Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2022 | Jul. 29, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | SALLY BEAUTY HOLDINGS, INC. | |
Entity Central Index Key | 0001368458 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2022 | |
Trading Symbol | SBH | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 1-33145 | |
Entity Tax Identification Number | 36-2257936 | |
Entity Address, Address Line One | 3001 Colorado Boulevard | |
Entity Address, City or Town | Denton | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76210 | |
City Area Code | 940 | |
Local Phone Number | 898-7500 | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 107,016,939 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 101,318 | $ 400,959 |
Trade accounts receivable, net | 31,462 | 32,623 |
Accounts receivable, other | 35,911 | 33,958 |
Inventory | 1,014,622 | 871,349 |
Other current assets | 59,806 | 44,686 |
Total current assets | 1,243,119 | 1,383,575 |
Property and equipment, net of accumulated depreciation of $808,298 at June 30, 2022, and $767,403 at September 30, 2021 | 289,814 | 307,377 |
Operating lease assets | 549,493 | 537,673 |
Goodwill | 533,147 | 541,209 |
Intangible assets, excluding goodwill, net of accumulated amortization of $40,336 at June 30, 2022, and $38,957 at September 30, 2021 | 50,386 | 55,532 |
Other assets | 19,907 | 21,766 |
Total assets | 2,685,866 | 2,847,132 |
Current liabilities: | ||
Current maturities of long-term debt | 167,169 | 194 |
Accounts payable | 279,359 | 291,632 |
Accrued liabilities | 165,996 | 206,155 |
Current operating lease liabilities | 159,452 | 156,234 |
Income taxes payable | 2,985 | 10,666 |
Total current liabilities | 774,961 | 664,881 |
Long-term debt | 1,083,924 | 1,382,530 |
Long-term operating lease liabilities | 421,072 | 404,147 |
Other liabilities | 16,781 | 29,056 |
Deferred income tax liabilities, net | 93,257 | 85,777 |
Total liabilities | 2,389,995 | 2,566,391 |
Stockholders’ equity: | ||
Common stock, $0.01 par value. Authorized 500,000 shares; 107,017 and 113,138 shares issued and 106,963 and 112,913 shares outstanding at June 30, 2022, and September 30, 2021, respectively | 1,070 | 1,129 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Additional paid-in capital | 2,339 | 17,286 |
Accumulated earnings | 418,832 | 356,967 |
Accumulated other comprehensive loss, net of tax | (126,370) | (94,641) |
Total stockholders’ equity | 295,871 | 280,741 |
Total liabilities and stockholders’ equity | $ 2,685,866 | $ 2,847,132 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Statement Of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation (in dollars) | $ 808,298 | $ 767,403 |
Intangible assets, excluding goodwill, accumulated amortization (in dollars) | $ 40,336 | $ 38,957 |
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 | 107,017,000 | 113,138,000 |
Common stock, shares outstanding | 106,963,000 | 112,913,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 961,467 | $ 1,022,387 | $ 2,853,105 | $ 2,884,737 |
Cost of goods sold | 471,259 | 507,981 | 1,397,436 | 1,432,378 |
Gross profit | 490,208 | 514,406 | 1,455,669 | 1,452,359 |
Selling, general and administrative expenses | 390,961 | 386,481 | 1,156,082 | 1,143,738 |
Restructuring | 44 | 508 | 1,143 | 1,371 |
Operating earnings | 99,203 | 127,417 | 298,444 | 307,250 |
Interest expense | 35,977 | 23,452 | 76,113 | 73,313 |
Earnings before provision for income taxes | 63,226 | 103,965 | 222,331 | 233,937 |
Provision for income taxes | 16,659 | 27,759 | 60,117 | 62,228 |
Net earnings | $ 46,567 | $ 76,206 | $ 162,214 | $ 171,709 |
Earnings per share: | ||||
Basic | $ 0.44 | $ 0.68 | $ 1.48 | $ 1.52 |
Diluted | $ 0.43 | $ 0.66 | $ 1.46 | $ 1.50 |
Weighted-average shares: | ||||
Basic | 106,940 | 112,739 | 109,238 | 112,605 |
Diluted | 108,526 | 114,927 | 110,907 | 114,274 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net earnings | $ 46,567 | $ 76,206 | $ 162,214 | $ 171,709 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (27,384) | 6,617 | (34,645) | 23,734 |
Interest rate caps, net of tax | 2,050 | 471 | 2,328 | 646 |
Foreign exchange contracts, net of tax | 432 | (191) | 588 | (1,211) |
Other comprehensive (loss) income, net of tax | (24,902) | 6,897 | (31,729) | 23,169 |
Total comprehensive income | $ 21,665 | $ 83,103 | $ 130,485 | $ 194,878 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss |
Balance at Sep. 30, 2020 | $ 15,443 | $ 1,124 | $ 1,913 | $ 117,109 | $ (104,703) |
Balance (in shares) at Sep. 30, 2020 | 112,405 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | 57,191 | 57,191 | |||
Other comprehensive income (loss) | 23,588 | 23,588 | |||
Share-based compensation | 2,893 | 2,893 | |||
Stock issued for equity awards | $ 2 | (2) | |||
Stock issued for equity awards (in shares) | 158 | ||||
Employee withholding taxes paid related to net share settlement | (249) | $ (1) | (248) | ||
Employee withholding taxes paid related to net share settlement (in shares) | (25) | ||||
Balance at Dec. 31, 2020 | 98,866 | $ 1,125 | 4,556 | 174,300 | (81,115) |
Balance (in shares) at Dec. 31, 2020 | 112,538 | ||||
Balance at Sep. 30, 2020 | 15,443 | $ 1,124 | 1,913 | 117,109 | (104,703) |
Balance (in shares) at Sep. 30, 2020 | 112,405 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | 171,709 | ||||
Other comprehensive income (loss) | 23,169 | ||||
Balance at Jun. 30, 2021 | 222,270 | $ 1,128 | 13,858 | 288,818 | (81,534) |
Balance (in shares) at Jun. 30, 2021 | 112,780 | ||||
Balance at Dec. 31, 2020 | 98,866 | $ 1,125 | 4,556 | 174,300 | (81,115) |
Balance (in shares) at Dec. 31, 2020 | 112,538 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | 38,312 | 38,312 | |||
Other comprehensive income (loss) | (7,316) | (7,316) | |||
Share-based compensation | 2,648 | 2,648 | |||
Stock issued for equity awards | 2,323 | $ 2 | 2,321 | ||
Stock issued for equity awards (in shares) | 141 | ||||
Balance at Mar. 31, 2021 | 134,833 | $ 1,127 | 9,525 | 212,612 | (88,431) |
Balance (in shares) at Mar. 31, 2021 | 112,679 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | 76,206 | 76,206 | |||
