Sally Beauty Supply 2006 Annual Report Download - page 43

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Table of Contents
Key Operating Metrics
The following table sets forth, for the periods indicated, information concerning key measures we rely on to gauge our operating
performance (dollars in thousands):
Year Ended September 30,
2006 2005 2004
Net sales:
Sally Beauty Supply $ 1,419,332 $ 1,358,899 $ 1,296,057
Beauty Systems Group 953,768 895,408 801,610
$ 2,373,100 $ 2,254,307 $ 2,097,667
Gross Profit $ 1,086,771 $ 1,027,000 $ 950,853
Gross profit margin 45.8% 45.6% 45.3%
Selling, general and administrative expenses $ 822,695 $ 789,447 $ 711,208
Operating earnings:
Sally Beauty Supply $ 188,786 $ 168,663 $ 151,811
Beauty Systems Group 66,928 55,584 70,895
Segment operating profit 255,714 224,247 222,706
Unallocated sales based service fee (28,852 ) (27,615 ) (26,051 )
Stock option expense (5,186 )
—
—
Non-cash charge related to Alberto-Culver’ s conversion to
one class of common stock
—
(4,051 ) (27,036 )
Transaction expenses (41,475 )
—
—
$ 180,201 $ 192,581 $ 169,619
Segment operating profit margin:
Sally Beauty Supply 13.3% 12.4% 11.7%
Beauty Systems Group 7.0% 6.2% 8.8%
Consolidated operating profit margin 7.6% 8.5% 8.1%
Number of stores at end-of-period (including franchises):
Sally Beauty Supply 2,511 2,419 2,355
Beauty Systems Group 828 822 692
3,339 3,241 3,047
Comparable store sales growth(1)
Sally Beauty Supply 2.4% 2.4% 3.8%
Beauty Systems Group 4.1% (0.6 )% 8.5%
Consolidated 2.8% 1.8% 4.6%
(1)
Comparable stores are defined as company-owned stores that have been open for at least 14 months as of the last day of a month.
Description of Revenues and Expenses
Net Sales. Our net sales consist primarily of the following:
• Sally Beauty Supply. Sally Beauty Supply generates net sales primarily by selling products through its stores
to both professional and retail customers. Various factors influence Sally Beauty Supply’ s net sales including
local competition, product assortment and availability, price, hours of operation and marketing and
promotional activity. Sally Beauty Supply’ s product assortment and sales are not seasonal in nature.
• Beauty Systems Group. BSG generates net sales by selling products to salon professionals and independent
stylists through company-owned and franchised stores as well as through its network of professional
distributor sales consultants. Various factors influence BSG’ s net sales, including product breadth and
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