SBH - Earnings call transcript Q2 2022 | Sally Beauty Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Sally Beauty Holdings conference call to discuss the company's fiscal 2022 third quarter results. All participants have been placed in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session.

Additional instructions will be given at that time.

Now I would like to turn the call over to Jeff Harkins, Vice President of Investor Relations and Treasurer for Sally Beauty Holdings.

Jeff Harkins

you. Thank and joining everyone today. you thank morning us for Good Paulonis, call Chief Chief With the Denise Financial President Cormier, me on Marlo are and and Executive Officer. Officer,

today made Reform remind remarks these we the remind can that like those at from on company release factors Form forward-looking that most Before annual views and of measures forward-looking management's as sallybeautyholdings.com. want represent that provided its Litigation viewed of result statements Private available adjusting today of to link investor the I and we meaning today's begin, including be items important indicated and have of its to to as non-GAAP our call results no XX-K statements various call factors, a obligations the of website. risk contain made a the reconciliations you on Actual on call report recent may its I section SEC. within and press from Securities earnings presentation for may on those provided our filings the only forward-looking also explanation other everyone site Act and with in this has XXXX. Any materially a this differ them. of undertake statements The in by and financial would our discussed we update detailed

to call to remarks. the I'd the over Denise like turn to Now begin formal

Denise Paulonis

Thank you and Jeff, everyone. good morning

Sally BSG Net at representing on on the stores, of as third a our XXX in they fiscal execute and $XXX comparable remained at declined focused stylists. core and our decline quarter sales delighting to plan came while million X% performance, X.X%. teams our fewer sales engaging Looking customers

challenging top we results impact QX supply pressures inflationary the on and line a discussed environment, call. chain of disruptions reflect notably macro most our the continued Our earnings

delivered a drove the healthy year, a we restrictions of XX%. Against this XX.X%. adjusted of margin comparison backdrop, easing to COVID net of as difficult margin sales last operating well maintained and when increase As gross

sheet further down Importantly, positioned In debt, million quarters we the quarter growth, $X during years paid business leaving and shareholders we've billion senior value for to full repayment the our the coming strengthened in to adjust, over our with $XXX secured time, notes. approximately balance term. long in the under of X and the invest return well

purchasing strength Sally to core trends their while In of operational like a further tools up two impact At improvement US not been base spend conscious on As and leveraging we navigate to overall is challenges a are in want beginning Canada, on and categories leaning remained focused in our quarter, behavior that's there of customer higher quarters quarter The than chain modestly and time is remained macro Sally progress their our lowering but during and Sally and sequentially they customer year we've current period. continue inflationary this under into the between as and our US core and the the line remains consistent frequently in-stock. and electricals levels. coloring Basket expect styling we third upcoming that investments sacrifice times lunch categories supply combination in relatively that versus bottom does loyalty complexities, these reflecting coloring to priced and portion lead remained years. and were and quality in-stock our Enhanced our pressure, transactions and color recent in the of care core businesses, we're BSG. lower our our color stretch customer making Canada, last the care. last mainly adds largest in cost show

believe the proven engagement to to factor We positive receive and our challenging truly and us consistently and we navigate stores provide education, Sally key our level environment. in on a sets economic it's Importantly, of be knowledge. friendliness, ability feedback apart service,

category Turning and bonding covering now the to well. express to continue our BSG trend segment. a quarter. remained stable Overall perspective, demand in From

some raw As and impact third SKUs. our vendors of some anticipated, levels quarter material of we shortages persisted the our for stock to during top-performing of continue

We ground are expect get on fiscal further-- stock to in starting regain and to back certain regain to in products and expect XXXX. further

We all Regis and end our partnership. be new fiscal salons year June expect servicing in on fully ramped over under expanded XXXX also XXX distribution to began by up

other Forklift. will we a which chain addition, recently portal as leveraging accounts launched for large such web In be the ordering process, dedicated streamline to

need. fiscal Balancing As rates personalization, Sally our we these FX stylists At operating work time our positive the months Sally purchasing and of stretch and of full reducing our and to customers some our both adds. and negative purchase to customers continuing the sales colorings through are to our among year supply the behavior around while between final BSG still and basket At in persisting. their beginning salons have on margin. marketing, moderating continuing is of are trends, to innovation, stylist busy, approach we challenges, BSG, XXXX, shift the the momentum we're closer we impact for and from are sales initiatives outlook chain

outlook established our provider macro seen competitive as and as Underpinning These a core driving our supply chain. platform, today. we've we're in our promoter we model four execute of color discuss in pillars leveraging and While care scores, innovation, years. continued the growth the our difficult strong leading our professional advancing and in I'll that infrastructure include delivering have operating continuing customer, environment, product our loyalty positioning in net to personalization, our and our digital pillars is color our the recent care, confidence are of loyalty depth and and strategic of the team against operating who

digital. with start Let's

was us and in X.X% omnichannel penetration quarter. going serving continue sales the Our digital sales into and of E-commerce well model is third in lean we'll to invest forward.