Other comprehensive income (loss) | 6,897 | 6,897 | |||
Share-based compensation | 2,617 | 2,617 | |||
Stock issued for equity awards | 1,717 | $ 1 | 1,716 | ||
Stock issued for equity awards (in shares) | 101 | ||||
Balance at Jun. 30, 2021 | 222,270 | $ 1,128 | 13,858 | 288,818 | (81,534) |
Balance (in shares) at Jun. 30, 2021 | 112,780 | ||||
Balance at Sep. 30, 2021 | $ 280,741 | $ 1,129 | 17,286 | 356,967 | (94,641) |
Balance (in shares) at Sep. 30, 2021 | 112,913 | 112,913 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | $ 68,838 | 68,838 | |||
Other comprehensive income (loss) | (3,751) | (3,751) | |||
Share-based compensation | 3,958 | 3,958 | |||
Stock issued for equity awards | 7,372 | $ 8 | 7,364 | ||
Stock issued for equity awards (in shares) | 795 | ||||
Employee withholding taxes paid related to net share settlement | (1,137) | $ (1) | (1,136) | ||
Employee withholding taxes paid related to net share settlement (in shares) | (56) | ||||
Repurchases and cancellations of common stock | (75,000) | $ (36) | (27,472) | (47,492) | |
Repurchases and cancellations of common stock (in shares) | (3,675) | ||||
Balance at Dec. 31, 2021 | 281,021 | $ 1,100 | 378,313 | (98,392) | |
Balance (in shares) at Dec. 31, 2021 | 109,977 | ||||
Balance at Sep. 30, 2021 | $ 280,741 | $ 1,129 | 17,286 | 356,967 | (94,641) |
Balance (in shares) at Sep. 30, 2021 | 112,913 | 112,913 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | $ 162,214 | ||||
Other comprehensive income (loss) | (31,729) | ||||
Balance at Jun. 30, 2022 | $ 295,871 | $ 1,070 | 2,339 | 418,832 | (126,370) |
Balance (in shares) at Jun. 30, 2022 | 106,963 | 106,963 | |||
Balance at Dec. 31, 2021 | $ 281,021 | $ 1,100 | 378,313 | (98,392) | |
Balance (in shares) at Dec. 31, 2021 | 109,977 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | 46,808 | 46,808 | |||
Other comprehensive income (loss) | (3,076) | (3,076) | |||
Share-based compensation | 2,032 | 2,032 | |||
Stock issued for equity awards | 424 | $ 1 | 423 | ||
Stock issued for equity awards (in shares) | 111 | ||||
Employee withholding taxes paid related to net share settlement | (15) | (15) | |||
Employee withholding taxes paid related to net share settlement (in shares) | (1) | ||||
Repurchases and cancellations of common stock | (55,328) | $ (32) | (2,440) | (52,856) | |
Repurchases and cancellations of common stock (in shares) | (3,157) | ||||
Balance at Mar. 31, 2022 | 271,866 | $ 1,069 | 372,265 | (101,468) | |
Balance (in shares) at Mar. 31, 2022 | 106,930 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net earnings (loss) | 46,567 | 46,567 | |||
Other comprehensive income (loss) | (24,902) | (24,902) | |||
Share-based compensation | 2,113 | 2,113 | |||
Stock issued for equity awards | 254 | $ 1 | 253 | ||
Stock issued for equity awards (in shares) | 35 | ||||
Employee withholding taxes paid related to net share settlement | (27) | (27) | |||
Employee withholding taxes paid related to net share settlement (in shares) | (2) | ||||
Balance at Jun. 30, 2022 | $ 295,871 | $ 1,070 | $ 2,339 | $ 418,832 | $ (126,370) |
Balance (in shares) at Jun. 30, 2022 | 106,963 | 106,963 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net earnings (loss) | $ 162,214 | $ 171,709 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 73,361 | 78,090 |
Share-based compensation expense | 8,103 | 8,158 |
Amortization of deferred financing costs | 2,702 | 3,280 |
Loss on early extinguishment of debt | 16,439 | 2,449 |
Loss on disposal of equipment and other property | 57 | 1,638 |
Deferred income taxes | 7,702 | (998) |
Changes in (exclusive of effects of acquisitions): | ||
Trade accounts receivable | 243 | (8,612) |
Accounts receivable, other | (3,034) | (10,363) |
Inventory | (160,194) | (108,317) |
Other current assets | (15,577) | (931) |
Other assets | 3,547 | 1,578 |
Operating leases, net | 8,448 | (1,595) |
Accounts payable and accrued liabilities | (34,349) | 78,250 |
Income taxes payable | (8,169) | 6,372 |
Other liabilities | (12,266) | (2,980) |
Net cash provided by operating activities | 49,227 | 217,728 |
Cash Flows from Investing Activities: | ||
Payments for property and equipment, net of proceeds | (67,234) | (44,888) |
Acquisitions, net of cash acquired | (665) | (2,351) |
Net cash used by investing activities | (67,899) | (47,239) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of long-term debt | 283,003 | |
Repayments of long-term debt, including prepayment costs | (433,383) | (418,986) |
Debt issuance costs | (1,300) | |
Payments for common stock repurchased | (130,328) | |
Proceeds from equity awards | 8,050 | 4,039 |
Employee withholding taxes paid related to net share settlement of equity awards | (1,179) | (249) |
Net cash used by financing activities | (273,837) | (416,496) |
Effect of foreign exchange rate changes on cash and cash equivalents | (7,132) | 2,173 |
Net decrease in cash and cash equivalents | (299,641) | (243,834) |
Cash and cash equivalents, beginning of period | 400,959 | 514,151 |
Cash and cash equivalents, end of period | 101,318 | 270,317 |
Supplemental Cash Flow Information: | ||
Interest paid | 75,660 | 86,293 |
Income taxes paid | 73,862 | 53,764 |
Capital expenditures incurred but not paid | $ 7,682 | $ 2,098 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 1. Significant Accounting Policies Business Operations Sally Beauty Holdings is an international specialty retailer and distributor of professional beauty supplies with operations in North America, South America and Europe. We are one of the largest distributors of professional beauty supplies in the U.S. based on store count, operating under two segments, Sally Beauty Supply (“SBS”) and Beauty Systems Group (“BSG”). Our operations consist of company-operated stores, franchise stores and several e-commerce platforms. Within BSG, we also have one of the largest networks of distributor sales consultants (“DSCs”) for professional beauty products in North America, who sell directly to salons and salon professionals. SBS targets retail consumers, salons and salon professionals, while BSG targets salons and salon professionals. Basis of Presentation The condensed consolidated interim financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures included herein are adequate for the interim period presented. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. In the opinion of management, these condensed consolidated interim financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly our consolidated financial position as of June 30, 2022, and September 30, 2021, and our consolidated results of operations, consolidated comprehensive income, consolidated statements of stockholders’ equity for the three and nine months ended June 30, 2022 and 2021, and our consolidated cash flows for the nine months ended June 30, 2022 and 2021. Principles of Consolidation The condensed consolidated interim financial statements include all accounts of Sally Beauty Holdings, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. All amounts are in U.S. Dollars. Accounting Policies We adhere to the same accounting policies in the preparation of our condensed consolidated interim financial statements as we do in the preparation of our full year consolidated financial statements. As permitted under GAAP, interim accounting for certain expenses, including income taxes, is based on full-year assumptions. For interim financial reporting purposes, income taxes are recorded based upon our estimated annual effective income tax. Use of Estimates In order to present our financial statements in conformity with GAAP, we are required to make certain estimates and assumptions that impact our interim financial statements and supplementary disclosures. These estimates may use forecasted financial information based on reasonable information available, however are subject to change in the future. Additionally, unknown future impacts of COVID-19 may impact those estimates and assumptions as well. Significant estimates and assumptions are part of our accounting for sales allowances, deferred revenue, valuation of inventory, amortization and depreciation, intangibles and goodwill, and other reserves. We believe these estimates and assumptions are reasonable; however, they are based on management’s current knowledge of events and actions, and changes in facts and circumstances may result in revised estimates and impact actual results. Impact of COVID-19 Our operating results for the fiscal years 2022 and 2021 were adversely impacted by the COVID-19 pandemic and its effects on the global economy. Given the uncertainty around the continued effects of the COVID-19 pandemic and macro-environment, we cannot reasonably predict the effect they will have on future periods. If once again we become materially and adversely impacted, we may have to consider adjustments to our operations, inventory, liquidity, capital expenditures and accounting estimates and reserves. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jun. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | 2. Revenue Recognition Substantially all of our revenue is derived through the sale of merchandise at the point-of-sale. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data. Changes to our contract liabilities, which are included in accrued liabilities in our condensed consolidated balance sheets, for the periods were as follows (in thousands): Nine Months Ended June 30, 2022 2021 Beginning Balance $ 16,744 $ 13,947 Loyalty points and gift cards issued but not redeemed, net of estimated breakage 5,195 11,950 Revenue recognized from beginning liability (8,132 ) (9,391 ) Ending Balance $ 13,807 $ 16,506 See Note 10, Segment Reporting |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Financial instruments measured on recurring basis Consistent with the three-level hierarchy defined in ASC Topic 820, Fair Value Measurement (in thousands) Classification Fair Value Hierarchy Level June 30, 2022 September 30, 2021 Financial Assets: Foreign exchange contracts Other current assets Level 2 $ 547 $ — Interest rate caps Other assets Level 2 2,029 35 Total assets $ 2,576 $ 35 . Financial Liabilities: Foreign exchange contracts Accrued liabilities Level 2 $ 315 $ — Financial instruments not measured at fair value Carrying amounts and the related estimated fair value of our long-term debt, excluding capital lease obligations and debt issuance costs, are as follows: June 30, 2022 September 30, 2021 (in thousands) Fair Value Hierarchy Level Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding capital leases Senior notes Level 1 $ 679,961 $ 638,313 $ 979,961 $ 1,019,635 Term loan B Level 2 408,875 403,764 413,000 411,451 Total long-term debt $ 1,088,836 $ 1,042,077 $ 1,392,961 $ 1,431,086 The table above excludes amounts, if any, related to our ABL facility as the balance approximates fair value due to the short-term nature of our borrowings. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2022 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 4. Stockholders’ Equity Share Repurchases In August 2017, our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $1.0 billion of its common stock, subject to certain limitations governed by our debt agreements. In July 2021, our Board of Directors approved a term extension of the share repurchase program for the four-year Information related to our shares repurchased and subsequently retired were as follows (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Number of shares repurchased — — 6,832 — Total cost of share repurchased $ — $ — $ 130,328 $ — 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, 2021 $ (92,154 ) $ (2,085 ) $ (402 ) $ (94,641 ) Other comprehensive loss before reclassification, net of tax (34,645 ) 1,073 400 (33,172 ) Reclassification to net earnings, net of tax — 1,255 188 1,443 Balance at June 30, 2022 $ (126,799 ) $ 243 $ 186 $ (126,370 ) 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 | 9 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Weighted-Average Shares | 5. Weighted-Average Shares The following table sets forth the reconciliation of basic and diluted weighted-average shares (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Weighted-average basic shares 106,940 112,739 109,238 112,605 Dilutive securities: Stock option and stock award programs 1,586 2,188 1,669 1,669 Weighted-average diluted shares 108,526 114,927 110,907 114,274 Anti-dilutive options excluded from our computation of diluted shares 2,406 2,188 2,385 1,670 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets During our second fiscal quarter, we completed our annual assessment for impairment of goodwill and indefinite-lived intangible assets. For goodwill, we used a qualitative analysis and our actual and forecasted results are exceeding the estimates from the last quantitative test. Additionally, we considered potential triggering events and determined there were none for the three months ended June 30, 2022. Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2022 2021 2022 2021 Intangible assets amortization expense $ 977 $ 1,648 $ 3,047 $ 4,956 Additionally, during the nine months ended June 30, 2022, the decreases in goodwill and other intangibles were primarily from the effects of foreign currency exchange rates of $8.3 million and $2.2 million, respectively. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Jun. 30, 2022 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 7. Accrued Liabilities Accrued liabilities consist of the following (in thousands): June 30, 2022 September 30, 2021 Compensation and benefits $ 67,664 $ 73,344 Deferred revenue 16,216 18,543 Rental obligations 11,187 10,501 Insurance reserves 6,098 5,934 Interest payable 3,722 24,101 Property and other taxes 2,497 3,853 Operating accruals and other 58,612 69,879 Total accrued liabilities $ 165,996 $ 206,155 |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt | 9 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Short-term Borrowings and Long-term Debt | 8. Short-term Borrowings and Long-term Debt During the three months ended June 30, 2022, we issued a notice of redemption (the “Redemption Notice”), to redeem on May 31, 2022, the entire $300 million aggregate outstanding principal amount of the 8.75% Senior Secured Second Lien Notes due 2025 (“8.75% Senior Notes”). The redemption was made pursuant to the terms of the Indenture dated April 24, 2020, at a redemption price equal to 104.375% of the principal amount of the 8.75% Senior Notes plus accrued but unpaid interest to, but not including, the redemption date. On May 31, 2022, we redeemed these 8.75% Senior Notes with excess cash on hand and $150.0 million in borrowings from our ABL facility. In connection with the redemption, we recognized a loss on the extinguishment of debt of $16.4 million within interest expense, which included a redemption premium of $13.1 million and the write-off of unamortized deferred financing costs of $3.3 million At June 30, 2022, our ABL facility had $167.0 million in outstanding borrowings |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 9. Derivative Instruments and Hedging Activities During the nine months ended June 30, 2022, we did not purchase or hold any derivative instruments for trading or speculative purposes. See Note 3, Fair Value Measurements Designated Cash Flow Hedges Foreign Currency Forwards We regularly enter into foreign currency forwards to mitigate our exposure to exchange rate changes on inventory purchases in U.S. dollars by our foreign subsidiaries. At June 30, 2022, we held forwards, which expire ratably through September 30, 2022, with a notional amount, based upon exchange rates at June 30, 2022, as follows (in thousands): Notional Currency Notional Amount Mexican Peso $ 6,478 Euro 4,084 Canadian Dollar 2,619 Total $ 13,181 Quarterly, the changes in fair value related to the foreign currency forwards are recorded into AOCL. As the forwards are exercised, the realized value is recognized into cost of goods sold, based on inventory turns, in our condensed consolidated statements of earnings. For the nine months ended June 30, 2022 and 2021, we recognized a loss of $0.2 million and a gain of $0.1 million, respectively. The effects of our foreign currency forwards were not material for the three months ended June 30, 2022 and 2021. Based on June 30, 2022, valuations and exchange rates, we expect to reclassify gains of approximately $1.6 million into cost of goods sold over the next 12 months. Interest Rate Caps In July 2017, we purchased two interest rate caps with an initial aggregate notional amount of $550 million (the “interest rate caps”) to mitigate the exposure to higher interest rates in connection with our term loan B. The interest rate caps are comprised of individual caplets that expire ratably through June 30, 2023, and are designated as cash flow hedges. Accordingly, changes in fair value of the interest rate caps are recorded quarterly, net of income tax, and are included in AOCL. For the nine months ended June 30, 2022 and 2021, we recognized expense of $1.3 million and $0.8 million, respectively, into interest expense on our condensed consolidated statements of earnings. The effects of our interest rate caps on our condensed consolidated statements of earnings were not material for the three months ended June 30, 2022 and 2021. Over the next 12 months, we expect to reclassify approximately $0.7 million into interest expense, which represents the original value of the expiring caplets. |
Business Segments
