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Revenue recognition payment terms | 30 days |
Significant Accounting Polici_8
Significant Accounting Policies - Summary of Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Contract With Customer Liability [Line Items] | ||
Total liability | $ 12,866 | $ 5,309 |
Gift Cards | Accrued Liabilities | ||
Contract With Customer Liability [Line Items] | ||
Total liability | 4,558 | 4,144 |
Rewards Loyalty Program | Accrued Liabilities | ||
Contract With Customer Liability [Line Items] | ||
Total liability | $ 8,308 | $ 1,165 |
Significant Accounting Polici_9
Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Advertising Costs | |||
Advertising costs | $ 73.3 | $ 83.4 | $ 82 |
Accounting Changes and Recent_4
Accounting Changes and Recent Accounting Pronouncements - Schedule of Effect of ASU No. 2014-09 Adoption on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Recent Accounting Pronouncements | ||
Accounts receivable, other | $ 61,403 | $ 42,073 |
Accrued liabilities | 169,054 | $ 180,287 |
ASU 2014-09 | Excluding ASU No. 2014-09 Effect | ||
Recent Accounting Pronouncements | ||
Accounts receivable, other | 58,968 | |
Accrued liabilities | 166,619 | |
ASU 2014-09 | ASU No. 2014-09 Effect | ||
Recent Accounting Pronouncements | ||
Accounts receivable, other | 2,435 | |
Accrued liabilities | $ 2,435 |
Accounting Changes and Recent_5
Accounting Changes and Recent Accounting Pronouncements - Effect of ASU No. 2014-09 Adoption on Consolidated Statement of Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Recent Accounting Pronouncements | |||||||||||
Net sales | $ 965,937 | $ 975,169 | $ 945,852 | $ 989,453 | $ 965,997 | $ 996,283 | $ 975,321 | $ 994,964 | $ 3,876,411 | $ 3,932,565 | $ 3,938,317 |
Gross Profit | $ 479,291 | $ 482,222 | $ 468,324 | $ 480,705 | $ 478,092 | $ 493,370 | $ 486,322 | $ 486,629 | 1,910,542 | 1,944,413 | 1,964,895 |
Selling, general and administrative expenses | 1,452,751 | $ 1,484,209 | $ 1,463,619 | ||||||||
ASU 2014-09 | Excluding ASU No. 2014-09 Effect | |||||||||||
Recent Accounting Pronouncements | |||||||||||
Net sales | 3,876,136 | ||||||||||
Gross Profit | 1,910,267 | ||||||||||
Selling, general and administrative expenses | 1,452,476 | ||||||||||
ASU 2014-09 | ASU No. 2014-09 Effect | |||||||||||
Recent Accounting Pronouncements | |||||||||||
Net sales | 275 | ||||||||||
Gross Profit | 275 | ||||||||||
Selling, general and administrative expenses | $ 275 |
Accounting Changes and Recent_6
Accounting Changes and Recent Accounting Pronouncements (Details) - ASU 16-02 $ in Millions | Sep. 30, 2019USD ($) |
Recent Accounting Pronouncements | |
Estimated amount of Lease liability | $ 500 |
Right of use asset | $ 500 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Long-term debt | ||
Long-term debt, Carrying Value | $ 1,609,296 | $ 1,794,500 |
Long-term debt, Fair Value | 1,608,644 | 1,735,558 |
Level 2 | Other Long-Term Debt | ||
Long-term debt | ||
Long-term debt, Carrying Value | 724,000 | 844,500 |
Long-term debt, Fair Value | 709,830 | 824,068 |
Level 1 | Senior notes | ||
Long-term debt | ||
Long-term debt, Carrying Value | 885,296 | 950,000 |
Long-term debt, Fair Value | 898,814 | 911,490 |
Fair value measurement on recurring basis | Level 2 | Other assets | ||
Financial Assets | ||
Interest rate caps | $ 344 | $ 8,367 |
Accumulated Stockholders' Def_3
Accumulated Stockholders' Deficit - Share Repurchase Program (Details) - USD ($) shares in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
2017 Share Repurchase program | ||||
Share Repurchase Program | ||||
Amount of shares authorized to be repurchased | $ 1,000,000,000 | |||
Term of share repurchase program | 4 years | |||
Stock repurchase program, expiration date | Sep. 30, 2021 | |||
2017 Share Repurchase Program and 2014 Share Repurchase Program | ||||
Share Repurchase Program | ||||
Common stock shares repurchased and retired (in shares) | 3.6 | 10 | 16.1 | |
Cost of repurchase and retirement of common stock | $ 46,600,000 | $ 165,900,000 | $ 346,100,000 |
Accumulated stock holders' Defi
Accumulated stock holders' Deficit - Change in AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | $ (268,556) | $ (363,616) |
Balance | (60,323) | (268,556) |
Interest rate caps | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | 1,365 | (1,084) |
Other comprehensive income (loss) before reclassifications, net of tax | (6,167) | 2,449 |
Reclassification to net earnings, net of tax | 1,601 | |
Balance | (3,201) | 1,365 |
Foreign exchange contracts | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Other comprehensive income (loss) before reclassifications, net of tax | (869) | |
Reclassification to net earnings, net of tax | 715 | |
Balance | (154) | |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (91,356) | (80,752) |
Other comprehensive income (loss) before reclassifications, net of tax | (22,576) | (10,604) |
Balance | (113,932) | (91,356) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (89,991) | (81,836) |
Other comprehensive income (loss) before reclassifications, net of tax | (29,612) | (8,155) |
Reclassification to net earnings, net of tax | 2,316 | |
Balance | $ (117,287) | $ (89,991) |
Weighted-Average Shares (Detail
Weighted-Average Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share Reconciliation: | |||
Weighted average basic shares | 119,636 | 123,190 | 137,533 |
Dilutive securities: | |||
Stock option and stock award programs | 647 | 642 | 643 |
Weighted average diluted shares | 120,283 | 123,832 | 138,176 |
Weighted-Average Shares - Addit
Weighted-Average Shares - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Common stock potentially outstanding but not included in the computation of diluted earnings per share | |||
Options to purchase shares not included in the computation of diluted earnings per share because the options were anti-dilutive (in shares) | 4.7 | 5.2 | 4.5 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Details) - $ / shares shares in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Payment Arrangement, Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair value of awards | $ 5.86 | $ 4.84 | $ 6.37 |
Omnibus Plans | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares authorized to issues under share-based payments | 8 | ||
Restricted stock units, retention period | 6 months | ||
Omnibus Plans | Performance Unit Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair value of awards | $ 17.22 | $ 17.42 | $ 25.53 |
