Shares of Sally Beauty Holdings (NYSE:SBH) plunged more than 15% on Thursday, following the release of its first-quarter results.
The beauty products retailer and distributor delivered net sales of $980.2 million in the second quarter, down 0.9% compared to the year-ago period. That was below Wall Street's estimates for sales of $994.3 million.
Sally Beauty's adjusted earnings per share, meanwhile, fell 17.5% to $0.47. That, too, was well below analysts' expectations for adjusted EPS of $0.56.
Management blamed a host of factors -- including store closures, a shortened holiday selling season, and technology implementation issues -- for the shortfall. "Although we made significant progress on our transformation program during the first quarter, we fell short of both our top-line and bottom-line goals," CEO Chris Brickman said in a press release.
Management also noted that the company might have to invest additional resources in order to deliver on its growth objectives. In turn, Sally Beauty maintained its fiscal 2020 sales growth guidance but cut its adjusted operating earnings forecast to flat versus fiscal 2019, down from a prior projection of low-single-digit growth.
"In summary, we remain confident that we have the right plan, that the business is highly differentiated and defensible, and that we will return to growth and provide value creation potential for our shareholders over the long-term," Brickman said. "A challenging quarter will not distract us from completing our transformation goals and delivering future growth."
However, judging by the stock's sharp decline on Thursday, investors are less optimistic that Sally Beauty can deliver on Brickman's promises.