Business Segments | 9 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segments | 10. Segment Reporting Segment data for the three and nine months ended June 30, 2022 and 2021, is as follows (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Net sales: Sally Beauty Supply ("SBS") $ 551,725 $ 602,681 $ 1,639,040 $ 1,693,015 Beauty Systems Group ("BSG") 409,742 419,706 1,214,065 1,191,722 Total $ 961,467 $ 1,022,387 $ 2,853,105 $ 2,884,737 Earnings before provision for income taxes: Segment operating earnings: SBS $ 88,792 $ 116,784 $ 270,355 $ 311,975 BSG 56,067 55,265 160,621 151,680 Segment operating earnings 144,859 172,049 430,976 463,655 Unallocated expenses 45,612 44,124 131,389 155,034 Restructuring 44 508 1,143 1,371 Consolidated operating earnings 99,203 127,417 298,444 307,250 Interest expense 35,977 23,452 76,113 73,313 Earnings before provision for income taxes $ 63,226 $ 103,965 $ 222,331 $ 233,937 Sales between segments, which are eliminated in consolidation, were not material during the three and nine months ended June 30, 2022 and 2021. Disaggregation of net sales by segment The following tables disaggregate our segment revenues by merchandise category. We have reclassified certain prior year amounts to conform to current year presentation. Three Months Ended June 30, Nine Months Ended June 30, SBS 2022 2021 2022 2021 Hair color 38.3 % 36.4 % 37.7 % 36.1 % Hair care 23.5 % 22.1 % 23.8 % 21.6 % Styling tools and supplies 18.8 % 21.3 % 19.4 % 22.4 % Nail 11.3 % 10.9 % 10.8 % 10.8 % Skin and cosmetics 7.6 % 8.5 % 7.6 % 8.4 % Other beauty items 0.5 % 0.8 % 0.7 % 0.7 % Total 100.0 % 100.0 % 100.0 % 100.0 % Three Months Ended June 30, Nine Months Ended June 30, BSG 2022 2021 2022 2021 Hair color 42.3 % 44.3 % 42.4 % 42.4 % Hair care 40.0 % 37.2 % 39.9 % 38.4 % Styling tools and supplies 11.4 % 11.6 % 11.2 % 11.7 % Skin and cosmetics 3.4 % 3.7 % 3.9 % 4.1 % Nail 2.5 % 2.7 % 2.3 % 2.9 % Other beauty items 0.4 % 0.5 % 0.3 % 0.5 % Total 100.0 % 100.0 % 100.0 % 100.0 % The following tables disaggregate our segment revenue by sales channels: Three Months Ended June 30, Nine Months Ended June 30, SBS 2022 2021 2022 2021 Company-operated stores 94.0 % 94.2 % 94.0 % 93.7 % E-commerce 6.0 % 5.7 % 6.0 % 6.2 % Franchise stores 0.0 % 0.1 % 0.0 % 0.1 % Total 100.0 % 100.0 % 100.0 % 100.0 % Three Months Ended June 30, Nine Months Ended June 30, BSG 2022 2021 2022 2021 Company-operated stores 66.6 % 69.2 % 66.9 % 69.7 % Distributor sales consultants 13.9 % 14.1 % 13.9 % 14.0 % E-commerce 11.6 % 8.8 % 11.8 % 8.8 % Franchise stores 7.9 % 7.9 % 7.4 % 7.5 % Total 100.0 % 100.0 % 100.0 % 100.0 % |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Business Operations | Business Operations Sally Beauty Holdings is an international specialty retailer and distributor of professional beauty supplies with operations in North America, South America and Europe. We are one of the largest distributors of professional beauty supplies in the U.S. based on store count, operating under two segments, Sally Beauty Supply (“SBS”) and Beauty Systems Group (“BSG”). Our operations consist of company-operated stores, franchise stores and several e-commerce platforms. Within BSG, we also have one of the largest networks of distributor sales consultants (“DSCs”) for professional beauty products in North America, who sell directly to salons and salon professionals. SBS targets retail consumers, salons and salon professionals, while BSG targets salons and salon professionals. |
Basis of Presentation | Basis of Presentation The condensed consolidated interim financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures included herein are adequate for the interim period presented. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. In the opinion of management, these condensed consolidated interim financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly our consolidated financial position as of June 30, 2022, and September 30, 2021, and our consolidated results of operations, consolidated comprehensive income, consolidated statements of stockholders’ equity for the three and nine months ended June 30, 2022 and 2021, and our consolidated cash flows for the nine months ended June 30, 2022 and 2021. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated interim financial statements include all accounts of Sally Beauty Holdings, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. All amounts are in U.S. Dollars. |
Accounting Policies | Accounting Policies We adhere to the same accounting policies in the preparation of our condensed consolidated interim financial statements as we do in the preparation of our full year consolidated financial statements. As permitted under GAAP, interim accounting for certain expenses, including income taxes, is based on full-year assumptions. For interim financial reporting purposes, income taxes are recorded based upon our estimated annual effective income tax. |
Use of Estimates | Use of Estimates In order to present our financial statements in conformity with GAAP, we are required to make certain estimates and assumptions that impact our interim financial statements and supplementary disclosures. These estimates may use forecasted financial information based on reasonable information available, however are subject to change in the future. Additionally, unknown future impacts of COVID-19 may impact those estimates and assumptions as well. Significant estimates and assumptions are part of our accounting for sales allowances, deferred revenue, valuation of inventory, amortization and depreciation, intangibles and goodwill, and other reserves. We believe these estimates and assumptions are reasonable; however, they are based on management’s current knowledge of events and actions, and changes in facts and circumstances may result in revised estimates and impact actual results. |
Impact of COVID-19 | Impact of COVID-19 Our operating results for the fiscal years 2022 and 2021 were adversely impacted by the COVID-19 pandemic and its effects on the global economy. Given the uncertainty around the continued effects of the COVID-19 pandemic and macro-environment, we cannot reasonably predict the effect they will have on future periods. If once again we become materially and adversely impacted, we may have to consider adjustments to our operations, inventory, liquidity, capital expenditures and accounting estimates and reserves. