What: Shares of Sally Beauty Holdings Inc (NYSE:SBH) were getting dumped today, falling as much as 11% and finishing down 7.5% after a posting a disappointing earnings report and announcing its CEO succession plan.
So what: The beauty-products retailer saw revenue tick up 2.4% in its second quarter to $919.5 million, but that was short of analyst estimates at $932.8 million. Profits also missed, coming in at $0.36 against expectations of $0.39 as CEO Gary Winterhalter noted "extremely unfavorable weather" in the quarter. Still, the company managed to deliver a 1% gain in same-store sales, and Winterhalter said warm weather locations saw positive traffic, which bodes well for the company as a whole going forward.
Now what: Separately, the company also announced its CEO succession plan, saying it had appointed Christian Brickman as its new COO and president and that Brickman would replace Winterhalter as CEO one year from now. Winterhalter has been CEO since 2006, during which time the stock has tripled, so investors may be reluctant to see him go, but he will remain as chairman of the board through January 2018. Though Sally Beauty missed estimates in the quarter, I wouldn't be too concerned with the performance, as many retailers blamed poor weather for slow traffic, and the company still managed to grow comps during the period, which shows resilience and organic strength.
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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.