Shares of Sally Beauty Holdings (SBH 4.56%) plummeted by as much as 10% today after the company reported fiscal first-quarter earnings. The results were mixed compared to analyst expectations.
Revenue in the fiscal first quarter came in at $936 million, missing the Street's forecast of $967.9 million in sales. That resulted in adjusted earnings per share of $0.50, beating the $0.47 per share in adjusted profits the market was looking for. Comparable store sales declined by 3.7% due to store closures in international markets related to the ongoing pandemic.
"Our teams executed well both operationally and financially in a particularly challenging topline environment," CEO Chris Brickman said in a statement. "Despite the disruption to sales from store closures and capacity restrictions globally and salon shut-downs in California and parts of Canada, we delivered strong gross margins above 50%, closely managed expenses and generated a 6% increase in adjusted diluted earnings per share."
At the end of December, 55% of the Sally Beauty's corporate-owned stores were open, 37% were operating at reduced capacity, and 8% were closed. The beauty products retailer did not provide formal financial guidance for the fiscal second quarter due to ongoing macroeconomic uncertainties related to the public health crisis, but instead offered some commentary on the conference call with analysts.
"Because these [store closures] disruptions are continuing and there is still a great deal of uncertainty related to potential restrictions going forward, we expect net sales to decline in our second fiscal quarter, softening modestly from Q1 levels," Brickman said. "During this time, we are remaining agile and our teams are running the business with operational and financial rigor to preserve profitability and prudently manage cash."