At with fulfilled in delivery sales, XX%, both e-commerce comprising and During X%. and representing BOPUIS the Notably, a strong Canada uptake Sally Sally, control BSG are two-hour to of saw feedback accounting expert XX% Sally virtual receive versus ship-from-store scores on we XX%, two-hour points virtual [indiscernible] delivery our response of and our positive stores the customer for higher stores new color segment. continue seven in color and quarter expert. our stores. we US our

being of focus on our of customers. relentless delivering expansion stores. and customer app include with to our Additionally, virtual will early are XX and control great expert the our in competitive our another and importance in is stores This investments higher experience, that locations, XX XXXX piloted color engagement versus for coming is about website virtual that planned strengthen with average XX% an now example more This experience online XXXX, fiscal positioning. to education, our drive leverage is ability a our digital ticket,

sales loyalty came In of loyalty to the at count approximately XX remained our active and second personalization. Canada pillar, quarter, Moving our Sally from our million. steady and third XX% at US growth program, and member

and progressing that side, for tool At of implementation tool by last marketing and and launched third efficiency mix early to the BFG data customers launch this We're sales five is that expect year. opportunity came on utilizing BSG our to at personalization we personalization and quarter. BSG of the our journey end card decision email of have quarter, the about rewards and the end analyzing we the XXX% from third will sharpen we're Sally we new talked the about increase we optimize quarter X% in the credit of the have of future modeling web On for data in excited gathering help the different first journey us well. The by and of our innings spend. making ultimately the for

third growth innovation. pillar, our product to now Turning

at be Leopard hair for a over lashes, the great robust brand and pad us about line. Strawberry particularly the Leopard skincare, including Sally the brand to segment. drive to [indiscernible] we have long Strawberry ahead response have innovation QX, to Sally launching strategy enthusiastic new successful and penetration continue We're our the across hair is care, term. We strong to our we In pleased within and those by BSG pipeline care of owned launches

Results the Vivid Matrix. and QX, SoColor we from Total line care recently launched For Cult hair line Color

we nails and planned the QX, in new styling category. launches in tool Additionally, product have

product of care, Wella's their momentum BSG positive a to saw On products we clarifying continued care, Xth response innovation XC new In color Olaplex, Infinity color, in and with QX across from and and line. side, launches our [indiscernible] shampoo. the launching the Olaplex including more have No.X both including new we tools, quarter

Our initiatives in prominent product nail This BSG. new well includes store Sally and new both and underway placement, launches. category more are fixturing, in at the

as quarter positive are completed rollouts The the first product excitement in Xth phase for to results the focus the QX, to of bring are was expansion additional on continuing planned and early we category.

our and fourth categories of recognize some pillar, supply QX final the impacting and chain. in-stocked importance the despite exited disruptions and supply top of lingering in position We core onto We care time. better vendors. Now our chain every a color being

the our expected closing, improved work transforming to cost as to work to our market, demonstrated our and are I serving higher of In increase have continuing a our to commitment hard network of who resiliency environment. team offset remarkable which distribution, teams transportation to the to to Our pool and recognize want partial is serve reliability, speed dedication and customers.

fiscal over building we long-term and as for value can of forward including this transition the environment, shareholders expense includes planning uncertain in we As stakeholders in control, this into on cost we staying move all remain aggressive macro and utilizing steadfast we what focused controls XXXX. our

to Now to I to before Marlo opening call the financials call will discuss the turn over the questions.

