Sally Beauty Holdings Inc. (NYSE:SBH) Q3 2019 Earnings Conference Call - Final Transcript
Jul 31, 2019 • 08:30 am ET
Ladies and gentlemen, thank you for standing by, and welcome to the Sally Beauty Holdings Third Quarter Results Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.
I would now like to turn the conference over to Mr. Jeff Harkins. Please go ahead.
Good morning, everyone, and welcome to the Sally Beauty Holdings third quarter earnings conference call. Before we begin, I want to point out to you that we've made a supplemental slide presentation available for today's call that can be viewed from the link provided on our investor site at sallybeautyholdings.com/investors-relations. These slides will follow along our earnings discussion today.
In addition, I'd like to remind you that certain comments, including matters such as forecasted financial information, contracts for business and trend information made during this call may contain 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 of 1934, as amended. Many of these forward-looking statements can be identified by the use of words such as believe, project, expect, can, may, estimate, should, plan, target, intend, could, will, would, anticipate, potential, confident, optimistic and similar words or phrases. These statements are subject to a number of factors that could cause actual results to differ materially from expectations. Those factors are described in Sally Beauty Holdings' filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K. The Company does not undertake any obligation to publicly update or revise its forward-looking statements. The Company has provided a detailed explanation and reconciliations of its adjusting items and non-GAAP financial measures in its earnings press release and on its website.
With me on the call today are Chris Brickman, President and Chief Executive Officer, and Aaron Alt, Chief Financial Officer and President of Sally Beauty Supply. Chris will offer some thoughts on our strategic positioning and give you an update on our transformation efforts. Aaron will then discuss our third quarter consolidated and segment financial results, touch on our supply chain modernization and then comment on our efforts for the rest of the year.
Now I'd like to turn the call over to Chris.
Christian A. Brickman
Thank you, Jeff, and good morning, everyone.
I am pleased with our results for the third quarter, and we are tracking nicely against a significant change agenda and our goals for the year. The team delivered positive same store sales from Beauty Systems Group for the first time in seven quarters, despite some lingering vendor supply chain issues, which resulted in positive same store sales for the consolidated enterprise.
We also delivered flat gross margins as compared to the prior year, and we delivered significantly lower SG&A expenses driven by our cost savings efforts. This translated into an expansion in operating margin versus prior year and a beat to consensus on both reported and adjusted EPS.
We started out this fiscal year with an aggressive transformation plan and an extensive list