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Changes to Contract Liabilities | Changes to our contract liabilities, which are included in accrued liabilities in our condensed consolidated balance sheets, for the periods were as follows (in thousands): Nine Months Ended June 30, 2022 2021 Beginning Balance $ 16,744 $ 13,947 Loyalty points and gift cards issued but not redeemed, net of estimated breakage 5,195 11,950 Revenue recognized from beginning liability (8,132 ) (9,391 ) Ending Balance $ 13,807 $ 16,506 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities and other fair value disclosures by fair value hierarchy | Financial instruments measured on recurring basis Consistent with the three-level hierarchy defined in ASC Topic 820, Fair Value Measurement (in thousands) Classification Fair Value Hierarchy Level June 30, 2022 September 30, 2021 Financial Assets: Foreign exchange contracts Other current assets Level 2 $ 547 $ — Interest rate caps Other assets Level 2 2,029 35 Total assets $ 2,576 $ 35 . Financial Liabilities: Foreign exchange contracts Accrued liabilities Level 2 $ 315 $ — Financial instruments not measured at fair value Carrying amounts and the related estimated fair value of our long-term debt, excluding capital lease obligations and debt issuance costs, are as follows: June 30, 2022 September 30, 2021 (in thousands) Fair Value Hierarchy Level Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding capital leases Senior notes Level 1 $ 679,961 $ 638,313 $ 979,961 $ 1,019,635 Term loan B Level 2 408,875 403,764 413,000 411,451 Total long-term debt $ 1,088,836 $ 1,042,077 $ 1,392,961 $ 1,431,086 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Stockholders Equity Note [Abstract] | |
Schedule of Shares Repurchased and Subsequently Retired | Information related to our shares repurchased and subsequently retired were as follows (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Number of shares repurchased — — 6,832 — Total cost of share repurchased $ — $ — $ 130,328 $ — |
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, 2021 $ (92,154 ) $ (2,085 ) $ (402 ) $ (94,641 ) Other comprehensive loss before reclassification, net of tax (34,645 ) 1,073 400 (33,172 ) Reclassification to net earnings, net of tax — 1,255 188 1,443 Balance at June 30, 2022 $ (126,799 ) $ 243 $ 186 $ (126,370 ) |
Weighted-Average Shares (Tables
Weighted-Average Shares (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic and diluted weighted-average shares | The following table sets forth the reconciliation of basic and diluted weighted-average shares (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Weighted-average basic shares 106,940 112,739 109,238 112,605 Dilutive securities: Stock option and stock award programs 1,586 2,188 1,669 1,669 Weighted-average diluted shares 108,526 114,927 110,907 114,274 Anti-dilutive options excluded from our computation of diluted shares 2,406 2,188 2,385 1,670 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets Amortization Expense | Three Months Ended June 30, Nine Months Ended June 30, (in thousands) 2022 2021 2022 2021 Intangible assets amortization expense $ 977 $ 1,648 $ 3,047 $ 4,956 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Payables And Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): June 30, 2022 September 30, 2021 Compensation and benefits $ 67,664 $ 73,344 Deferred revenue 16,216 18,543 Rental obligations 11,187 10,501 Insurance reserves 6,098 5,934 Interest payable 3,722 24,101 Property and other taxes 2,497 3,853 Operating accruals and other 58,612 69,879 Total accrued liabilities $ 165,996 $ 206,155 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Foreign Currency Forwards | |
Schedule of notional amount held through foreign currency forwards, based upon exchange rates | At June 30, 2022, we held forwards, which expire ratably through September 30, 2022, with a notional amount, based upon exchange rates at June 30, 2022, as follows (in thousands): Notional Currency Notional Amount Mexican Peso $ 6,478 Euro 4,084 Canadian Dollar 2,619 Total $ 13,181 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment data | Segment data for the three and nine months ended June 30, 2022 and 2021, is as follows (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2022 2021 2022 2021 Net sales: Sally Beauty Supply ("SBS") $ 551,725 $ 602,681 $ 1,639,040 $ 1,693,015 Beauty Systems Group ("BSG") 409,742 419,706 1,214,065 1,191,722 Total $ 961,467 $ 1,022,387 $ 2,853,105 $ 2,884,737 Earnings before provision for income taxes: Segment operating earnings: SBS $ 88,792 $ 116,784 $ 270,355 $ 311,975 BSG 56,067 55,265 160,621 151,680 Segment operating earnings 144,859 172,049 430,976 463,655 Unallocated expenses 45,612 44,124 131,389 155,034 Restructuring 44 508 1,143 1,371 Consolidated operating earnings 99,203 127,417 298,444 307,250 Interest expense 35,977 23,452 76,113 73,313 Earnings before provision for income taxes $ 63,226 $ 103,965 $ 222,331 $ 233,937 |
Schedule of disaggregation of net sales by segment | Disaggregation of net sales by segment The following tables disaggregate our segment revenues by merchandise category. We have reclassified certain prior year amounts to conform to current year presentation. Three Months Ended June 30, Nine Months Ended June 30, SBS 2022 2021 2022 2021 Hair color 38.3 % 36.4 % 37.7 % 36.1 % Hair care 23.5 % 22.1 % 23.8 % 21.6 % Styling tools and supplies 18.8 % 21.3 % 19.4 % 22.4 % Nail 11.3 % 10.9 % 10.8 % 10.8 % Skin and cosmetics 7.6 % 8.5 % 7.6 % 8.4 % Other beauty items 0.5 % 0.8 % 0.7 % 0.7 % Total 100.0 % 100.0 % 100.0 % 100.0 % Three Months Ended June 30, Nine Months Ended June 30, BSG 2022 2021 2022 2021 Hair color 42.3 % 44.3 % 42.4 % 42.4 % Hair care 40.0 % 37.2 % 39.9 % 38.4 % Styling tools and supplies 11.4 % 11.6 % 11.2 % 11.7 % Skin and cosmetics 3.4 % 3.7 % 3.9 % 4.1 % Nail 2.5 % 2.7 % 2.3 % 2.9 % Other beauty items 0.4 % 0.5 % 0.3 % 0.5 % Total 100.0 % 100.0 % 100.0 % 100.0 % The following tables disaggregate our segment revenue by sales channels: Three Months Ended June 30, Nine Months Ended June 30, SBS 2022 2021 2022 2021 Company-operated stores 94.0 % 94.2 % 94.0 % 93.7 % E-commerce 6.0 % 5.7 % 6.0 % 6.2 % Franchise stores 0.0 % 0.1 % 0.0 % 0.1 % Total 100.0 % 100.0 % 100.0 % 100.0 % Three Months Ended June 30, Nine Months Ended June 30, BSG 2022 2021 2022 2021 Company-operated stores 66.6 % 69.2 % 66.9 % 69.7 % Distributor sales consultants 13.9 % 14.1 % 13.9 % 14.0 % E-commerce 11.6 % 8.8 % 11.8 % 8.8 % Franchise stores 7.9 % 7.9 % 7.4 % 7.5 % Total 100.0 % 100.0 % 100.0 % 100.0 % |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Details) | 9 Months Ended |