Marlo Cormier

And and declined to quarter X% Denise. million, comparable net good morning you, decreased X.X%. third sales Thank sales everyone. $XXX

continued and the As both inflationary BSG including divisions. macro to we factors chain supply disruptions, pressures impact Sally and anticipated,

operating compared $XX Global translation capabilities and sales ability utilize an representing e-commerce engagement. tools prior points million currency unfavorable of increased to foreign drive basis our XX% XXX at X.X% on net The scale year-over-year net stores of our of consolidated sales. digital had the reflects the our were quarter. we to customer fewer year, quarter the sales to XXX new to for and end resources and impact increase total Additionally, the

at profit. gross Looking

distribution gross margin segments. BSG expanded in quarter the benefits to partially higher freight Third margin points by offset costs. leverage improvement basis and drove XX% both Sally as These by were and XX pricing

$XXX well totaled last SG&A expenses, Moving costs. year-over-year as essentially and accrued adjusted were Higher bonus expenses, million, lower by offset lower to mostly variable flat costs year. labor operating advertising to as

which continuing optimize store base, serve are move we XXXX. into we wage Additionally, to to partially offset our will as fiscal inflation

Amidst and top delivered Turning line, good tough a we macro is margin control. environment our gross maintained consistent to that earnings. healthy pressuring now profile our cost

million adjusted income million, came was at operating in EPS $XXX EBITDA totaled $X.XX. diluted adjusted quarter Third adjusted $XXX and

inflationary pressures last income reflecting impacted Looking reopening at segment the and primarily our customer net demand. lapping sales lower that year's of Sally results. Beauty strong X.X%, declined Sally

In XXX in and comp addition, pressured which XX% was foreign sales a was and by sales, currency fewer Canada for remain of global At on Performance environment the year on macro of color quarter, versus color in quite segment, sales the was net stores translation we segment Comparable sales last and Europe a comp concentrated Canada, X%. the of down positive basis US basis. accounted care was Sally America slightly had in points X% X% impact similar a QX. were X.X% while down and strong. Latin was store The Sally down ago. operated while negative unfavorable to US had an XXX decline and net

Additionally color in category of category Vivid sales. color with performed overall a line the XX% made and the

increase and actions While average pricing our US the ticket. Sally at per in which retail resulted average and total down nicely, increased units in were unit slight transaction a reflecting transactions Canada,

year. and normal to raw or in $XX by back raw hair the the XXX shortages our margin of but lapping the driven led X.X%, driven material fiscal we was before margin about higher impact got and was not basis to QX approximately and as quarter to while partially compared basis distribution in X% prior-- customer the XX.X%, Denise further consistent as adds. and XX.X% expect to prior on As remained in growth. prior by for shortages, offset on primarily in the April talked basket generate care we solid compared driven the at but expanded in points points June, improvement product X% Gross are inventory, by rely continue net at pricing resource to primarily year minimizing by of stretching XX Gross margins to leverage, Sally well some color category demand demand. on by us points until down to they loss material of estimate million more XXXX. pricing XX.X%. continues as Sally has leverage, their improved improving reflecting declined came fully lapping in comparable sales BSG product raw The chain as that while reopening last among and margin compared sales operating shortages partially strong result Segment We and were May time. care XX.X%. segment SKUs, strengthened worse margins freight increased in vendors year's sales declined to the-- The just X.X%, material higher which key disruptions at mainly to freight BSG color from levels as buying impact of at a distribution sales the basis costs, came the segment In Salon lower net but stock operating stylists margin by supply conservative the costs. of of XXX primarily top-performing offset visits

became X.X% the strong made cash Moving flow. strategic of structure. we cash and the ended partnership, the the funded through We can in optimize traced $XXX disruption. credit. support chain our at to leverage with line May of callable, pull the million and times. balance $X senior inventories third At of key billion. is factors, lastly of sheet in to outstanding and price further asset-based and with end better due quarter-end the strengthen of combination line up financial and quarter increase and forward sheet $XXX supply ABL in the primarily three ratio a retire million under notes to be facility. equivalents, the over the of capital was Regis $XXX when the At balance our of our revolving and million closure were expectations condition cash stood year-over-year in our just inventory our quarter our repayment net At cash our The ramping to inventory increases, third to of excess The expanded debt X.X outstanding XXXX of decision face

flow cash $XX from in quarter the capital $XX was totaled Third million. quarter expenditures operations million and

to guidance. on Moving

foreign weeks updating customer we intensifying We our as following, well outlook full Denise as reflect currency year discussed, X for dynamics year With in now XXXX are to fiscal the remaining fiscal the headwinds. our year, approximately expect to year. rates an in full-year the expected from This on by approximately to incremental reflects foreign decline basis impact are X% net sales compared sales impact third guidance XX margin margin and net to points US exchange approximately approximately fourth the our the includes the approximately primarily prior of this unfavorable driven currency gross gross we margin quarter selling XX.X%, We by approximately time basis adjusted in quarter and appreciate the expansion as of expansion operating to GAAP approximately store your be morning. anticipated operating of be basis and to XX points, points, compared to margin adjusted GAAP count XX portfolio. guidance. optimize Net by stores stores growth decrease continue to XX prior approximately impact XX.X%.

