Sally Beauty Supply 2011 Annual Report Download - page 4

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Although we have a 50-year heritage, fiscal 2011
marks our fifth anniversary as an independent
public company. Our business grew significantly
over these last five years:
•฀Consolidated฀sales฀grew฀from฀$2.5฀billion฀in฀fiscal฀
year฀2007฀to฀$3.3฀billion฀in฀fiscal฀year฀2011,฀a฀
compound annual growth rate of 6.8%.
•฀Gross฀margin฀expanded฀approximately฀300฀basis฀
points to 48.8%.
•฀Operating฀earnings฀nearly฀doubled฀and฀net฀
earnings฀reached฀$213.7฀million฀for฀a฀compound฀
annual growth rate of 48.0%.
•฀We฀generated฀significant฀cash฀flow,฀enabling฀us฀
to฀pay฀down฀approximately฀$378฀million฀of฀our฀
long-term debt in addition to funding store growth
and acquisitions.
Our robust performance in fiscal 2011 helped define
the strong results in our five-year history as a public
company. I am delighted to share the highlights of
our fiscal 2011 in more detail.
Strong Financial Results in Fiscal 2011
In fiscal 2011, our consolidated net sales grew 12.1%
to฀$3.3฀billion,฀driven฀by฀strong฀performance฀in฀
both our business segments. Consolidated same
store sales grew 6.1% compared to 4.6% in fiscal
2010. Gross profit margin was 48.8% (expansion
of 60 basis points) and net earnings finished the
year฀at฀$213.7฀million,฀growth฀of฀48.6%.฀Diluted฀
earnings฀per฀share฀reached฀$1.14฀for฀year-over-year฀
growth฀of฀46.2%.฀We฀generated฀$292฀million฀in฀
net operating cash that funded our investments
in฀company฀growth฀and฀a฀$147฀million฀reduction฀
in long-term debt. Our ending debt balance was
$1.41฀billion฀compared฀to฀$1.56฀billion฀at฀fiscal฀
year-end 2010.
Driving Growth Across Our Business
In fiscal year 2011, we continued to implement our
growth strategy through organic store openings
and฀acquisitions.฀We฀increased฀our฀store฀base฀
by 6.2% or 250 stores, for a total store count of
4,309. Organic store openings contributed 4.1%
to our store count and acquisitions added another
2.1%.฀We฀now฀operate฀3,575฀stores฀in฀the฀United฀
States and Puerto Rico. Outside of the U.S. and
Puerto Rico, we operate 734 stores in nine countries:
Canada, Mexico, United Kingdom, Ireland, Belgium,
France, Germany, Spain and Chile. In fiscal year
2012, we believe we can achieve organic store
growth of 4% to 5%.
Business Segment Financial Results
Sally Beauty Supply
Net sales at our Sally Beauty segment were
$2.0฀billion,฀an฀increase฀of฀9.7%.฀Sales฀growth฀
was driven by same store sales growth of 6.3%,
higher transaction volume and average ticket, and
double-digit growth in our international businesses.
Gross margin reached a record annual high of
54.0%, an expansion of 80 basis points over
fiscal 2010. The consistent shift in product and
2–3
Dear฀Fellow฀Shareholders:
Fiscal 2011 was another terrific year of financial performance and
growth for Sally Beauty Holdings, underscoring our strong and
consistent financial track record.