WELCOME TO THE NEW SALLY. NEW L LOOK. K. N NEW E EXPER ERIEN - - PowerPoint PPT Presentation

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WELCOME TO THE NEW SALLY. NEW L LOOK. K. N NEW E EXPER ERIEN - - PowerPoint PPT Presentation

WELCOME TO THE NEW SALLY. NEW L LOOK. K. N NEW E EXPER ERIEN ENCE. E. Sally Beauty Holdings, Inc. Fis iscal l 2020 2020 F First Qu Quar arter Ear arnin ings C Call all February 6, 6, 2020 2020 Forward-Looking Statements and


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SLIDE 1

WELCOME TO THE NEW SALLY.

NEW L LOOK.

  • K. N

NEW E EXPER ERIEN ENCE. E. Fis iscal l 2020 2020 F First Qu Quar arter Ear arnin ings C Call all

February 6, 6, 2020 2020

Sally Beauty Holdings, Inc.

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SLIDE 2

Sally Beauty Holdings, Inc.

Forward-Looking Statements and Non-GAAP Financial Measures Statements in this presentation which are not purely historical facts or which depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act

  • f 1934, as amended. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be

identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “can,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “will,” “would,” “anticipates,” “potential,” “confident,” “optimistic,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations and future

  • plans. Forward-looking statements can also be identified by the fact that these statements do not relate strictly to historical or current

matters. Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were

  • made. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from

the events or results described in the forward-looking statements, including, but not limited to, the risks and uncertainties described in

  • ur filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended

September 30, 2019, as filed with the Securities and Exchange Commission. Consequently, all forward-looking statements in this presentation are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements. This presentation includes certain financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States, or GAAP, and are therefore referred to as non-GAAP financial measures. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures is provided in the appendix of this presentation.

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SLIDE 3

Financial Recap of the Quarter

SSS SBH -0.3% SBS -1.1% BSG +1.2% & Highest Revenue Ever

Global E-commerce Sales Up 27.6% vs PY Higher SG&A as Expected Operating Earnings & EPS Declined

Sally Beauty Holdings, Inc.

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SLIDE 4

Loyalty and Digital Capabilities

Refreshed BSG E-commerce Site New Sally Mobile App 16M+ Active Members Refreshed Sally E-commerce Site

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SLIDE 5

Additional Digital Capabilities

ColorView Kiosk Technology in Stores ColorView Technology via the Sally Mobile App Same Day Delivery

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SLIDE 6

Our Transformation Reflects the Industry

Improving our retail fundamentals Advancing our digital commerce capabilities Continuing to drive costs out of the business

Sally Beauty Holdings’ Playbook

Increased competition in the retail beauty space Customers desire for more convenient

  • mni-channel

shopping experience Increased investment in stores and technology Rising labor costs and tighter job market

Changing Retail and Beauty Sector Transformation Plan

Playing to win with

  • ur customers: Hair

Color & Care

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SLIDE 7

Playing to Win in Color & Care: Building on Product

Sally Beauty Holdings, Inc.

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SLIDE 8

Real Estate – Store Update

Sally Beauty Holdings, Inc.

Third Ave., Upper East Side

MANHATTAN STORE CONCEPT STORE

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SLIDE 9

Playing to Win in Color & Care: Building on Product

Sally Beauty Holdings, Inc.

Maria Nila Olaplex No. 6 & No. 7

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SLIDE 10

19 20 18 21 22 Bric icks & Mo Mortar t to O Omnic nichann nnel R el Retaile iler 19 20 18 21 22 Core e Retail O il Oper eratio ions ns F From B Brut ute F e Force Ma Manua nual P l Process t to T Tec echn hnolo logy-Ena nable bled 19 20 18 21 22 Produ duct Designe igner t to P Produc uct B Brand nd B Build ilder er 19 20 18 21 22 Old S d Scho hool “ l “Sup upply ply” Ma ” Market etin ing t to Reset et D Digit ital C l Conf nfid iden ence B Brand nding ing 18 22 21 19 Segr gregated, d, S Slow D w Distribu ibutio ion N Node des t to F Flex exible ible R Reple plenis nishm hment 20 18 22 21 19 Unde derinv invested ed S Store E Exper perien ience t to R Refreshe hed S d Store E e Expe perie ienc nce 20

Our Transformation Plan is Built Based on Priorities

Sally Beauty Holdings, Inc.

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SLIDE 11

Q1 Financial Recap

SSS (0.3%) Gross Margin 48.4% SG&A% 38.6% Adjusted EPS $0.47 (1)

Compared to PY: SBS down; BSG up Down 20 bps Up 150 bps Decrease of 17.5%

Sally Beauty Holdings, Inc.

(1) Adjusted EPS is a non-GAAP measure. See Appendix for a reconciliation of this non-GAAP measure.

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SLIDE 12

FY20 Full-Year Financial Guidance

Total Revenue Up 1%-2%; SSS Up 0.5%-1.5%

  • Adj. OE Flat

to PY

EPS & Adj. EPS Up LSD – MSD

(Lower end of the range)

Sally Beauty Holdings, Inc.

Maintained Maintained Modified

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SLIDE 13

Appendix

Sally Beauty Holdings, Inc.

As Reported (GAAP) Restructuring (1) As Adjusted (Non-GAAP) Selling, general and administrative expenses 377,930 $

  • $

377,930 $ SG&A expenses, as a percentage of sales 38.6% 38.6% Operating earnings 94,387 2,531 96,918 Operating margin 9.6% 9.9% Earnings before provision for income taxes 72,846 2,531 75,377 Provision for income taxes (2) 19,631 581 20,212 Net earnings 53,215 $ 1,950 $ 55,165 $ Earnings per share: Basic 0.46 $ 0.02 $ 0.48 $ Diluted 0.45 $ 0.02 $ 0.47 $ As Reported (GAAP) Restructuring (1) As Adjusted (Non-GAAP) Selling, general and administrative expenses 366,987 $

  • $

366,987 $ SG&A expenses, as a percentage of sales 37.1% 37.1% Operating earnings 109,738 3,980 113,718 Operating margin 11.1% 11.5% Earnings before provision for income taxes 85,249 3,980 89,229 Provision for income taxes (2) 19,522 728 20,250 Net earnings 65,727 $ 3,252 $ 68,979 $ Earnings per share: Basic 0.55 $ 0.03 $ 0.57 $ Diluted 0.54 $ 0.03 $ 0.57 $ (1) For the three months ended December 31, 2019, restructuring represents costs and expenses incurred primarily in connection with the Project Surge plan. For the three months ended December 31, 2018, restructuring represents costs and expenses incurred in connection with the 2018 Restructuring Plan. (2) The income tax provision associated with restructuring for the three months ended December 31, 2019 and 2018, was calculated using a 23.0% and 18.3% tax rate, respectively, since realization of a tax benefit for portions of these expenses are currently not deemed probable. Three Months Ended December 31, 2018 Non-GAAP Financial Measures Reconciliations (In thousands, except per share data) (Unaudited) Three Months Ended December 31, 2019