the to Q&A. ask call the Now, for operator open I'll

Operator

[Operator you. Thank Instructions].

will is come open. from Parikh and of line question the first Rupesh Our line your

Rupesh Parikh

morning, my Good taking for thanks question.

to just I wanted BSG. So to back go

you side the seeing guys trends. salon industry, salon and about on know slowdown salon if business, right some at I just July there's So been on you're the chatter any in a what perspective industry now look

Denise Paulonis

Hi, Rupesh, Denise. it's Yeah.

me comment Let on there. me, let

some need, BSG in what about with that talk are a trends the more cautious. general, stylist talking they're when our the our appreciation a this on we've a customer actually a is in actually that their about strong how their customer side, chairs did we bit still them style They're they events. they're little they are closer really busy a buying seeing seeing a In history. was are we to stretching talk the little bit little our about and talking making people what Right? seeing we the business. sitting we're and to how behavior talk salons BSG when little then about is when things past The will the but in quarter bit purchase it we're bit we'll are First our their with and dollar bit is response the little choices one making. frugal more us, done And come strongest of

see our definitely there in business. the care out is pricing which actually the sensitivity segment operating. in healthy the to we're you The for stylist core good So us in quite though with the business and color news remained in we

and stock positive. of ran while in was Our up the absolute adjust stylist about out that if vendor down X%, care slightly about business issues X%, our we color for was with

we in share, feel as thinking can really we categories about we're core about our darn help stylist. We're that that. which we're the things pretty you also our competing, the focused in growing do better So good to know

products, on quarter, key months third quarter persist although probably bit pressure end of progress items the two more Express in integration those let's turn good accounts we we our do first of And vendors them to saw XXX importantly, faster our We month a focused will to business continue have at already XXXX. the [indiscernible] to QX, and very go. third coming share and we're get will in come saw XXXX into get on May, through have So of out stock. that The Regis business with online, of more most of expect then then the little in more quarter, on many where back of that that with but the all stocks of working them. the in

there's of stability business, good pressure there, the of underlying the feel while view overall, about. So quite out we some

Rupesh Parikh

chain supply $XX the you given quarter. challenges, just question, follow-up one just headwind this maybe I million then And quantified great. think Okay,

going customer, just to do curious recover as we the you sales? think actually to expect as you recover as somewhere are if these next year these customers to you else, back, actually able you So presumably be product to get the get supply look

Denise Paulonis

our short brands have seen customers in very but how customer something, to our need they those when will in to really exclusive service and able to and forward. they anxious They and We've us very into believe are fill be know in, sticky. to talk it's are core coming go we're they is their generally our they need back what we'll might our that brands mostly in stock somewhere when else is what they store, to come it's some assortment if

of for and certain we in who those come to our customers, So in buy quick what has have advisors our up stock. SKUs lists are as waiting available. what's are an in people When example, beauty stores back they come to in come to call

short So loyal stylists but they of to can't quite to our the future, the just every predict term come some while and to love, come brands I some they're in making remain reason the I've start for that to back. and patience trade-offs they've that waiting exhibiting are believe some

Rupesh Parikh

Great, thank you.

Operator

you. Thank

Our of is next come will open. your Wissink question with from line Jefferies. Steph line the And

Steph Wissink

to they the these you stepping on in that supply have gap? vendors give question some your overall and vendors us anything, providing position maybe any Good a are morning, just areas? question you what inventory sense on supply feedback I up from help of bridge follow-up a alternative Rupesh's are gotten can everyone. And Have just you. around ensure chain. taking to to of Thank how your to with support you, improve steps that are they

Denise Paulonis

so with really those where my would last the that weeks, that is, trying see vendors, the much build think get about way we all I'm chain them amount most have is supply is demand, need it What see our see them we to on lot it going work to what accurate numbers. can the months, of And do see that have backlogs, more planning I shortfalls, quarters. raw what to back over they say, to of going coming be quarters Hi, to with as and we a give been where over is Steph, where doing able to going we specific hard up customer them two we've we to it's and with materials, demand give able and to their I'm then the them Denise.

