Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Nov. 13, 2020 | Mar. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Sally Beauty Holdings, Inc. | ||
Entity Central Index Key | 0001368458 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2020 | ||
Trading Symbol | SBH | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 901,906,000 | ||
Entity Common Stock, Shares Outstanding | 112,818,922 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Security Exchange Name | NYSE | ||
Title of 12(b) Security | Common Stock, par value $.01 per share | ||
Entity Interactive Data Current | Yes | ||
Entity File Number | 1-33145 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-2257936 | ||
Entity Address, Address Line One | 3001 Colorado Boulevard | ||
Entity Address, City or Town | Denton | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 76210 | ||
City Area Code | 940 | ||
Local Phone Number | 898-7500 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 514,151 | $ 71,495 |
Trade accounts receivable, net | 35,590 | 43,136 |
Accounts receivable, other | 20,839 | 61,403 |
Inventory | 814,503 | 952,907 |
Other current assets | 48,014 | 34,612 |
Total current assets | 1,433,097 | 1,163,553 |
Property and equipment, net | 315,029 | 319,628 |
Operating lease assets | 525,634 | |
Goodwill | 540,038 | 530,786 |
Intangible assets, excluding goodwill, net | 58,283 | 62,051 |
Other assets | 23,066 | 22,428 |
Total assets | 2,895,147 | 2,098,446 |
Current liabilities: | ||
Current maturities of long-term debt | 180 | 1 |
Accounts payable | 236,333 | 278,688 |
Accrued liabilities | 170,665 | 169,054 |
Current operating lease liabilities | 153,267 | |
Income taxes payable | 2,917 | 8,336 |
Total current liabilities | 563,362 | 456,079 |
Long-term debt | 1,796,897 | 1,594,542 |
Long-term operating lease liabilities | 394,375 | |
Other liabilities | 32,976 | 27,757 |
Deferred income tax liabilities, net | 92,094 | 80,391 |
Total liabilities | 2,879,704 | 2,158,769 |
Stockholders’ equity (deficit): | ||
Common stock, $0.01 par value. Authorized 500,000 shares; 112,824 and 116,986 shares issued and 112,404 and 116,725 shares outstanding at September 30, 2020 and 2019, respectively | 1,124 | 1,167 |
Preferred stock, $0.01 par value. Authorized 50,000 shares; none issued | ||
Additional paid-in capital | 1,913 | |
Accumulated earnings | 117,109 | 55,797 |
Accumulated other comprehensive loss, net of tax | (104,703) | (117,287) |
Total stockholders’ equity (deficit) | 15,443 | (60,323) |
Total liabilities and stockholders’ equity (deficit) | $ 2,895,147 | $ 2,098,446 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Sep. 30, 2019 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 500,000,000 | 500,000,000 |
Common stock, shares issued | 112,824,000 | 116,986,000 |
Common stock, shares outstanding | 112,404,000 | 116,725,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 3,514,330 | $ 3,876,411 | $ 3,932,565 |
Cost of goods sold | 1,798,736 | 1,965,869 | 1,988,152 |
Gross profit | 1,715,594 | 1,910,542 | 1,944,413 |
Selling, general and administrative expenses | 1,442,809 | 1,452,751 | 1,484,209 |
Restructuring | 14,025 | (682) | 33,615 |
Operating earnings | 258,760 | 458,473 | 426,589 |
Interest expense | 98,793 | 96,309 | 98,162 |
Earnings before provision for income taxes | 159,967 | 362,164 | 328,427 |
Provision for income taxes | 46,722 | 90,541 | 70,380 |
Net earnings | $ 113,245 | $ 271,623 | $ 258,047 |
Earnings per share: | |||
Basic | $ 0.99 | $ 2.27 | $ 2.09 |
Diluted | $ 0.99 | $ 2.26 | $ 2.08 |
Weighted average shares: | |||
Basic | 113,881 | 119,636 | 123,190 |
Diluted | 114,680 | 120,283 | 123,832 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net earnings | $ 113,245 | $ 271,623 | $ 258,047 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 11,821 | (22,576) | (10,604) |
Interest rate caps, net of tax | 198 | (4,566) | 2,449 |
Foreign exchange contracts, net of tax | 565 | (154) | |
Other comprehensive income (loss), net of tax | 12,584 | (27,296) | (8,155) |
Total comprehensive income | $ 125,829 | $ 244,327 | $ 249,892 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities: | |||
Net earnings | $ 113,245 | $ 271,623 | $ 258,047 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 106,779 | 107,658 | 108,829 |
Share-based compensation expense | 8,426 | 9,180 | 10,519 |
Amortization of deferred financing costs | 4,118 | 3,786 | 3,832 |
Net loss/(gain) on disposal and impairment of assets | 3,562 | (7,544) | 181 |
Net loss on extinguishment of debt | 38 | 951 | 876 |
Deferred income taxes | 13,691 | 5,532 | (20,538) |
Changes in (exclusive of effects of acquisitions): | |||
Trade accounts receivable | 10,031 | 4,399 | (1,949) |
Accounts receivable, other | 41,463 | (20,432) | 2,743 |
