Strong demand touches up Sally Beauty Q3 profit
Aug 4, 2011
August 4 - Sally Beauty Holdings Inc's quarterly profit beat Wall Street estimates for the sixth straight quarter as the cosmetic products retailer continues to lure more beauty conscious people to its stores.
The company, which offers more than 6,000 products for hair, skin, and nails under labels such as Clairol, L'Oreal, Wella and Conair, has been driving traffic by adopting new marketing strategies, like targeting new customers via direct mail offers.
The beauty and hair products retailer has also been converting its new and existing customers to its loyalty program, Sally Beauty Club to spur sales growth.
Peer Ulta Salon Cosmetics & Fragrance Inc is also seeing a steady stream of customers as people continue spending more on grooming.
Sally Beauty has forayed into a higher-margin private brand category and has looked for ways to trim product sourcing costs to boost its gross profitability.
The company's third-quarter gross margins rose 50 basis points to 49.1 percent, while same store sales rose 5.9 percent.
Sally Beauty, which began with a single store in New Orleans in 1964 and now owns about 3,800 stores, distributes professional beauty supplies to retail consumers and salon professionals under two segments Sally Beauty Supply and Beauty Systems.
Excluding one-offs, the company earned 30 cents a share, topping analysts' expectations of 28 cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose 13 percent to $836.6 million, trumping market estimates of $827.4 million.
Shares of the Texas-based company closed at $16.63 on Wednesday on the New York Stock Exchange.
(Reporting by Chris Jonathan Peters and Arpita Mukherjee in Bangalore; Editing by Joyjeet Das, Viraj Nair)
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