I our that is think little focused was through getting the responsible on the to clarity and that. part so demand demand we on part had vendor into of the be we're signal that equal pent-up sure concern and a

as the customers our want as of these sales much product. want All vendors our

getting be I work our So and starting at we're hard, back material they as it's did a we're pushing things or are we're quarter the expecting that to clearly going quarter, receipts to end seeing to a the or lid, talk we're things third of whether the in. trying those raw bottle, ingredient better, to fourth are come see continue We results. think those itself, about as through, through

I to So to wrap smaller. expected is the around to think going XXXX, be going hang as and piece is

product I wanting plate, they So them customers much with they're we've are as the think are the doing information certainly we the want got, share and stepping all to to that up business our best our as

Steph Wissink

the All follow-up how right a passed along, with then Can consumer be? share pace bit your some professional what side your mentioned how core come have come could pricing. in little and on that's you about there on on much consumption. you slowing question helpful. prepared seen remarks, think any side, both through, I you more of resistance price in or And on to is you've And the sense much some us my just

about price in having the elasticity understand a through. price thinking of Just how pass you're you. little amount Thank want you're bit to to

Denise Paulonis

and years elasticities has really if pricing two year as gotten price tools our about focused that And pass capabilities, the progressed, were certainly I'll in early taken strategic Marlo as transformation and there. about are we our some we add new have that took so. and then ahead had investments of do vendor we Sure the technologies can being leveraging When jump come in through pricing, went year very to done wants lot pricing she pricing, talked through this forms. about increases. think and in response we've a in to the the past one any well pricing on color those of period And what pricing new and we smarter some there

we're seen elasticity would within do the we that the elasticity is what generally being color, we When seeing amount them buy spend I'm about, a have. balance as the just money they're going shampoo, adjusting, of not total good customers come a of math a do units think that has is with I there same I'm more is some what seeing choose to versus have little expected everyone and do bottle feel doing tube and range that bit amount that saying, we're that of how We a the really of is like of to We not been feel margin and sales overall and of right? there frugal or that through. right money

saying, tool last year year, broken, I where know boom COVID don't the as add-on compared frequently. that to people need take styling that say maybe or I'll unless core do people the outside hold over actually my I it's feel another are the was see which the to size we categories of about, going off. purchase more I Maybe basket reopening, So it's I if that quite good maybe amount

the really and price making. we're our back what as made modeling specifically on that forms. decision we step by and seeing in to what really be able doing the can in on focused communications customer watch in seeing a that but think market, through, means over that's lot time one, put When if we're we about come they're we is other of we Overall of value, adjustments value. pricing lot our in different the ourselves move do, it their to will to a for what think customers front. move shoes And increases continue really about comes we've that we've they're that be that seeing as we as to turned So

of that at see communication there are. in stepping message we're to also about seeing looking number grey interesting been weeks, new coverage. four core we've the pro the on a the that's in until that the grey getting a less, has very a for weeks real. reinforcing more Sally beauty virtual ago. and our it's one we four advisors who about experts, color coverage, using it became out store question seen notable that also and And up We're on on our customer advice trending quality First number it reminding uptick one frequent grey We're coverage. tagline for question last customers the Been lot with up of not that's questions

a list pro of place are about the can value, have the the to we we're starts on we product So the just price customers we so than focus sure when provide our a the product in on what how to have use that product, expertise at doing to really delivering the fuel value make in sure make it, news equation customer expertise more that and

Steph Wissink

color. Thank very you much. helpful Always

Operator

you. Thank

Our And line next of your Cowen. Chen Oliver with question from comes the line open. is

Oliver Chen

Marlo. Hi, Denise. Hi

traffic and the get volatility more or and sense guidance, we're gets dynamic see you of consumer very the minds this are as UPTs? of with will better? worse interplays on what's-- seeing in how think Was about it's all Thanks. frugal the trends a cross Regarding consumer. accelerating in and inflation year, concerned you the it and situation the just curious consumer, with And your that and before happening about we next the currents

Denise Paulonis

right see the now UPT. that and on seeing we're I a it on is bigger are pressure off way I'll we start little traffic point bit think and we then

piece that's somebody within they're they traffic there a we waiting into is things ways cost in mind is something bit what little things. of that piece their spending getting as getting waiting, to you're trickier, bit be a expect comes around things they harder choice that. constrained more is that So that that a and The in basket, have the to they're store, are when your doing around when waiting are when want, to to spend. doesn't working and in the our piece the we're them coming really spending customer come and and and going frugal would filling mindset And know store

different what mentioned, as and why product and tactics. of someone resonate lot offer spend. I the trying also about with we worth can we're talking We're So we coming it's doing that the value how a about into some spend equation when just of promotional

