Sally Beauty Holdings, Inc. (NYSE: SBH) (“the Company”) today
announced that its Board of Directors has approved a cost reduction
plan designed to help fund important long-term growth initiatives.
This program includes cost savings initiatives focused on
organizational efficiencies, sourcing of product and brands for
resale, indirect procurement, store operating expenses, and
inventory management. As a first step, the Company is implementing
headcount reductions, primarily at its corporate headquarters in
Denton, Texas, which represent an expansion of the restructuring
plan announced this past November (“2018 Restructuring Plan”) and
reflects the Company’s continued focus on streamlining operations
and improving efficiencies in order to drive long-term profitable
growth.
The substantial benefits from these new initiatives are expected
to be reinvested into market-competitive store wages; the
acceleration of technology investments that will improve customers’
in-store experience, accelerate e-commerce growth and provide
better visibility to store-level inventory; and, importantly,
initiatives that will strengthen the Sally business in the U.S. and
Canada by increasing focus on its core hair color and hair care
categories. These cost reduction initiatives and reinvestment plans
are all part of the Company’s strategic plan designed to generate
future profitable growth.
The new organizational efficiency actions are expected to
generate annualized benefits in the range of $14 million to $15
million, with benefits in fiscal year 2018 in the range of $6
million to $7 million. It is expected that the remaining work
streams noted above will generate further substantial benefits as
the strategies are finalized and implemented over the balance of
the current fiscal year and beyond. The Company intends to reinvest
these benefits to support the strategic initiatives noted above.
The charges to be incurred in connection with this plan in fiscal
year 2018, consisting primarily of costs related to employee
separation and third party consultants, are expected to be in the
range of $15 million to $16 million.
The restructuring actions disclosed earlier this fiscal year
(focused primarily on the Company’s international operations) are
still expected to generate annualized benefits in the range of $12
million to $14 million, with approximately $8 million realized in
fiscal year 2018. Total restructuring charges related to the
expanded 2018 Restructuring Plan, including the international
restructuring initiatives previously disclosed, are now expected in
the range of $28 million to $30 million, the majority of which are
expected to be recorded in the current fiscal year, including
approximately $6 million that was recorded in the Company’s fiscal
first quarter ended December 31, 2017.
“We have dedicated a substantial amount of work over the last
several months into the development of initiatives that we expect
will generate meaningful financial benefits, within both product
margin and G&A expenses,” stated Chris Brickman, President and
Chief Executive Officer. “We plan to utilize these benefits to
maintain our profitability and fund the key investments required to
transform the business and intensify our focus on our most
differentiated categories - hair color and hair care.”
“Our unique assortment and demonstrated expertise have
established us as the market leader in hair color and hair care,
and these categories have sustained healthy growth while other
categories have faced increasing competition. We will be
reinvesting in strategic initiatives to accelerate growth in color
and care, which, combined, represent more than half of Sally’s
revenue in the U.S. and Canada. Similar to how our Beauty Systems
Group segment is the color and education destination for the
professional stylist, Sally’s primary goal is to have every
customer feel confident in her ability to color and care for her
own hair, and we will tailor our assortment, service and education
to ensure we are her go-to store for that purpose,” concluded
Brickman.
About Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc. (NYSE: SBH) is an international
specialty retailer and distributor of professional beauty supplies
with revenues of approximately $3.9 billion annually. Through the
Sally Beauty Supply and Beauty Systems Group businesses, the
Company sells and distributes through 5,177 stores, including
approximately 184 franchised units, and has operations throughout
the United States, Puerto Rico, Canada, Mexico, Peru, Chile, the
United Kingdom, Ireland, Belgium, France, the Netherlands, Spain
and Germany. Sally Beauty Supply stores offer up to 8,000 products
for hair, skin, and nails through professional lines such as OPI®,
China Glaze®, Wella®, Clairol®, Conair® and Hot Shot Tools®, as
well as an extensive selection of proprietary merchandise. Beauty
Systems Group stores, branded as CosmoProf or Armstrong McCall
stores, along with its outside sales consultants, sell up to 10,500
professionally branded products including Paul Mitchell®, Wella®,
Matrix®, Schwarzkopf®, Kenra®, Goldwell®, Joico® and Aquage®,
intended for use in salons and for resale by salons to retail
consumers. For more information about Sally Beauty Holdings, Inc.,
please visit sallybeautyholdings.com.
Cautionary Notice Regarding Forward-Looking
Statements
Statements in this report which are not purely historical facts
or which depend upon future events may be forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Words such as “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “plan,” “project,”
“target,” “can,” “could,” “may,” “should,” “will,” “would,” or
similar expressions may also identify such forward-looking
statements.
Readers are cautioned not to place undue reliance on
forward-looking statements as such statements speak only as of the
date they were made. Any forward-looking statements involve risks
and uncertainties that could cause actual events or results to
differ materially from the events or results described in the
forward-looking statements, including, but not limited to, risks
and uncertainties related to: our ability to implement and achieve
benefits from the cost reduction initiatives and reinvestment plans
in multiple jurisdictions; our ability to manage the effects of our
cost reduction plans including headcount reductions; possible
changes in the size and components of the expected costs and
charges associated with the restructuring plan; our ability to
realize organizational efficiencies and expected cost savings
within the anticipated time frame, if at all; our ability to
successfully implement our long-term strategic and growth
initiatives; and diversion of our management’s time and attention
from the operation of our businesses.
Additional factors that could cause actual events or results to
differ materially from the events or results described in the
forward-looking statements can be found in our filings with the
Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K for the year ended
September 30, 2017, as filed with the Securities and Exchange
Commission. Consequently, all forward-looking statements in this
release are qualified by the factors, risks and uncertainties
contained therein. We assume no obligation to publicly update or
revise any forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180404006287/en/
Sally Beauty Holdings, Inc.Jeff Harkins, 940-297-3877Investor
Relations
Sally Beauty (NYSE:SBH)
Historical Stock Chart
From Apr 2024 to May 2024
Sally Beauty (NYSE:SBH)
Historical Stock Chart
From May 2023 to May 2024