Jun. 30, 2022 segment | |
Accounting Policies [Abstract] | |
Number of segments | 2 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Changes to Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Contract With Customer Liability [Abstract] | ||
Beginning Balance | $ 16,744 | $ 13,947 |
Loyalty points and gift cards issued but not redeemed, net of estimated breakage | 5,195 | 11,950 |
Revenue recognized from beginning liability | (8,132) | (9,391) |
Ending Balance | $ 13,807 | $ 16,506 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Long-term debt, excluding capital leases | ||
Long-term debt, excluding capital leases, Carrying Value | $ 1,088,836 | $ 1,392,961 |
Long-term debt, excluding capital leases, Fair Value | 1,042,077 | 1,431,086 |
Level 2 | Term loan B | ||
Long-term debt, excluding capital leases | ||
Long-term debt, excluding capital leases, Carrying Value | 408,875 | 413,000 |
Long-term debt, excluding capital leases, Fair Value | 403,764 | 411,451 |
Level 1 | Senior notes | ||
Long-term debt, excluding capital leases | ||
Long-term debt, excluding capital leases, Carrying Value | 679,961 | 979,961 |
Long-term debt, excluding capital leases, Fair Value | 638,313 | 1,019,635 |
Fair Value, Recurring | ||
Financial Assets: | ||
Total assets | 2,576 | 35 |
Fair Value, Recurring | Level 2 | Other current assets | ||
Financial Assets: | ||
Foreign exchange contracts | 547 | |
Fair Value, Recurring | Level 2 | Other assets | ||
Financial Assets: | ||
Interest rate caps | 2,029 | $ 35 |
Fair Value, Recurring | Level 2 | Accrued Liabilities | ||
Financial Liabilities: | ||
Foreign exchange contracts | $ 315 |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Program (Details) - 2017 Share Repurchase program - USD ($) | 1 Months Ended | ||
Jul. 31, 2021 | Jun. 30, 2022 | Aug. 31, 2017 | |
Share Repurchase Program | |||
Amount of shares authorized to be repurchased | $ 595,800,000 | $ 1,000,000,000 | |
Term of share repurchase program, extended | 4 years | ||
Stock repurchase program, expiration date | Sep. 30, 2025 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Shares Repurchased and Subsequently Retired (Details) shares in Thousands, $ in Thousands | 9 Months Ended |
Jun. 30, 2022 USD ($) shares | |
Stockholders Equity Note [Abstract] | |
Number of shares repurchased | shares | 6,832 |
Total cost of share repurchased | $ | $ 130,328 |
Stockholders' Equity - Change i
Stockholders' Equity - Change in AOCL (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | $ 280,741 |
Balance | 295,871 |
Interest rate caps | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (2,085) |
Other comprehensive loss before reclassification, net of tax | 1,073 |
Reclassification to net earnings, net of tax | 1,255 |
Balance | 243 |
Foreign exchange contracts | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (402) |
Other comprehensive loss before reclassification, net of tax | 400 |
Reclassification to net earnings, net of tax | 188 |
Balance | 186 |
Foreign currency translation adjustments | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (92,154) |
Other comprehensive loss before reclassification, net of tax | (34,645) |
Balance | (126,799) |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance | (94,641) |
Other comprehensive loss before reclassification, net of tax | (33,172) |
Reclassification to net earnings, net of tax | 1,443 |
Balance | $ (126,370) |
Weighted-Average Shares (Detail
Weighted-Average Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share Reconciliation: | ||||
Weighted-average basic shares | 106,940 | 112,739 | 109,238 | 112,605 |
Dilutive securities: | ||||
Stock option and stock award programs | 1,586 | 2,188 | 1,669 | 1,669 |
Weighted-average diluted shares | 108,526 | 114,927 | 110,907 | 114,274 |
Anti-dilutive options excluded from our computation of diluted shares | 2,406 | 2,188 | 2,385 | 1,670 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Impairment losses in connection with the goodwill | $ 0 | $ 0 |
Impairment losses in connection with the intangible assets | 0 | $ 0 |
Goodwill, decreased from effects of foreign currency exchange rates | $ 8,300,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Intangible assets amortization expense | $ 977 | $ 1,648 | $ 3,047 | $ 4,956 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Accrued Liabilities | ||
Compensation and benefits | $ 67,664 | $ 73,344 |
Deferred revenue | 16,216 | 18,543 |
Rental obligations | 11,187 | 10,501 |
Insurance reserves | 6,098 | 5,934 |
Interest payable | 3,722 | 24,101 |
Property and other taxes | 2,497 | 3,853 |
Operating accruals and other | 58,612 | 69,879 |
Total accrued liabilities | $ 165,996 | $ 206,155 |
Short-term Borrowings and Lon_2
Short-term Borrowings and Long-term Debt - Additional Information (Details) - USD ($) | 9 Months Ended | ||
May 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | |||
Loss on the extinguishment of debt | $ (16,439,000) | $ (2,449,000) | |
ABL facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowing | 167,000,000 | ||
Revolving credit facility | $ 314,200,000 | ||
Senior Secured Second Lien Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate | 8.75% | ||
Redemption premium | $ 13,100,000 | ||
Write-off of unamortized deferred financing costs | 3,300,000 | ||
Senior Secured Second Lien Notes Due 2025 | Interest Expense | |||
Debt Instrument [Line Items] | |||
Loss on the extinguishment of debt | (16,400,000) | ||
Senior Secured Second Lien Notes Due 2025 | ABL facility | |||
Debt Instrument [Line Items] | |||
Borrowings | 150,000,000 | ||
Senior Secured Second Lien Notes Due 2025 | Sally Holdings LLC and Sally Capital Inc. | |||
Debt Instrument [Line Items] | |||
Principal outstanding amount | $ 300,000,000 | ||
Interest rate | 8.75% | ||
Percentage of redemption price equal to principal amount | 104.375% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - (Details) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 USD ($) instrument | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) instrument | Jun. 30, 2021 USD ($) | Jul. 31, 2017 USD ($) derivative | |