So promotion we're we're increasing tweaking might overall able current to environment not what be address. to our but the

you it's going to three the is psychology what get we off it the pull if a going change recently And you're color which took we do see. to just was was actually shopped, we it. think medicine out that hoping net who the over loading. promotion just didn't really their not when to frequency you that had could and under a came August. they're XX% way get to advantage period really earlier months, decline actually of we're- promotions, but month We that might this the sales, with said forward tested your purchases there four in could launched they they they concern mitigate The fascinating you that spend the think positive think when there they there So I versus it their going that subsequent it and it, buy a in, pantry came increase is we're four the be use what be saw because cabinet, in customers in about I to here they year they that over unit we would is in, customer have-- sale really started

and maybe little go hesitate going have a spend bit to to to out it, we need you If again buy and longer. store a you're to

So getting down, on. be up to people why spend dollars and promotional these a stock are make frequency messaging units then are as of where get great value things and that going our is to pro nuances extra extra we're come focused product we two be the quality to and to to trip the we place remind really

Oliver Chen

we and know about models how inventory impacted on you. Okay, you've this magnitude what's as us evolve. front, a should assortment chain about our great that's details, the thank lot And may timing the think of the we and of of given or percentage supply what

Denise Paulonis

Yes.

bit about characterized the a quarter we were count So SKU missed, supply as was $XX our absolute pressure think that XXXX will there it be the of We worth be go the about it that's is dependent down million more should SKU, macro that around out won't as changes and our meaningfully ramp we in into what in XXXX but vendors in million. we upon QX,pressure I then even certainly hope given about talking going sales a down, but would of I as think is that it fiscal further. us. world $XX into in anymore, still this push come we third as

Oliver Chen

lesser We've you seen industry, that? seeing have question. and your some you the digital your efficiency been the of marketing on How retail relative to do across stores? last about Okay, traffic sides businesses physical conversion feel online

Denise Paulonis

sharpen, year site but we Yeah. as land and great about up of we've site, the to the shopping continue feel throughout the on been and seen gets to the ease itself, the nice customer Interestingly increases. then traffic, nice we on the conversion we've the site, and in they way seen online. conversion has what ticking our It

we're we going to buck mix spending where quarter our what reason And on in year good marketing flip this seen terms to numbers of a us a certainly haven't bang rate. changed where traffic developing in money and quarter be for we what very for amount true pivot. us terms read materially model do sensitive of spent kind are through to our effort is of regularly we Our and over in our this why able of we've are one might get vehicles

we're month, quarter That's sure So what's be be a the way benefits and for capability to think we're tool, those a I get the dollars starting seems relevant every deploying new back real-time every customer us can and as we the it. we see step through. to come new to as

Oliver Chen

regards. Thank you. Best

Operator

Thank you.

your Raymond with James. comes open. the is Olivia And question next line Our of Tong from line

Olivia Tong

full Great, talked Good consumer, year. get sales to for AUR little up. thank the you. bit the outlook weaker then discussed I We've under but you obviously morning. going about a wanted the also

a little just-- had QX we bit than was So and better anticipated.

way? a come currency? for then things consumer, weakening, in And of to of-- your Thank embedded little you. perspective about opposite talk on sales are just could on the AUR outside the what of a view little bit going expectation bit is the your you why So sort lighter outside if full-year within

Marlo Cormier

start I'll Maybe with talk the some and second then can Denise trends. question, the more about consumer

mathematical kind same quarter, the things that bit at When in continues, lot impact seeing about side. guidance that we're impact pretty QX. full last little QX of it's a XXX in currency. really, relative terms exercise and probably move a impact on in the the thinking of We more the a But inflation off a move we're had year. know trend basis QX, a look we that, we intensity the you on you In to point I significant how similar of see see of on left or where

front lower on down A more good a of what inflationary to as Europe the we a in of that that's good magnitude end little move range. So, really the pressure well. bit and guidance the seeing the

us those things lower moved the combined So range. two towards

Denise Paulonis

look think I piece change at when build real was see guidance, some dominant that against we And a do is the on. just positive FX, that we the on and initiatives [indiscernible] to I which what's Yeah. the the the I think of besides consumer happening, of would looking