Performance period (in years) | 3 years | ||
Vesting period (in years) | 3 years | ||
Omnibus Plans | Performance Unit Awards | Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Percentage of earnings | 0.00% | 0.00% | 0.00% |
Omnibus Plans | Performance Unit Awards | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Percentage of earnings | 200.00% | 200.00% | 200.00% |
Omnibus Plans | Share-based Payment Arrangement, Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Expiration period | 10 years | ||
Omnibus Plans | Restricted Stock Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Omnibus Plans | Restricted Stock Units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period (in years) | 1 year |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Share-based compensation expense | $ 9,180 | $ 10,519 | $ 10,507 |
Income tax benefit related to share-based compensation expense | $ 2,357 | $ 3,013 | $ 3,918 |
Share-Based Payments - Performa
Share-Based Payments - Performance-Based Awards (Details) - Performance Unit Awards $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Share-Based Payments | |
Payout percentage (in percentage) | 100.00% |
Performance Unit Awards (in shares) | |
Unvested at the beginning of the period (in shares) | shares | 349 |
Granted (in shares) | shares | 230 |
Vested (in shares) | shares | (28) |
Forfeited (in shares) | shares | (140) |
Unvested at the end of the period (in shares) | shares | 411 |
Performance Unit Awards (in dollars per share) | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 20.88 |
Granted (in dollars per share) | $ / shares | 17.22 |
Vested (in dollar per share) | $ / shares | 22.26 |
Forfeited (in dollars per share) | $ / shares | 20.63 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 18.83 |
Compensation expense Potentially recognized | $ | $ 11.6 |
Weighted average period | 1 year 10 months 24 days |
Share-Based Payments - Service-
Share-Based Payments - Service-Based Awards and Stock Option Awards (Details) - Stock Option Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Options, Number of Outstanding Options | ||
Outstanding at the beginning of the period (in shares) | 5,405 | |
Granted (in shares) | 948 | |
Exercised (in shares) | (152) | |
Forfeited or expired (in shares) | (1,299) | |
Outstanding at the end of the period (in shares) | 4,902 | 5,405 |
Exercisable at the end of the period (in shares) | 4,054 | |
Stock Options, Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 23.04 | |
Granted (in dollars per share) | 18.14 | |
Exercised (in dollars per share) | 14.34 | |
Forfeited or expired (in dollars per share) | 24.09 | |
Outstanding at the end of the period (in dollars per share) | 22.08 | $ 23.04 |
Exercisable at the end of the period (in dollars per share) | $ 23 | |
Stock Options, Weighted Average Remaining Contractual Term | ||
Weighted average remaining contractual term (in years) | 5 years 9 months 18 days | 5 years 4 months 24 days |
Exercisable at September 30, 2019 | 5 years 1 month 6 days | |
Stock Options, Aggregate Intrinsic Value | ||
Outstanding balance at period end (in dollars) | $ 670 | $ 3,161 |
Exercisable at the end of the period (in dollars) | $ 670 |
Share-Based Payments - Schedule
Share-Based Payments - Schedule of weighted average assumptions for valuation of stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Weighted average assumptions relating to the valuation of stock options | |||
Proceeds from exercises of stock options | $ 2,160 | $ 1,350 | $ 17,339 |
Stock Option Awards | |||
Weighted average assumptions relating to the valuation of stock options | |||
Expected life (in years) | 5 years | 5 years | 5 years |
Expected volatility for the Company’s common stock | 30.50% | 27.40% | 25.30% |
Risk-free interest rate | 3.00% | 2.10% | 1.30% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average fair value of the stock options issued (in dollars per share) | $ 5.86 | $ 4.84 | $ 6.37 |
Aggregate fair value of stock options | $ 5,100 | $ 7,700 | $ 13,100 |
Aggregate intrinsic value of options exercised | 900 | 1,300 | 7,700 |
Proceeds from exercises of stock options | 2,200 | 1,400 | 17,300 |
Tax benefit realized for the tax deductions of stock option exercises | 200 | $ 300 | $ 2,900 |
Total unrecognized compensation expenses related to unvested awards | $ 4,400 | ||
Weighted average period for recognition of unvested awards | 1 year 8 months 12 days |
Share-Based Payments - Restrict
Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Restricted stock (in shares) | |
Unvested at the beginning of the period (in shares) | shares | 219 |
Granted (in shares) | shares | 287 |
Vested (in shares) | shares | (169) |
Forfeited (in shares) | shares | (75) |
Unvested at the end of the period (in shares) | shares | 262 |
Restricted Stock (in dollars per share) | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 16.98 |
Granted (in dollars per share) | $ / shares | 18.14 |
Vested (in dollar per share) | $ / shares | 17.77 |
Forfeited (in dollars per share) | $ / shares | 17.84 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 17.53 |
Total unrecognized compensation expenses related to unvested awards | $ | $ 4 |
Weighted average period for recognition of unvested awards | 1 year 8 months 12 days |
Share-Based Payments - Restri_2
Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Restricted stock (in shares) | |
Granted (in shares) | shares | 88 |
Vested (in shares) | shares | (80) |
Forfeited (in shares) | shares | (8) |
Restricted Stock (in dollars per share) | |
Granted (in dollars per share) | $ / shares | $ 18.14 |
Vested (in dollar per share) | $ / shares | 18.14 |
Forfeited (in dollars per share) | $ / shares | $ 18.14 |
Total unrecognized compensation expenses related to unvested awards | $ | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of changes in carrying amounts of goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | $ 535,925 | $ 537,791 |
Acquisitions | 284 | 1,045 |
Foreign currency translation | (5,423) | (2,911) |
Balance at the end of the period | 530,786 | 535,925 |
Sally Beauty Supply | ||
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | 81,217 | 82,670 |
Acquisitions | 284 | 329 |
Foreign currency translation | (4,596) | (1,782) |
Balance at the end of the period | 76,905 | 81,217 |
Beauty Systems Group | ||
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | 454,708 | 455,121 |
