Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market for the Registrant’s Common Equity
Market Information
Our common stock is listed on the New York Stock Exchange under the symbol “SBH.”
Holders
As of November 13, 2020, there were 609 stockholders of record of our common stock.
Dividends
We have not declared or paid dividends at any time during the two fiscal years prior to the date of this Annual Report. We currently anticipate that we will retain future earnings to support investments in our business, to repay outstanding debt or to return capital to shareholders through share repurchases. Any determination to pay dividends will be made at the discretion of our Board of Directors and will depend on our financial condition, results of operations, contractual restrictions, cash requirements and other factors that our Board of Directors deem relevant. Furthermore, as a holding company we rely on cash from our subsidiaries to pay dividends. The terms of our debt agreements and instruments significantly restrict the ability of our subsidiaries to make certain restricted payments to us and our ability to pay dividends. Additionally, we and our subsidiaries may incur substantial additional indebtedness in the future that may severely restrict or prohibit our subsidiaries from making distributions, paying dividends or making loans to us.
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Performance Graph
The following performance graph and related information shall not be deemed “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
The following graph illustrates the five-year comparative total return among Sally Beauty Holdings, Inc., the S&P 500 Index (“S&P 500”) and the Dow Jones U.S. Specialty Retailers Index (“DJ US Specialty Retailers”) assuming that $100 was invested on September 30, 2015, and that dividends, if any, were reinvested. The DJ US Specialty Retailers is a non-managed index and provides a comprehensive view of issuers, including our common stock, that are primarily in the U.S. retail sector.
Fiscal year ended
September 30, 2015
September 30, 2016
September 30, 2017
September 30, 2018
September 30, 2019
September 30, 2020
Sally Beauty Holdings, Inc.
$
100.00
$
108.13
$
82.44
$
77.43
$
62.69
$
36.59
S&P 500
100.00
115.43
136.91
161.43
168.30
193.80
DJ US Specialty Retailers
100.00
98.84
111.56
166.83
158.01
226.77
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ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected financial data of Sally Beauty for each of the years in the five-year period ended September 30, 2020 (dollars and shares in thousands, except per share data):
Fiscal Year Ended September 30,
2020
2019
2018
2017
2016
Results of operations:
Net sales
$
3,514,330
$
3,876,411
$
3,932,565
$
3,938,317
$
3,952,618
Cost of goods sold
1,798,736
1,965,869
1,988,152
1,973,422
1,988,678
Gross profit
1,715,594
1,910,542
1,944,413
1,964,895
1,963,940
Selling, general and administrative expenses (a)
1,442,809
1,452,751
1,484,209
1,463,619
1,465,643
Restructuring
14,025
(682
)
33,615
22,679
—
Operating earnings
258,760
458,473
426,589
478,597
498,297
Interest expense (b)
98,793
96,309
98,162
132,899
144,237
Earnings before provision for income taxes
159,967
362,164
328,427
345,698
354,060
Provision for income taxes
46,722
90,541
70,380
130,622
131,118
Net earnings
$
113,245
$
271,623
$
258,047
$
215,076
$
222,942
Earnings per share
Basic
$
0.99
$
2.27
$
2.09
$
1.56
$
1.51
Diluted
$
0.99
$
2.26
$
2.08
$
1.56
$
1.50
Weighted average shares, basic
113,881
119,636
123,190
137,533
147,179
Weighted average shares, diluted
114,680
120,283
123,832
138,176
148,803
Operating data:
Number of stores, including franchises (at end of period):
SBS
3,653
3,695
3,761
3,782
3,781
BSG
1,385
1,366
1,395
1,368
1,338
Consolidated
5,038
5,061
5,156
5,150
5,119
Distributor sales consultants (at end of period)
715
748
820
829
914
Same store sales growth (decline) (c) :
SBS
(8.1
)%
0.4
%
(1.5
)%
(1.6
)%
1.7
%
BSG
(8.3
)%
0.2
%
(1.5
)%
1.3
%
5.5
%
Consolidated
(8.1
)%
0.3
%
(1.5
)%
(0.7
)%
2.9
%
Financial condition (at end of period):
Cash and cash equivalents
$
514,151
$
71,495
$
77,295
$
63,759
$
86,622
Inventory
814,503
952,907
944,338
930,855
907,337
Total assets (d)
2,895,147
2,098,446
2,097,414
2,099,007
2,095,038
Operating lease liability (d)
547,642
—
—
—
—
Long-term debt, excluding current maturities
1,796,897
1,594,542
1,768,808
1,771,853
1,783,294
Stockholders’ equity (deficit) (e)
15,443
(60,323
)
(268,556
)
(363,616
)
(276,166
)
(a)
In the fiscal years 2020, 2019, 2018, 2017 and 2016, selling, general and administrative expenses include depreciation and amortization of $106.8 million, $107.7 million, $108.8 million, $112.3 million and $99.7 million, respectively.
(b)
In the fiscal years 2017 and 2016, interest expense reflects a loss on extinguishment of debt of $28.0 million and $33.3 million, respectively, related to our refinancing of certain outstanding senior notes in the ordinary course of our business.
(c)
For the purpose of calculating our same store sales metrics, we compare the current period sales for stores open for 14 months or longer as of the last day of a month with the sales for these stores for the comparable period in the prior fiscal year. Our same store sales are calculated in constant U.S. dollars and include e-commerce sales from certain digital platforms, but do not generally include the sales from stores relocated until 14 months after the relocation. The sales from stores acquired are excluded from our same store sales calculation until 14 months after the acquisition.
(d)
In fiscal year 2020, we adopted Accounting Standards Update No. 2016-02, Leases , using a modified retrospective transition method without restating comparative periods and resulted in the recognition of operating lease assets and lease liabilities. See Note 3 of the Notes to Consolidated Financial Statements in Item 8 contained in this Annual Report for additional information.
(e)
Stockholders’ equity (deficit) for the fiscal years 2020, 2019, 2018, 2017 and 2016 reflects the repurchase and retirement of 4.7 million shares, 3.6 million shares, 10.0 million shares, 16.1 million shares and 7.8 million shares of our common stock at a cost of $61.4 million, $46.6 million, $165.9 million, $ 346.1 million and $207.3 million, respectively, under share repurchase programs approved by our Board of Directors.
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