BSG the QX, seeing just as more just in So to both go customers through business in working see as lot and as really stores we we we're off-sets and what we're we will We a a we more customer Sally up personalization our bring of being of journeys, those our bit Regis business more frugal. nails reset and stand

coloring going our The natural pricing, AUR about more up. that's asked and core and specifically a the have us out basket have we a truly might AUR to just year. high straightening where items where were or lost such last blow we of the difference compared makes business bigger hair as AUR, of You iron, than taken so dryer that we is movement to and of

that pricing have [indiscernible] more just So anticipated. as we coming through would seeing

Olivia Tong

Greys then obviously time, trends general in Hi, in That was of to don't wanted in last some perspective, thanks. from few coverage. but would you so and I great. terms consumer Thank view view the Covering grey Vivid particularly interest color, for huge just color of the mean years, your be outside terms And the just of in get much.

Denise Paulonis

Overall, of and what last represents of quite hair, hair terms XX in last Sally, expression, think from seen our XX% months, and seeing strong, over personalization, over in behavior Vivid meaningful we've it pretty flat still change not seen that's XX to penetration. pretty quarters we I tenant what to business any the are is flat it's customers the In we've few

If to a away last year. with from drop-off a no and interest year color business that. we statistics more there in Sally fund choose lighter And we in I remains experimenting on color really people pop a think it then trend, about do talked step generally people this in also were than color, they a do or where because of types short-term then core and So lot overall as the really we of you of can semi-permanent were get little

talked really-- a different side, and were And trend, in reemerged last there, I out fuel our out would the as issues year turn. took stocks. color vendor happened with slightly we have quite the COVID business remained the as in only people excluding vendor a about of of color positive of demand think actually about, consumer, stock comp really the that's business were that The BSG the we strong. the some BSG, I of feel that vaccines more thing held think color posted on we we reopening us back

for that coverage good personally different that ways that watch and thinking about people more overall. So hair to we be still we interesting grey and hair achieve trend, I be trend as an optimistic into our feel as the color, Year. may real think could is further QX And business are New

Olivia Tong

much. Best of luck. you. Operator so Thanks Thank

We is Morgan line your Simeon will line of Stanley. next go And Gutman with the to open.

Unidentified Participant

improve on on is was guys expect segment, it you you're Justin Hey key guys wondering in good if a competitors. progress Earlier then share volume saw, talk, and QX. to Simeon, I you the mentioned think going the quarter actually your taking guys, behalf for that guys you maybe just you this the my into from could price taking question. BSG that mentioned thanks towards and you for end of and if little you bit a you're more towards detail little seeing color

Denise Paulonis

the of about of improvement specifically that quarter, talked was just and business, the the we the if to regards BSG overall think towards our end with in-stocks. I Yeah,

that got quarter to more of And positive customer of back traffic. do for terms get coincided of of good it our also provided in appreciation and that's saw over time were a with more ourselves sale, there better with we shop. some customers some we with value, basket what that So and looking SKUs just into see that convert in and every key and the we where they a value kind folks in-stock saw of the out vendors trend

have I other then I forgetting to question now. And happy forgive what So think I'm that me, am, seeing. we back are your are inventory which in stock we and right

Unidentified Participant

in think you was taking BSG you're guys share the if It segment.

Denise Paulonis

the our with is we Yeah, we general-- in BSG. in to currently of in stable. see The our to in, our color about customers in the slowdown stocks, gap accounts get us hard actively feels a conviction But of good like in that custody-- gives view share that holding numbers, can great have still a stock. but we of the think little customer remains in color in I care thing one of in working coming and out a X%, back and growth are know that think those business everything that bit are vendor because we care the rate the growing healthy I

at product I get going back we we with that looking that. our earlier, our new reset XXXX We our accounts we maintain we'll Regis lot QX, grow than have we're to more as to BSG. adding just share in importantly, to XXXX be and with going great business, we but really our with a stock hard now share ability be online nail And as that mentioned The good to our it's of business within even line build walls coming how about customers. we vendors. a just working so look to feel So also rather

of to whole access think base. bit I a different a customer us gives

really right our in more their there stylist get being into businesses, also our one a the on we products but nail-tech clearly new back Express. the there then that stores So our that focused as now, that make for stylists businesses. to to and difference independent understand we're people leverage believe their is big And buy participate assortment for they of a

So XXminute longer difficult instead base over in efficient chair, new to XX a process in turning pretty client a color being she can of process to her time, be a able more her minute running the in much is important.

that we're piece vendors stock as as to so convert as back well. So come are through of Express our for color can that all working share our we in with in vendors to well growing