Acquisitions | 716 | |
Foreign currency translation | (827) | (1,129) |
Balance at the end of the period | $ 453,881 | $ 454,708 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of other intangible assets, excluding goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | $ 83,573 | $ 107,369 |
Definite-lived Intangible assets, Accumulated Amortization | (64,615) | (78,914) |
Definite-lived Intangible assets, Net | 18,958 | 28,455 |
Total intangible assets, excluding goodwill,Gross Carrying Amount | 126,666 | 151,612 |
Total intangible assets, excluding goodwill, Net | 62,051 | 72,698 |
Trade Names | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Indefinite-lived Intangible assets, Net | 43,093 | 44,243 |
Customer Relationships | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | 43,752 | 58,133 |
Definite-lived Intangible assets, Accumulated Amortization | (33,192) | (41,055) |
Definite-lived Intangible assets, Net | 10,560 | 17,078 |
Distribution Rights | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | 33,364 | 40,280 |
Definite-lived Intangible assets, Accumulated Amortization | (27,477) | (32,080) |
Definite-lived Intangible assets, Net | 5,887 | 8,200 |
Other Intangible Assets | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | 6,457 | 8,956 |
Definite-lived Intangible assets, Accumulated Amortization | (3,946) | (5,779) |
Definite-lived Intangible assets, Net | $ 2,511 | $ 3,177 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Amortization expense | $ 11.3 | $ 11.7 | $ 13.1 |
Minimum | |||
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Definite-lived intangible assets, useful life | 3 years | ||
Maximum | |||
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Definite-lived intangible assets, useful life | 10 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expected future amortization expense related to definite-lived intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Estimated future amortization expense related to intangible assets subject to amortization: | ||
2020 | $ 8,669 | |
2021 | 5,028 | |
2022 | 2,569 | |
2023 | 1,472 | |
2024 | 555 | |
Thereafter | 665 | |
Definite-lived Intangible assets, Net | $ 18,958 | $ 28,455 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Accrued Liabilities | ||
Compensation and benefits | $ 63,005,000 | $ 61,182,000 |
Deferred revenue | 18,165,000 | 18,450,000 |
Interest payable | 17,951,000 | 23,008,000 |
Rental obligations | 11,670,000 | 12,129,000 |
Insurance reserves | 4,567,000 | 4,816,000 |
Property and other taxes | 3,869,000 | 4,607,000 |
Loss contingency obligation | 0 | 14,294,000 |
Operating accruals and other | 49,827,000 | 41,801,000 |
Total accrued liabilities | $ 169,054,000 | $ 180,287,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Fiscal Year: | |
2020 | $ 174,578 |
2021 | 136,900 |
2022 | 95,918 |
2023 | 61,944 |
2024 | 33,803 |
Thereafter | 40,545 |
Total operating lease, future minimum payments due | $ 543,688 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Loss Contingencies [Line Items] | |||
Total rental expense for operating leases | $ 250,400,000 | $ 249,800,000 | $ 242,000,000 |
Outstanding letters of credit | 18,000,000 | 18,700,000 | |
Data security incidents, remaining liability | $ 0 | 14,294,000 | |
Data security incidents | |||
Loss Contingencies [Line Items] | |||
Data security incident expenses | $ 7,900,000 |
Debt - Short-term Debt (Details
Debt - Short-term Debt (Details) - ABL facility - USD ($) | 1 Months Ended | ||
Jul. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instruments | |||
Revolving credit facility | $ 500,000,000 | $ 0 | $ 0 |
Debt instrument term | 5 years | ||
Debt instrument, maturity date | Jul. 6, 2022 | ||
Line of credit facility, commitment fee percentage | 0.20% | ||
Revolving credit facility | $ 482,000,000 | ||
Prime | Minimum | |||
Debt Instruments | |||
Percentage points added to the reference rate | 0.25% | ||
Prime | Maximum | |||
Debt Instruments | |||
Percentage points added to the reference rate | 0.50% | ||
LIBOR | Minimum | |||
Debt Instruments | |||
Percentage points added to the reference rate | 1.25% | ||
LIBOR | Maximum | |||
Debt Instruments | |||
Percentage points added to the reference rate | 1.50% |
Debt - Details of Long-term Deb
Debt - Details of Long-term Debt Table (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instruments | ||
Total | $ 1,609,296 | $ 1,794,500 |
Variable-rate tranche | ||
Debt Instruments | ||
Total | $ 424,000 | 544,500 |
Variable-rate tranche | LIBOR | ||
Debt Instruments | ||
Percentage points added to the reference rate | 2.25% | |
Fixed-rate tranche | ||
Debt Instruments | ||
Total | $ 300,000 | 300,000 |
Interest rate (as a percent) | 4.50% | |
Senior notes due Nov. 2023 | ||
Debt Instruments | ||
Total | $ 197,419 | 200,000 |
Interest rate (as a percent) | 5.50% | |
Senior notes due Dec. 2025 | ||
Debt Instruments | ||
Total | $ 687,877 | $ 750,000 |
Interest rate (as a percent) | 5.625% |
Debt - Details of Long-term D_2
Debt - Details of Long-term Debt Table - Total debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Debt Disclosure [Abstract] | ||
Total | $ 1,609,296 | $ 1,794,500 |
Plus: capital lease obligations | 832 | 883 |
Less: unamortized debt issuance costs and discount, net | 15,585 | 21,074 |
Total debt | $ 1,594,543 | $ 1,774,309 |
Debt - Details of Long-term D_3
Debt - Details of Long-term Debt Table - Total long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Debt Disclosure [Abstract] | ||
Total debt | $ 1,594,543 | $ 1,774,309 |
Less: current maturities | 1 | 5,501 |
Total long-term debt | $ 1,594,542 | $ 1,768,808 |
Debt - Maturities of the Compan
Debt - Maturities of the Company's debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Fiscal Year: | ||
2024 | $ 921,419 | |
Thereafter | 687,877 | |
Total | $ 1,609,296 | $ 1,794,500 |
Debt - Term loan (Details)
Debt - Term loan (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Jul. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instruments | |||||
Aggregate principal amount paid down | $ 777,538 | $ 558,599 | $ 1,216,643 | ||
Gain (loss) on extinguishment of debt | (951) | $ (876) | $ (27,981) | ||
Term loan B | |||||
Debt Instruments | |||||
Aggregate principal amount paid down | 115,000 | ||||
Gain (loss) on extinguishment of debt | $ (1,400) | ||||
Variable-rate tranche | LIBOR | |||||
Debt Instruments | |||||
Debt instrument, variable percentage | 2.25% | ||||