Derivative Instruments | |||||
Number of derivative instruments held | instrument | 0 | 0 | |||
Interest expense | $ 35,977,000 | $ 23,452,000 | $ 76,113,000 | $ 73,313,000 | |
Foreign Currency Forwards | |||||
Derivative Instruments | |||||
Derivative instruments, expiration date | Sep. 30, 2022 | ||||
Notional Amount | 13,181,000 | $ 13,181,000 | |||
Foreign Currency Forwards | Reclassification out of Accumulated Other Comprehensive Income | |||||
Derivative Instruments | |||||
Foreign currency forwards designated as cash flow hedges to be reclassified gain (loss) | (200,000) | 100,000 | |||
Foreign currency forwards designated as cash flow hedges to be reclassified losses into cost of goods sold over next 12 months | 1,600,000 | $ 1,600,000 | |||
Interest rate caps | Variable-rate tranche | Sally Holdings, LLC | |||||
Derivative Instruments | |||||
Derivative instruments, expiration date | Jun. 30, 2023 | ||||
Notional Amount | $ 550,000,000 | ||||
Number of interest rate caps | derivative | 2 | ||||
Interest expense | $ 1,300,000 | $ 800,000 | |||
Interest rate caps | Term loan B variable tranche | Sally Holdings, LLC | |||||
Derivative Instruments | |||||
Interest rate caps designated as cash flow hedges to be reclassified into interest expense over next 12 months | $ 700,000 | $ 700,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of Notional Amount Held Through Foreign Currency Forwards, Based Upon Exchange Rates (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Foreign Currency Forwards | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | $ 13,181 |
Mexican Peso | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 6,478 |
Euro | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | 4,084 |
Canadian Dollar | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Notional Amount | $ 2,619 |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Net sales: | ||||
Total net sales | $ 961,467 | $ 1,022,387 | $ 2,853,105 | $ 2,884,737 |
Segment operating earnings: | ||||
Segment operating earnings | 99,203 | 127,417 | 298,444 | 307,250 |
Restructuring | 44 | 508 | 1,143 | 1,371 |
Interest expense | 35,977 | 23,452 | 76,113 | 73,313 |
Earnings before provision for income taxes | 63,226 | 103,965 | 222,331 | 233,937 |
Operating segments | ||||
Segment operating earnings: | ||||
Segment operating earnings | 144,859 | 172,049 | 430,976 | 463,655 |
Corporate | ||||
Segment operating earnings: | ||||
Unallocated expenses | 45,612 | 44,124 | 131,389 | 155,034 |
Sally Beauty Supply | ||||
Net sales: | ||||
Total net sales | 551,725 | 602,681 | 1,639,040 | 1,693,015 |
Sally Beauty Supply | Operating segments | ||||
Segment operating earnings: | ||||
Segment operating earnings | 88,792 | 116,784 | 270,355 | 311,975 |
Beauty Systems Group | ||||
Net sales: | ||||
Total net sales | 409,742 | 419,706 | 1,214,065 | 1,191,722 |
Beauty Systems Group | Operating segments | ||||
Segment operating earnings: | ||||
Segment operating earnings | $ 56,067 | $ 55,265 | $ 160,621 | $ 151,680 |
Business Segments - Schedule of
Business Segments - Schedule of Disaggregation of Net Sales by Segment (Details) - Sales Revenue, Net - Product Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Sally Beauty Supply | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 100% | 100% | 100% | 100% |
Sally Beauty Supply | Hair color | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 38.30% | 36.40% | 37.70% | 36.10% |
Sally Beauty Supply | Hair care | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 23.50% | 22.10% | 23.80% | 21.60% |
Sally Beauty Supply | Styling tools and supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 18.80% | 21.30% | 19.40% | 22.40% |
Sally Beauty Supply | Nail | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 11.30% | 10.90% | 10.80% | 10.80% |
Sally Beauty Supply | Skin and cosmetics | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 7.60% | 8.50% | 7.60% | 8.40% |
Sally Beauty Supply | Other Beauty items | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 0.50% | 0.80% | 0.70% | 0.70% |
Sally Beauty Supply | Sales channel, directly to consumer | Company-operated stores | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 94% | 94.20% | 94% | 93.70% |
Sally Beauty Supply | Sales channel, through intermediary | E-commerce | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 6% | 5.70% | 6% | 6.20% |
Sally Beauty Supply | Sales channel, through intermediary | Franchise stores | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 0% | 0.10% | 0% | 0.10% |
Beauty Systems Group | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 100% | 100% | 100% | 100% |
Beauty Systems Group | Hair color | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 42.30% | 44.30% | 42.40% | 42.40% |
Beauty Systems Group | Hair care | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 40% | 37.20% | 39.90% | 38.40% |
Beauty Systems Group | Styling tools and supplies | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 11.40% | 11.60% | 11.20% | 11.70% |
Beauty Systems Group | Nail | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 2.50% | 2.70% | 2.30% | 2.90% |
Beauty Systems Group | Skin and cosmetics | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 3.40% | 3.70% | 3.90% | 4.10% |
Beauty Systems Group | Other Beauty items | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 0.40% | 0.50% | 0.30% | 0.50% |
Beauty Systems Group | Sales channel, directly to consumer | Company-operated stores | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 66.60% | 69.20% | 66.90% | 69.70% |
Beauty Systems Group | Sales channel, through intermediary | Distributor sales consultants | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 13.90% | 14.10% | 13.90% | 14% |
Beauty Systems Group | Sales channel, through intermediary | E-commerce | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 11.60% | 8.80% | 11.80% | 8.80% |
Beauty Systems Group | Sales channel, through intermediary | Franchise stores | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of net sales | 7.90% | 7.90% | 7.40% | 7.50% |