Supercuts 2009 Annual Report Download - page 57
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Table of Contents
North American Salon Operating Income. Operating income for the North American salons was as follows:
(1)
Increase (Decrease) Over Prior Fiscal Year
Years Ended June 30,
Operating
Income
Operating Income
as % of
Total Revenues
Dollar
Percentage
Basis Point(1)
(Dollars in thousands)
2009
$
275,628
13.0
%
(10,227
)
(3.6
)%
(70
)
2008
285,855
13.7
26,464
10.2
10
2007
259,391
13.6
28,174
12.2
60
Represents the basis point change in North American salon operating income as a percent of total North American salon revenues as
compared to the corresponding period of the prior fiscal year.
The basis point decrease in North American salon operating income as a percent of North American salon revenues during fiscal year 2009
was primarily due to negative leverage in fixed cost categories due to negative same-store sales and lease termination costs associated with the
Company's plan to close underperforming company-owned salons. In addition, the basis point decrease was due to an increase in North
American revenues of $32.2 million related to product sales to the purchaser of Trade Secret at cost.
The basis point increase in North American salon operating income as a percent of North American salon revenues during fiscal year 2008
was primarily due a decrease in workers' compensation expense due to a continued reduction in the frequency and severity of injury claims from
our successful salon safety programs. Partially offsetting the increase was impairment losses on the disposal of property and equipment
stemming from salon closures. In July 2008 (fiscal year 2009), we approved a plan to close up to 112 underperforming company-owned salon
locations in fiscal year 2009 prior to the lease end date in order to enhance overall profitability, which resulted in impairment charges of
$6.1 million.
The basis point improvement in North American salon operating income as a percent of North American salon revenues during fiscal year
2007 was due to improved product margins and a reduction in workers' compensation expense as a result of the continued improvement of our
safety and return-to-work programs over the recent years, as well as changes in state laws and rent expense increasing at a faster rate than salon
same-store sales.
International Salons
International Salon Revenues. Total international salon revenues were as follows:
55
Increase (Decrease) Over
Prior Fiscal Year
Same-
Store
Sales
(Decrease)
Years Ended June 30, Revenues Dollar
Percentage
(Dollars in thousands)
2009
$
171,569
$
(84,494
)
(33.0
)%
(7.2
)%
2008
256,063
2,633
1.0
(4.3
)
2007
253,430
32,768
14.8
(0.6
)