Sally Holdings, LLC | Term Loan B | |||||
Debt Instruments | |||||
Debt instrument term | 7 years | ||||
Debt instrument, face amount | $ 850,000 | ||||
Debt instrument, maturity date | Jul. 5, 2024 | ||||
Sally Holdings, LLC | Variable-rate tranche | |||||
Debt Instruments | |||||
Debt instrument, annual rate on original amount | 0.25% | ||||
Sally Holdings, LLC | Term Loan B | |||||
Debt Instruments | |||||
Basis Points | 0.25% | ||||
Sally Holdings, LLC | Term Loan B | LIBOR | |||||
Debt Instruments | |||||
Debt instrument, variable percentage | 2.25% |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instruments | |||
Gain (loss) on extinguishment of debt | $ (951) | $ (876) | $ (27,981) |
Write off of unamortized debt issuance costs | 700 | ||
Senior notes due Nov. 2023 | |||
Debt Instruments | |||
Debt instrument repurchased, aggregate principal amount | 2,600 | ||
Senior notes due Dec. 2025 | |||
Debt Instruments | |||
Debt instrument repurchased, aggregate principal amount | $ 62,200 | ||
Total tender offer price | 98.10% | ||
Gain (loss) on extinguishment of debt | $ 500 | ||
Gain from discount paid under face value | $ 1,200 |
Derivative Instruments - (Detai
Derivative Instruments - (Details) | 12 Months Ended | |||
Sep. 30, 2019USD ($)instrumentderivative | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jul. 31, 2017USD ($)derivative | |
Derivative Instruments | ||||
Number of derivative instruments held | instrument | 0 | |||
Repayment of debt | $ 777,538,000 | $ 558,599,000 | $ 1,216,643,000 | |
Interest rate caps | Variable-rate tranche | Sally Holdings, LLC | ||||
Derivative Instruments | ||||
Notional Amount | $ 550,000,000 | |||
Derivative instruments, expiration date | Jun. 30, 2023 | |||
Number of interest rate caps | derivative | 2 | |||
Interest rate caps | Term loan B variable tranche | Sally Holdings, LLC | ||||
Derivative Instruments | ||||
Notional Amount | $ 115,000,000 | |||
Number of interest rate caps | derivative | 1 | |||
Repayment of debt | $ 115,000,000 | |||
Debt principal amount | 115,000,000 | |||
Reclassified loss from AOCL | 1,200,000 | |||
Interest rate caps designated as cash flow hedges to be reclassified in to interest expense over next 12 months | 600,000 | |||
Reclassified loss from AOCL, net | 1,600,000 | |||
Reclassification out of Accumulated Other Comprehensive Income | Foreign Exchange Contract | ||||
Derivative Instruments | ||||
Foreign currency forwards designated as cash flow hedges to be reclassified in to cost of goods sold over next 12 months | 300,000 | |||
Foreign currency forwards designated as cash flow hedges to be reclassified in to cost of goods sold | $ 700,000 | |||
Selling, General and Administrative Expenses | Non-Designated | Foreign Exchange Contract | ||||
Derivative Instruments | ||||
Gain (loss) on derivative instrument | $ 1,600,000 | $ (2,800,000) |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, expense recognized | $ 6,200,000 | $ 6,500,000 | $ 7,100,000 |
Defined contributionplan, plan name | 401(k) Plans | ||
Profit sharing plan, expense recognized | $ 0 | $ 0 | $ 0 |
U.S. 401(k) Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contributionplan, plan name | U.S. 401(k) Plan | ||
Puerto Rico 401(k) Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contributionplan, plan name | Puerto Rico 401(k) Plan | ||
Defined Contribution Plan, minimum employment period for contribution to plan | 1 year |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Unremitted earnings of foreign operations | $ 3,000 | |||
Reversal amount of tax benefit as a result of change in the regulations | $ 2,500 | |||
Current: | ||||
Federal | 59,855 | $ 68,608 | $ 97,332 | |
Foreign | 10,132 | 11,039 | 10,394 | |
State | 15,339 | 11,344 | 8,700 | |
Total current portion | 85,326 | 90,991 | 116,426 | |
Deferred: | ||||
Federal | 4,905 | (26,001) | 14,559 | |
Foreign | (1,498) | 1,868 | (2,314) | |
State | 1,808 | 3,522 | 1,951 | |
Total deferred portion | 5,215 | (20,611) | 14,196 | |
Total provision for income taxes | $ 90,541 | $ 70,380 | $ 130,622 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between US Federal Statutory Income Tax Rate and Effective Income Tax Rate (Details) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21.00% | 24.50% | 35.00% |
State income taxes, net of federal tax benefit | 3.40% | 3.20% | 2.20% |
Effect of foreign operations | 0.60% | 0.30% | |
Deferred tax revaluation, including adoption of income tax method changes | (11.50%) | ||
Deemed repatriation tax | (0.30%) | 3.60% | |
Other, net | 0.90% | 1.00% | 0.30% |
Effective tax rate | 25.00% | 21.40% | 37.80% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Deferred tax assets attributable to: | |||
Foreign loss carryforwards | $ 27,097,000 | $ 28,612,000 | |
Accrued liabilities | 12,248,000 | 15,676,000 | |
Share-based compensation expense | 9,494,000 | 10,762,000 | |
U.S. foreign tax credits | 8,807,000 | 8,807,000 | |
Unrecognized tax benefits | 320,000 | 322,000 | |
Inventory adjustments | 1,242,000 | ||
Other | 651,000 | 442,000 | |
Total deferred tax assets | 59,859,000 | 64,621,000 | |
Valuation allowance | (38,287,000) | (40,906,000) | |
Total deferred tax assets, net | 21,572,000 | 23,715,000 | |
Deferred tax liabilities attributable to: | |||
Depreciation and amortization | 94,920,000 | 92,531,000 | |
Inventory adjustments | 673,000 | ||
Total deferred tax liabilities | 94,920,000 | 93,204,000 | |
Net deferred tax liability | 73,348,000 | 69,489,000 | |
Domestic earnings before provision for income taxes | 328,300,000 | 300,400,000 | $ 332,500,000 |
Foreign earnings before provision for income taxes | 33,900,000 | 28,000,000 | $ 13,200,000 |
Deferred taxes on accumulated undistributed earnings of our foreign operations | 0 | ||
Total operating loss carry-forward | 97,300,000 | 103,000,000 | |
Operating loss carry-forward, subject to valuation allowance | 79,000,000 | 88,600,000 | |
Amount of operating loss carry-forwards with an expiration date | 7,700,000 | ||
Amount of operating loss carry-forwards without an expiration date | 89,500,000 | ||
Total tax credit carryforwards | 11,200,000 | 11,600,000 | |
Expiring tax credit carryforwards | 1,100,000 | ||
Non-expiring tax credit carryforwards | 1,300,000 | ||
Total Tax credit carryforwards, subject to a valuation allowance | 10,100,000 | $ 10,200,000 | |
U.S. foreign | |||
Deferred tax liabilities attributable to: | |||
