Sally Beauty Holdings Inc. reported that its net sales fell in the third quarter to $705.3 million, a nearly 28 percent drop compared to the same period one year ago, amid a shutdown of almost all of its stores for much of the quarter.
The Texas-based beauty supplier reported on Thursday (July 30) that its losses were partially offset by a surge in online sales and the opening of its shops from mid-April through the end of June.
eCommerce sales were $137 million for Q3, a 278 percent increase from the prior year.
As a result of COVID-19, same-store sales dropped by 26.6 percent for Q3. But given the number of stores that were open, the company said it experienced strong demand in June at 10.8 percent as operations restarted.
GAAP diluted earnings per share in Q3 fell by $0.21, compared to a profit of $0.59 in the prior year.
“We executed exceptionally well during a disrupted third quarter,” said Chris Brickman, CEO and president, in a statement. "The team aggressively managed costs and cash, drove an accelerated pivot to support digital growth and scale our key digital transformation initiatives, and reopened the store network faster than competitors. … as we enter the fourth quarter, we will continue to invest in our digital transformation, take advantage of the strong demand for our key categories, adapt quickly to any new local restrictions or changes to consumer shopping behavior tied to the pandemic, and stay disciplined in terms of cost and cash management.”
At the close of Q3, Sally Beauty Holdings had $839 million of cash on its balance sheets, compared to $364 million at the end of the second quarter.
The company said it reduced inventory levels to a six-year low by the end of June. In addition, it reduced capital spend that was not tied to digital investments. As a result, Sally achieved rent abatements and reduced its marketing and back-office costs.
As of June 30, all stores in the U.S., Canada, the European Union and the United Kingdom were reopened. The company adopted COVID-19 safety protocols including store cleaning, mask and glove-wearing, limitations on numbers of customers and in-store social distancing.