Sally Beauty Holdings is accelerating its store optimization plans.
The company said it plans to close approximately 350 stores during December 2022 amid ongoing efforts to improve its profitability. Most of the store closings will be in the United States. (The retailer currently operates more than 5,000 stores worldwide, with approximately 4,500 in North America.)
“Over the last several quarters, the company has been piloting store closures in various markets with the goal of maximizing the value of its large store portfolio and providing a seamless omnichannel experience to its customers,” Sally Beauty stated.
In addition, Sally Beauty said it is closing two small distribution centers in Oregon and Pennsylvania, and transferring the volumes to larger distribution centers, effective in December.
As part of its optimization plan, the company incurred a $45.5 million charge in the fourth quarter of 2022, which includes a $19.4 million non-cash inventory write-down. The expense savings from this optimization plan is expected to be approximately $50 million with an expected benefit of approximately $10 million to adjusted operating earnings for fiscal year 2023.
Sally Beauty reported consolidated net sales of $962 million, a decrease of 2.8%, for its fourth quarter, ended Sept. 30. Comparable sales were flat compared to the prior year.
For the full year, the company reported consolidated net sales of $3.82 billion, a decrease of 1.5%, with a comparable sales increase of 0.6%;
“In fiscal 2022, we delivered net sales of $3.8 billion, gross margins above 50% and adjusted EBITDA of more than $500 million amidst a highly dynamic and challenging macro environment,” said Denise Paulonis, president and CEO. “Our teams executed well, navigating inflationary pressures and supply chain headwinds, while remaining focused on serving our customers.”