Expiring tax credit carryforwards | $ 8,800,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the changes in the amount of unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Reconciliation of the changes in the amount of unrecognized tax benefits | ||
Balance at beginning of the fiscal year | $ 1,368 | $ 1,467 |
Decreases related to prior year tax positions | (4) | (3) |
Increases related to current year tax positions | 954 | 309 |
Lapse of statute | (318) | (405) |
Balance at end of fiscal year | 2,000 | 1,368 |
Total unrecognized tax benefits of accrued interest and penalties | $ 200 | $ 200 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019Business | Sep. 30, 2018USD ($)store | Sep. 30, 2017Business | |
Acquisitions | |||
Number of businesses acquired | Business | 0 | 0 | |
Chalut | |||
Acquisitions | |||
Number of beauty supply stores | store | 21 | ||
Cost of acquisition | $ 8.8 | ||
Intangible assets subject to amortization | 4.7 | ||
Goodwill expected to be deducted for tax purposes | $ 0.7 |
Segments and Disaggregated Re_3
Segments and Disaggregated Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Segments | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net sales: | |||||||||||
Total net sales | $ 965,937 | $ 975,169 | $ 945,852 | $ 989,453 | $ 965,997 | $ 996,283 | $ 975,321 | $ 994,964 | $ 3,876,411 | $ 3,932,565 | $ 3,938,317 |
Segment operating earnings: | |||||||||||
Segment operating earnings | 458,473 | 426,589 | 478,597 | ||||||||
Restructuring | 682 | (33,615) | (22,679) | ||||||||
Interest expense | (96,309) | (98,162) | (132,899) | ||||||||
Earnings before provision for income taxes | 362,164 | 328,427 | 345,698 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 107,658 | 108,829 | 112,323 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 107,755 | 86,507 | 89,666 | ||||||||
Total assets: | |||||||||||
Assets | 2,098,446 | 2,097,414 | $ 2,098,446 | $ 2,097,414 | $ 2,099,007 | ||||||
Number of single customer accounted for ten percent or more of revenue | 10.00% | 10.00% | 10.00% | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 319,628 | 308,357 | $ 319,628 | $ 308,357 | $ 313,717 | ||||||
United States | |||||||||||
Net sales: | |||||||||||
Total net sales | 3,169,821 | 3,188,993 | 3,248,662 | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 259,815 | 234,475 | 259,815 | 234,475 | 230,698 | ||||||
Foreign | |||||||||||
Net sales: | |||||||||||
Total net sales | 706,590 | 743,572 | 689,655 | ||||||||
United Kingdom | |||||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 24,476 | 29,493 | 24,476 | 29,493 | 32,771 | ||||||
Other countries | |||||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 35,337 | 44,389 | 35,337 | 44,389 | 50,248 | ||||||
Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 605,984 | 603,078 | 640,098 | ||||||||
Total assets: | |||||||||||
Assets | 1,985,640 | 1,988,668 | 1,985,640 | 1,988,668 | 1,990,529 | ||||||
Corporate | |||||||||||
Segment operating earnings: | |||||||||||
Unallocated expenses | (148,193) | (142,874) | (138,822) | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 13,529 | 15,079 | 17,141 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 18,956 | 23,620 | 18,153 | ||||||||
Total assets: | |||||||||||
Assets | 112,806 | 108,746 | 112,806 | 108,746 | 108,478 | ||||||
Sally Beauty Supply | |||||||||||
Net sales: | |||||||||||
Total net sales | 2,293,094 | 2,333,838 | 2,345,116 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 65,561 | 64,017 | 63,427 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 69,802 | 46,289 | 52,178 | ||||||||
Sally Beauty Supply | Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 366,412 | 362,853 | 385,407 | ||||||||
Total assets: | |||||||||||
Assets | 973,304 | 995,546 | 973,304 | 995,546 | 1,025,545 | ||||||
Beauty Systems Group | |||||||||||
Net sales: | |||||||||||
Total net sales | 1,583,317 | 1,598,727 | 1,593,201 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 28,568 | 29,733 | 31,755 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 18,997 | 16,598 | 19,335 | ||||||||
Beauty Systems Group | Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 239,572 | 240,225 | 254,691 | ||||||||
Total assets: | |||||||||||
Assets | $ 1,012,336 | $ 993,122 | $ 1,012,336 | $ 993,122 | $ 964,984 |
Segments and Disaggregated Re_4
Segments and Disaggregated Revenue - Schedule of Disaggregation of Net Sales by Segment (Details) - Sales Revenue, Net | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Sally Beauty Supply | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Sally Beauty Supply | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Sally Beauty Supply | Hair color | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 29.40% | 26.90% | 26.00% |
Sally Beauty Supply | Hair care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 20.40% | 20.90% | 21.10% |
Sally Beauty Supply | Skin and nail care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 14.80% | 15.70% | 15.70% |
Sally Beauty Supply | Styling tools | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 13.50% | 13.90% | 14.10% |
Sally Beauty Supply | Multicultural products | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 7.10% | 7.50% | 7.90% |
Sally Beauty Supply | Salon supplies and accessories | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 6.60% | 7.10% | 7.30% |
Sally Beauty Supply | Other Beauty items | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 8.20% | 8.00% | 7.90% |
Sally Beauty Supply | Sales channel, directly to consumer | Company-operated stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 96.90% | 97.50% | 98.10% |
Sally Beauty Supply | Sales channel, through intermediary | E-commerce | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 2.80% | 2.20% | 1.60% |
Sally Beauty Supply | Sales channel, through intermediary | Franchise stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 0.30% | 0.30% | 0.30% |
Beauty Systems Group | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Beauty Systems Group | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Beauty Systems Group | Hair color | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 39.50% | 38.40% | 37.00% |
Beauty Systems Group | Hair care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 35.10% | 33.70% | 34.40% |
Beauty Systems Group | Skin and nail care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 8.10% | 8.70% | 9.00% |
Beauty Systems Group | Styling tools | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 3.40% | 3.90% | 4.20% |