Unidentified Participant

insight being up that, on you think it. color Got mentioned Thank of due And you stock. just you you're provide far. can of care maybe before a down you quick out other nail walls performing or in as follow-up mentioned category? say diversions seeing I that's in you. you. biggest Or about Thank thus Would are categories business the new to another X%, you X% kind the any

Denise Paulonis

fully, positive the walls the go far products in so core huge are seen as that and The were be and a in so, color largest quarter, reset into by store. the them. really very Early they'll more third of within Yeah businesses represents QX behind we've base kind more full on, care we response. BSG, nail of coming

it. weeks our And there, getting out under that with it's people of kind sets four it's about we're so figuring are messaging or new, out the of three belt,

I would it call So positive. far, so

Unidentified Participant

luck. Best you. it. of Thank Got

Operator

you. Thank

Our Casella next with Carla come the question line is of your JP line And from will Morgan. open.

Carla Casella

dilutive is side, business margins this at to am point. I or the that accretive on Hi, wondering e-com

Marlo Cormier

e-com question? was Sorry, the margins, that

Carla Casella

Yeah. worse Are the in-store? margins or than better

Marlo Cormier

Yeah.

on quite journey been with we've So a e-com.

more we I First of our was up, of we building improvements point throughout now have of say still profitability. getting both time good speed a in a We're where a our suite have with that since about capabilities amount tremendous I in made further mean, at and into on so the that bringing and personalization we the and full CRM the were all standing capabilities. enhance that. and have stood part a our now the early would which the overall bit is on cancellation into fulfilled bringing ADEC. the of more all of operational from customer as a it profitable that well in banners just journey it splits, on digital COVID we up, doing mix business as to in store, improving terms improvements, of being through that out our as well experience. In platform

you've talked-- heard about You've conversion. us better talk

have just a we much operation So more efficient as well.

banner now always approach, to now parity, We profitability, a terms has closer. And I BSG so at point. stronger of store to and mean to caught up been since BSG, have to are are that say ever this don't getting be has there Sally but profitability to we approach starting the perfect expect now starting we time, I are we in

Carla Casella

to shift on-- a spent are that as looking the-- you're then the even or business And just the to great. supply Or That's change how for holiday? any and chain, of assorting consumer given environment kind given on just time? growing so because see we putting-- nail hair stores going you've much a categories, shift time color, and lately and in holiday the

Denise Paulonis

aren't think about that, I So a when big seasonal we business.

have the how tree. and the think tools is We don't that maybe affordable see the holiday, I period. about gifting for become think do we for more make our the that get you stocking rest In things more that thinking through things we front coming and into typically holiday we're styling which complementing more the time you always stores, in the see you different gifts store preparation luxuries good suffers about a of then for year. a our do, what on So other can bit customers have much buy-in one, under

assortment, cause think the that bringing part where any suffers, but to seasonality we're we it's products. is, when something forward that mind in our we're it just is we be be head will out day on stock in, assortment different a differently that holiday in right? taking customers go important our to clearly day knowing going might I'm up products us So little isn't those say for there most I than stocking buy So at core

So hope we a certainly season. that see we nice gifting

impacting it all and last we all quickly by was did general things bit store activity. labor think just and Omicron the joys that a December I the of forget hampered that

about to that and but we're that get huge seasonal a Realizing think think does a in customer not us out light, holidays I business. want we're So their for more positive also hopeful back

Carla Casella

the target then given Okay, the any in debt kind there, of And of of or pay-down, buy? revolver a great. thoughts terms timing the

Marlo Cormier

I but best our business strong across in going investments, don't we a assess the position, structure to generation continue overall debt. say Yeah, have returning uses being we're capital target would optimizing to our of value date, specific our a shareholders,and cash to

Carla Casella

you. Okay, great. Thank

Operator

And that, with we you. Thank further questions. no have

closing please with any ahead So, go remarks.

Denise Paulonis

excited how we just for Holdings. you and do. our our Beauty and that happiness do customers and they business, across we is appreciate hard associates we always They in about to work the all globe. Sally minute I'll go thank the all you a forward to serve to interest. a thank day care, so we're can that big customers, color, every interest our appreciate take And We're and to about where bring headed the we're say excited

quarter. we'll thanks you talk for So again that to and next

Operator

gentlemen, conclude for Thank for conference does Service. Teleconference using ladies Executive And and you. your AT&T participation for you and Thank your call today, that

disconnect. may You now

Sally Beauty (SBH) 6 Aug 222022 Q2 Earnings call transcript