What happened
Shares of Sally Beauty Holdings (SBH -5.22%) rose on Thursday after the beauty supplies retailer and distributor reported its fourth-quarter results. Despite a decline in same-store sales, the company managed to beat analyst estimates for both revenue and earnings. The stock was up about 20.2% at 1 p.m. EST on Thursday.
So what
Sally Beauty reported fourth-quarter revenue of $966 million, down 0.8% year over year but about $3 million higher than analysts were expecting. Same-store sales slumped by 0.2% overall, with flat same-store sales in the Sally Beauty Supply segment and a 0.8% same-store sales decline in the Beauty Systems Group segment. Global e-commerce sales surged 30.1% year over year.
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Non-GAAP earnings per share (EPS) came in at $0.51, up 13.3% year over year and $0.04 better than the average analyst estimate. A lower tax rate, lower interest expense, and a reduced share count drove the company's earnings growth. GAAP operating income was down 7.7% year over year.
Now what
For fiscal 2019, Sally Beauty is expecting flat same-store sales, flat gross margin, and mid-single-digit growth in both GAAP and non-GAAP EPS. Lower interest expense from reduced indebtedness and a lower share count will help drive per-share earnings higher despite a lack of sales growth.
While Sally Beauty is still grappling with declining comps, earnings growth coupled with guidance calling for a sales-trend improvement was enough to send the stock soaring.