Beauty Systems Group | Other Beauty items | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 6.30% | 6.70% | 6.90% |
Beauty Systems Group | Promotional items | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 7.60% | 8.60% | 8.50% |
Beauty Systems Group | Sales channel, directly to consumer | Company-operated stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 69.40% | 68.70% | 68.40% |
Beauty Systems Group | Sales channel, through intermediary | E-commerce | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 4.80% | 3.70% | 3.30% |
Beauty Systems Group | Sales channel, through intermediary | Franchise stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 7.60% | 7.70% | 7.70% |
Beauty Systems Group | Sales channel, through intermediary | Distributor sales consultants | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 18.20% | 19.90% | 20.60% |
Separate Financial Informatio_3
Separate Financial Information of Guarantor Subsidiaries - (Details) | 12 Months Ended |
Sep. 30, 2019 | |
Senior notes due Nov. 2023 | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Debt maturity year | 2023 |
Senior notes due Dec. 2025 | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Debt maturity year | 2025 |
Guarantor Subsidiaries | ABL Facility | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Percentage of guarantor subsidiaries owned by parent | 100.00% |
Separate Financial Informatio_4
Separate Financial Information of Guarantor Subsidiaries - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Assets | ||||
Cash and cash equivalents | $ 71,495 | $ 77,295 | $ 63,759 | $ 86,622 |
Trade and other accounts receivable, net | 104,539 | 90,490 | ||
Inventory | 952,907 | 944,338 | ||
Other current assets | 34,612 | 42,960 | ||
Property and equipment, net | 319,628 | 308,357 | 313,717 | |
Goodwill and other intangible assets, net | 592,837 | 608,623 | ||
Other assets | 22,428 | 25,351 | ||
Total assets | 2,098,446 | 2,097,414 | 2,099,007 | |
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 278,688 | 303,241 | ||
Accrued liabilities | 169,054 | 180,287 | ||
Income taxes payable | 8,336 | 2,144 | ||
Long-term debt | 1,594,543 | 1,774,309 | ||
Other liabilities | 27,757 | 30,022 | ||
Deferred income tax liabilities, net | 80,391 | 75,967 | ||
Total liabilities | 2,158,769 | 2,365,970 | ||
Total stockholders’ (deficit) equity | (60,323) | (268,556) | (363,616) | (276,166) |
Total liabilities and stockholders’ deficit | 2,098,446 | 2,097,414 | ||
Parent | ||||
Assets | ||||
Trade and other accounts receivable, net | 4 | |||
Other current assets | 1,436 | 2,010 | ||
Property and equipment, net | 6 | 8 | ||
Investment in subsidiaries | 1,621,843 | 1,368,927 | ||
Other assets | 1,446 | 1,325 | ||
Total assets | 1,624,731 | 1,372,274 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 48 | 38 | ||
Due to affiliates | 1,672,322 | 1,629,411 | ||
Accrued liabilities | 188 | 234 | ||
Income taxes payable | 6,055 | 585 | ||
Other liabilities | 6,441 | 10,562 | ||
Total liabilities | 1,685,054 | 1,640,830 | ||
Total stockholders’ (deficit) equity | (60,323) | (268,556) | ||
Total liabilities and stockholders’ deficit | 1,624,731 | 1,372,274 | ||
Sally Holdings and Sally Capital | ||||
Assets | ||||
Cash and cash equivalents | 10 | 10 | 10 | 28,372 |
Other current assets | 132 | 111 | ||
Investment in subsidiaries | 4,374,334 | 4,044,669 | ||
Other assets | 3,499 | 10,242 | ||
Total assets | 4,377,975 | 4,055,032 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Due to affiliates | 1,142,324 | 888,141 | ||
Accrued liabilities | 17,937 | 23,019 | ||
Income taxes payable | 2,161 | 1,519 | ||
Long-term debt | 1,593,710 | 1,773,426 | ||
Total liabilities | 2,756,132 | 2,686,105 | ||
Total stockholders’ (deficit) equity | 1,621,843 | 1,368,927 | ||
Total liabilities and stockholders’ deficit | 4,377,975 | 4,055,032 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 41,009 | 29,050 | 22,090 | 22,368 |
Trade and other accounts receivable, net | 65,746 | 53,295 | ||
Due from affiliates | 2,878,072 | 2,598,681 | ||
Inventory | 722,830 | 714,000 | ||
Other current assets | 22,480 | 27,422 | ||
Property and equipment, net | 258,132 | 232,941 | ||
Investment in subsidiaries | 385,629 | 380,166 | ||
Goodwill and other intangible assets, net | 452,645 | 459,348 | ||
Other assets | (581) | (4,797) | ||
Total assets | 4,825,962 | 4,490,106 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 235,940 | 233,936 | ||
Accrued liabilities | 121,375 | 125,179 | ||
Income taxes payable | 1 | |||
Long-term debt | 1 | 1 | ||
Other liabilities | 17,639 | 15,250 | ||
Deferred income tax liabilities, net | 76,672 | 71,071 | ||
Total liabilities | 451,628 | 445,437 | ||
Total stockholders’ (deficit) equity | 4,374,334 | 4,044,669 | ||
Total liabilities and stockholders’ deficit | 4,825,962 | 4,490,106 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 30,476 | 48,235 | $ 41,659 | $ 35,882 |
Trade and other accounts receivable, net | 38,793 | 37,191 | ||
Inventory | 230,077 | 230,338 | ||
Other current assets | 10,564 | 13,417 | ||
Property and equipment, net | 61,490 | 75,408 | ||
Goodwill and other intangible assets, net | 140,192 | 149,275 | ||
Other assets | 18,064 | 18,581 | ||
Total assets | 529,656 | 572,445 | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Accounts payable | 42,700 | 69,267 | ||
Due to affiliates | 63,426 | 81,129 | ||
Accrued liabilities | 29,554 | 31,855 | ||
Income taxes payable | 119 | 40 | ||
Long-term debt | 832 | 882 | ||
Other liabilities | 3,677 | 4,210 | ||
Deferred income tax liabilities, net | 3,719 | 4,896 | ||
Total liabilities | 144,027 | 192,279 | ||
Total stockholders’ (deficit) equity | 385,629 | 380,166 | ||
Total liabilities and stockholders’ deficit | 529,656 | 572,445 | ||
Consolidating Eliminations | ||||
Assets | ||||
Due from affiliates | (2,878,072) | (2,598,681) | ||
Investment in subsidiaries | (6,381,806) | (5,793,762) | ||
Total assets | (9,259,878) | (8,392,443) | ||
Liabilities and Stockholders’ (Deficit) Equity | ||||
Due to affiliates | (2,878,072) | (2,598,681) | ||
Total liabilities | (2,878,072) | (2,598,681) | ||
Total stockholders’ (deficit) equity | (6,381,806) | (5,793,762) | ||
Total liabilities and stockholders’ deficit | $ (9,259,878) | $ (8,392,443) |
Separate Financial Informatio_5