Inventory | 149,845 | (20,272) | (16,450) |
Other current assets | (15,654) | 7,418 | 12,164 |
Other assets | (2,007) | (3,225) | 48 |
Accounts payable and accrued liabilities | (26,876) | (42,719) | 4,592 |
Income taxes payable | (5,489) | 6,144 | (221) |
Operating lease assets and liabilities | 10,339 | ||
Other liabilities | 15,378 | (2,084) | 9,988 |
Net cash provided by operating activities | 426,889 | 320,415 | 372,661 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment | (110,858) | (107,755) | (86,507) |
Proceeds from sales of property and equipment | 53 | 15,312 | 369 |
Acquisitions, net of cash acquired | (12,970) | (3,424) | (9,175) |
Net cash used by investing activities | (123,775) | (95,867) | (95,313) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 1,087,504 | 593,504 | 461,819 |
Repayments of long-term debt | (882,921) | (777,538) | (558,599) |
Debt issuance costs | (6,257) | (1,151) | |
Payments for common stock repurchased | (61,357) | (47,434) | (166,701) |
Proceeds from exercises of stock options | 2,792 | 2,160 | 1,350 |
Net cash provided (used) by financing activities | 139,761 | (229,308) | (263,282) |
Effect of foreign exchange rate changes on cash and cash equivalents | (219) | (1,040) | (530) |
Net increase (decrease) in cash and cash equivalents | 442,656 | (5,800) | 13,536 |
Cash and cash equivalents, beginning of period | 71,495 | 77,295 | 63,759 |
Cash and cash equivalents, end of period | 514,151 | 71,495 | 77,295 |
Supplemental Cash Flow Information: | |||
Interest paid | 83,123 | 95,171 | 90,077 |
Income taxes paid | 49,869 | 83,783 | 70,253 |
Capital expenditures incurred but not paid | $ 9,772 | $ 26,233 | $ 15,315 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect Period of Adoption Adjustment | Common Stock | Common StockCumulative Effect Period of Adoption Adjustment | Additional Paid-in Capital | Additional Paid-in CapitalCumulative Effect Period of Adoption Adjustment | Accumulated Earnings (Deficit) | Accumulated Earnings (Deficit)Cumulative Effect Period of Adoption Adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect Period of Adoption Adjustment |
Balance at Sep. 30, 2017 | $ (363,616) | $ 1,296 | $ (283,076) | $ (81,836) | ||||||
Balance (in shares) at Sep. 30, 2017 | 129,585 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 258,047 | 258,047 | ||||||||
Other comprehensive income (loss), net of tax | (8,155) | (8,155) | ||||||||
Repurchases of common stock | $ (166,701) | $ (100) | $ (11,866) | (154,735) | ||||||
Repurchases of common stock (in shares) | (9,987) | (9,987) | ||||||||
Share-based compensation | $ 10,519 | $ 2 | 10,517 | |||||||
Share-based compensation (in shares) | 178 | |||||||||
Stock issued for stock options | 1,350 | $ 1 | 1,349 | |||||||
Stock issued for stock options (in shares) | 150 | |||||||||
Balance at Sep. 30, 2018 | (268,556) | $ 1,199 | (179,764) | (89,991) | ||||||
Balance (in shares) at Sep. 30, 2018 | 119,926 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 271,623 | 271,623 | ||||||||
Other comprehensive income (loss), net of tax | (27,296) | (27,296) | ||||||||
Repurchases of common stock | $ (47,434) | $ (36) | (11,336) | (36,062) | ||||||
Repurchases of common stock (in shares) | (3,562) | (3,562) | ||||||||
Share-based compensation | $ 9,180 | $ 2 | 9,178 | |||||||
Share-based compensation (in shares) | 209 | |||||||||
Stock issued for stock options | 2,160 | $ 2 | 2,158 | |||||||
Stock issued for stock options (in shares) | 152 | |||||||||
Balance at Sep. 30, 2019 | $ (60,323) | $ 76 | $ 1,167 | 55,797 | $ 76 | (117,287) | ||||
Balance (in shares) at Sep. 30, 2019 | 116,725 | 116,725 | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602Member | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | $ 113,245 | 113,245 | ||||||||
Other comprehensive income (loss), net of tax | 12,584 | 12,584 | ||||||||
Repurchases of common stock | $ (61,357) | $ (46) | (9,302) | (52,009) | ||||||
Repurchases of common stock (in shares) | (4,702) | (4,702) | ||||||||
Share-based compensation | $ 8,426 | $ 1 | 8,425 | |||||||
Share-based compensation (in shares) | 159 | |||||||||
Stock issued for stock options | 2,792 | $ 2 | 2,790 | |||||||
Stock issued for stock options (in shares) | 223 | |||||||||
Balance at Sep. 30, 2020 | $ 15,443 | $ 1,124 | $ 1,913 | $ 117,109 | $ (104,703) | |||||
