Shares of Sally Beauty (SBH -0.37%) have popped today, up by 9% as of 1:10 p.m. EDT, after the company reported fiscal second-quarter earnings. The beauty products retailer is in the process of reopening its stores.
Revenue in the fiscal second quarter declined 8% to $871 million, slightly ahead of the consensus estimate of $870.4 million. Adjusted earnings per share got cut in half to $0.23, which was $0.01 more than what analysts were expecting. Sally Beauty attributed the steep drop in profitability to continued fallout from the coronavirus outbreak, which has shuttered many retail businesses. Same-store sales slumped 7% during the quarter.
"When COVID-19 struck, the Company accomplished an incredibly adept pivot," CEO Chris Brickman said in a statement. "I would like to recognize the amazing people at SBH who in a few short weeks pivoted the Company to dramatically reduce our cost structure and manage cash, aggressively reinforce liquidity, accelerate the roll-out of in-demand delivery service models, and manage through a massive increase in online demand."
Sally Beauty started to slowly reopen stores last month in line with local regulations. As of last week, approximately 1,100 of the company's retail stores in North America were open to the public, with 1,500 locations offering curbside pickup. Sally Beauty operates around 3,700 total stores.
The company finished the quarter with $364 million in cash on the balance sheet and has taken steps to cut costs such as furloughing corporate employees, reducing marketing spending, and cutting executive compensation. Sally Beauty also recently increased the capacity of its revolver, which now offers $620 million in available credit.
Due to the ongoing COVID-19-related uncertainty, Sally Beauty did not issue guidance for the next quarter.