Separate Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Earnings and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | $ 965,937 | $ 975,169 | $ 945,852 | $ 989,453 | $ 965,997 | $ 996,283 | $ 975,321 | $ 994,964 | $ 3,876,411 | $ 3,932,565 | $ 3,938,317 |
Cost of goods sold | 1,965,869 | 1,988,152 | 1,973,422 | ||||||||
Gross profit | 479,291 | 482,222 | 468,324 | 480,705 | 478,092 | 493,370 | 486,322 | 486,629 | 1,910,542 | 1,944,413 | 1,964,895 |
Selling, general and administrative expenses | 1,452,751 | 1,484,209 | 1,463,619 | ||||||||
Restructuring | (682) | 33,615 | 22,679 | ||||||||
Operating earnings | 458,473 | 426,589 | 478,597 | ||||||||
Interest expense (income) | 96,309 | 98,162 | 132,899 | ||||||||
Earnings before provision for income taxes | 362,164 | 328,427 | 345,698 | ||||||||
Provision (benefit) for income taxes | 90,541 | 70,380 | 130,622 | ||||||||
Net earnings | $ 69,007 | $ 71,164 | $ 65,725 | $ 65,727 | $ 55,186 | $ 58,226 | $ 61,371 | $ 83,264 | 271,623 | 258,047 | 215,076 |
Other comprehensive income (loss), net of tax | (27,296) | (8,155) | 18,215 | ||||||||
Total comprehensive income | 244,327 | 249,892 | 233,291 | ||||||||
Parent | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Selling, general and administrative expenses | 11,331 | 10,957 | 10,939 | ||||||||
Operating earnings | (11,331) | (10,957) | (10,939) | ||||||||
Earnings before provision for income taxes | (11,331) | (10,957) | (10,939) | ||||||||
Provision (benefit) for income taxes | (2,742) | (2,734) | (4,246) | ||||||||
Equity in earnings of subsidiaries, net of tax | 280,212 | 266,270 | 221,769 | ||||||||
Net earnings | 271,623 | 258,047 | 215,076 | ||||||||
Total comprehensive income | 271,623 | 258,047 | 215,076 | ||||||||
Sally Holdings and Sally Capital | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Selling, general and administrative expenses | 607 | 1,538 | 526 | ||||||||
Operating earnings | (607) | (1,538) | (526) | ||||||||
Interest expense (income) | 96,464 | 98,332 | 132,696 | ||||||||
Earnings before provision for income taxes | (97,071) | (99,870) | (133,222) | ||||||||
Provision (benefit) for income taxes | (24,888) | (28,787) | (51,726) | ||||||||
Equity in earnings of subsidiaries, net of tax | 352,395 | 337,353 | 303,265 | ||||||||
Net earnings | 280,212 | 266,270 | 221,769 | ||||||||
Other comprehensive income (loss), net of tax | (4,566) | 2,449 | (1,084) | ||||||||
Total comprehensive income | 275,646 | 268,719 | 220,685 | ||||||||
Guarantor Subsidiaries | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | 3,131,360 | 3,152,120 | 3,209,039 | ||||||||
Related party sales | 2,201 | 2,294 | 2,501 | ||||||||
Cost of goods sold | 1,568,663 | 1,581,385 | 1,590,184 | ||||||||
Gross profit | 1,564,898 | 1,573,029 | 1,621,356 | ||||||||
Selling, general and administrative expenses | 1,135,926 | 1,136,312 | 1,130,615 | ||||||||
Restructuring | (682) | 33,615 | 22,679 | ||||||||
Operating earnings | 429,654 | 403,102 | 468,062 | ||||||||
Interest expense (income) | 5 | (3) | 6 | ||||||||
Earnings before provision for income taxes | 429,649 | 403,105 | 468,056 | ||||||||
Provision (benefit) for income taxes | 109,230 | 73,747 | 177,383 | ||||||||
Equity in earnings of subsidiaries, net of tax | 31,976 | 7,995 | 12,592 | ||||||||
Net earnings | 352,395 | 337,353 | 303,265 | ||||||||
Total comprehensive income | 352,395 | 337,353 | 303,265 | ||||||||
Non-Guarantor Subsidiaries | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | 745,051 | 780,445 | 729,278 | ||||||||
Cost of goods sold | 399,407 | 409,061 | 385,739 | ||||||||
Gross profit | 345,644 | 371,384 | 343,539 | ||||||||
Selling, general and administrative expenses | 304,887 | 335,402 | 321,539 | ||||||||
Operating earnings | 40,757 | 35,982 | 22,000 | ||||||||
Interest expense (income) | (160) | (167) | 197 | ||||||||
Earnings before provision for income taxes | 40,917 | 36,149 | 21,803 | ||||||||
Provision (benefit) for income taxes | 8,941 | 28,154 | 9,211 | ||||||||
Net earnings | 31,976 | 7,995 | 12,592 | ||||||||
Other comprehensive income (loss), net of tax | (22,730) | (10,604) | 19,299 | ||||||||
Total comprehensive income | 9,246 | (2,609) | 31,891 | ||||||||
Consolidating Eliminations | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Related party sales | (2,201) | (2,294) | (2,501) | ||||||||
Cost of goods sold | (2,201) | (2,294) | (2,501) | ||||||||
Equity in earnings of subsidiaries, net of tax | (664,583) | (611,618) | (537,626) | ||||||||
Net earnings | (664,583) | (611,618) | (537,626) | ||||||||
Total comprehensive income | $ (664,583) | $ (611,618) | $ (537,626) |
Separate Financial Informatio_6
Separate Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | $ 320,415 | $ 372,661 | $ 343,286 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (92,443) | (86,138) | (89,625) |
Acquisitions, net of cash acquired | (3,424) | (9,175) | |
Net cash used by investing activities | (95,867) | (95,313) | (89,625) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 593,504 | 461,819 | 1,277,250 |
Repayments of long-term debt | (777,538) | (558,599) | (1,216,643) |
Debt issuance costs | (1,151) | (8,376) | |
Payments for common stock repurchased | (47,434) | (166,701) | (346,873) |
Proceeds from exercises of stock options | 2,160 | 1,350 | 17,339 |
Net cash used by financing activities | (229,308) | (263,282) | (277,303) |
Effect of foreign exchange rate changes on cash and cash equivalents | (1,040) | (530) | 779 |
Net increase (decrease) in cash and cash equivalents | (5,800) | 13,536 | (22,863) |
Cash and cash equivalents, beginning of period | 77,295 | 63,759 | 86,622 |
Cash and cash equivalents, end of period | 71,495 | 77,295 | 63,759 |
Parent | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 2,364 | 23,424 | 4,095 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (1) | ||
Net cash used by investing activities | (1) | ||
Cash Flows from Financing Activities: | |||
Payments for common stock repurchased | (47,434) | (166,701) | (346,873) |
Proceeds from exercises of stock options | 2,160 | 1,350 | 17,339 |
Due to affiliates | 42,911 | 141,927 | 325,439 |
Net cash used by financing activities | (2,363) | (23,424) | (4,095) |
Sally Holdings and Sally Capital | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | (70,150) | (62,948) | (72,779) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 593,500 | 461,814 | 1,277,250 |
Repayments of long-term debt | (777,533) | (558,000) | (1,215,940) |
Debt issuance costs | (1,151) | (8,376) | |
Due to affiliates | 254,183 | 160,285 | (8,517) |
Net cash used by financing activities | 70,150 | 62,948 | 44,417 |
Net increase (decrease) in cash and cash equivalents | (28,362) | ||
Cash and cash equivalents, beginning of period | 10 | 10 | 28,372 |
Cash and cash equivalents, end of period | 10 | 10 | 10 |
Guarantor Subsidiaries | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 373,313 | 384,958 | 386,604 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (79,379) | (68,689) | (64,000) |
Acquisitions, net of cash acquired | (2,584) | ||
Due from affiliates | (279,391) | (309,310) | (322,866) |
Net cash used by investing activities | (361,354) | (377,999) | (386,866) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 4 | 5 | |
Repayments of long-term debt | (4) | (4) | (16) |
Net cash used by financing activities | 1 | (16) | |
Net increase (decrease) in cash and cash equivalents | 11,959 | 6,960 | (278) |
Cash and cash equivalents, beginning of period | 29,050 | 22,090 | 22,368 |
Cash and cash equivalents, end of period | 41,009 | 29,050 | 22,090 |
Non-Guarantor Subsidiaries | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 14,888 | 27,227 | 25,366 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (13,063) | (17,449) | (25,625) |
Acquisitions, net of cash acquired | (840) | (9,175) | |
Net cash used by investing activities | (13,903) | (26,624) | (25,625) |
Cash Flows from Financing Activities: | |||
Repayments of long-term debt | (1) | (595) | (687) |
Due to affiliates | (17,703) | 7,098 | 5,944 |
Net cash used by financing activities | (17,704) | 6,503 | 5,257 |
Effect of foreign exchange rate changes on cash and cash equivalents | (1,040) | (530) | 779 |
Net increase (decrease) in cash and cash equivalents | (17,759) | 6,576 | 5,777 |
Cash and cash equivalents, beginning of period | 48,235 | 41,659 | 35,882 |
Cash and cash equivalents, end of period | 30,476 | 48,235 | 41,659 |
Consolidating Eliminations | |||
Cash Flows from Investing Activities: | |||
Due from affiliates | 279,391 | 309,310 | 322,866 |
Net cash used by investing activities | 279,391 | 309,310 | 322,866 |
Cash Flows from Financing Activities: | |||
Due to affiliates | (279,391) | (309,310) | (322,866) |
Net cash used by financing activities | $ (279,391) | $ (309,310) | $ (322,866) |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Expense and Gains (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost And Reserve [Line Items] | |||
Restructuring expense and gain | $ (682) | $ 33,615 | $ 22,679 |
Restructuring charges | (682) | 33,615 | 22,679 |
Supply Chain Modernization | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring expense and gain | (4,662) | ||
Restructuring charges | 3,747 | ||
2018 Restructuring Plan | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring charges | $ 3,980 | $ 33,615 | |
2017 Restructuring Plan | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring charges | $ 22,679 |
Restructuring (Details)
Restructuring (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017Office | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Changes in restructuring reserve | ||||
Restructuring charges | $ (682) | $ 33,615 | $ 22,679 | |
Supply Chain Modernization | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 3,747 | |||
Cash Payments | 2,889 | |||
Restructuring reserve, ending balance | 858 | |||
Supply Chain Modernization | Secondary Headquarters and Fulfillment Center | ||||
Changes in restructuring reserve | ||||
Gain on sale of properties | 8,400 | |||
Supply Chain Modernization | Corporate | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 700 | |||
Supply Chain Modernization | Sally Beauty Supply | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 1,500 | |||
Supply Chain Modernization | Beauty Systems Group | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 1,500 | |||
2018 Restructuring Plan | ||||
Changes in restructuring reserve | ||||
Restructuring reserve, beginning balance | 8,797 | |||
Restructuring charges | 3,980 | 33,615 | ||
Cash Payments | 12,707 | |||
Restructuring reserve, ending balance | 70 | 8,797 | ||
2018 Restructuring Plan | Corporate | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 2,800 | |||
2018 Restructuring Plan | Sally Beauty Supply | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 1,100 | |||
2017 Restructuring Plan | ||||
Changes in restructuring reserve | ||||
Restructuring charges | $ 22,679 | |||
Number of administrative offices closed | Office | 4 | |||
Workforce reductions | Supply Chain Modernization | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 2,502 | |||
Cash Payments | 1,848 | |||
Restructuring reserve, ending balance | 654 | |||
Workforce reductions | 2018 Restructuring Plan | ||||
Changes in restructuring reserve | ||||
Restructuring reserve, beginning balance | 3,444 | |||
Restructuring charges | 643 | |||
Cash Payments | 4,087 | |||
Restructuring reserve, ending balance | 3,444 | |||
Facility Closures | Supply Chain Modernization | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 1,021 | |||
Cash Payments | 817 | |||
Restructuring reserve, ending balance | 204 | |||
Other | Supply Chain Modernization | ||||
Changes in restructuring reserve | ||||
Restructuring charges | 224 | |||
Cash Payments | 224 | |||
Other | 2018 Restructuring Plan | ||||
Changes in restructuring reserve | ||||
Restructuring reserve, beginning balance | 2,266 | |||
Restructuring charges | 835 | |||
Cash Payments | 3,031 | |||
Restructuring reserve, ending balance | 70 | 2,266 | ||
Consulting | 2018 Restructuring Plan | ||||
Changes in restructuring reserve | ||||
Restructuring reserve, beginning balance | 3,087 | |||
Restructuring charges | 2,502 | |||
Cash Payments | $ 5,589 | |||
Restructuring reserve, ending balance | $ 3,087 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 965,937 | $ 975,169 | $ 945,852 | $ 989,453 | $ 965,997 | $ 996,283 | $ 975,321 | $ 994,964 | $ 3,876,411 | $ 3,932,565 | $ 3,938,317 |
Gross profit | 479,291 | 482,222 | 468,324 | 480,705 | 478,092 | 493,370 | 486,322 | 486,629 | 1,910,542 | 1,944,413 | 1,964,895 |
Net earnings | $ 69,007 | $ 71,164 | $ 65,725 | $ 65,727 | $ 55,186 | $ 58,226 | $ 61,371 | $ 83,264 | $ 271,623 | $ 258,047 | $ 215,076 |
Earnings per share: | |||||||||||
Basic | $ 0.58 | $ 0.59 | $ 0.55 | $ 0.55 | $ 0.46 | $ 0.48 | $ 0.49 | $ 0.65 | $ 2.27 | $ 2.09 | $ 1.56 |
Diluted | $ 0.58 | $ 0.59 | $ 0.54 | $ 0.54 | $ 0.46 | $ 0.48 | $ 0.49 | $ 0.65 | $ 2.26 | $ 2.08 | $ 1.56 |