Balance (in shares) at Sep. 30, 2020 | 112,404 | 112,405 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. The consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. The preparation of financial statements in conformity with GAAP requires us to interpret and apply accounting standards and to develop and follow accounting policies consistent with such standards. The following is a summary of the significant accounting policies used in preparing our consolidated financial statements. Use of Estimates In accordance with GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent liabilities in the consolidated financial statements. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. Cash and Cash Equivalents Cash represents currency on hand, debit and credit card receivable and third-party online payment systems transactions, while cash equivalents consist of highly liquid investments which have an original maturity of three months or less. Trade Accounts Receivable and Accounts Receivable, Other Trade accounts receivable consist of credit extended directly to certain customers who meet our credit requirements in the ordinary course of business and are stated at their carrying values, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is regularly reviewed on the basis of our historical collection data and current customer information. Customer account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At September 30, 2020 and 2019, our allowance for doubtful accounts was $1.9 million and $1.7 million, respectively. Other accounts receivable consist primarily of amounts due from vendors under various contractual agreements and include volume rebates and other promotional considerations. Inventory and Cost of Goods Sold Effective August 1, 2020, we changed how we value our inventory. See Note 3 for more information related to the change in our costing method. At September 30, 2020, inventory is stated at the lower of weighted average cost or net realizable value. At September 30, 2019, inventory is stated at the lower of cost using FIFO or net realizable value. Inventory cost reflects actual product costs, the cost of transportation to our distribution centers and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. When assessing the net realizable value of inventory, we consider several factors including estimates of future demand for our products, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in stock keeping units. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. We have policies and processes in place that are intended to minimize inventory shrinkage. Cost of goods sold includes actual product costs, the cost of transportation to our distribution centers, operating cost associated with our distribution centers (including employee compensation expense, depreciation and amortization, rent and other occupancy-related expenses), vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores. All other shipping and handling costs are included in se lling, general and administrative expenses when incurred. We deem cash consideration received from a supplier to be a reduction of the cost of inventory purchased, unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by us in selling the vendor’s products. The majority of cash consideration we receive is considered to be a reduction of inventory and a subsequent reduction in cost of goods sold as the related products are sold. Lease Accounting Substantially all of our leases are operating leases and relate primarily to retail stores and warehousing properties with lease terms of five to ten years. Some of our leases include options to extend the agreement by a certain number of years, typically five years. At the lease commencement date, an operating lease liability and related operating lease asset are recognized and typically do not assume renewals unless we are reasonably certain that we will exercise the option. The operating lease liabilities are calculated using the present value of lease payments. The discount rate used is either the rate implicit in the lease, when known, or our estimated incremental borrowing rate. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because we do not generally borrow on a collateralized basis, we derive an appropriate incremental borrowing rate using the interest rate we pay on our non-collateralized borrowings, adjusted for the amount of the lease payments, the lease term and the effect of designating specific collateral with a value equal to the unpaid lease payments for that lease. We apply the incremental borrowing rate on a portfolio basis given the impact of applying it on a lease by lease basis would be immaterial. Operating lease assets are valued based on the initial operating lease liabilities plus any prepaid rent and direct costs from executing the leases, reduced by tenant improvement allowances and any rent abatement. Operating lease assets are tested for impairment in the same manner as our long-lived assets. During fiscal year 2020, we impaired approximately $1.9 million in operating lease assets and leasehold improvements, primarily as a result of the impact of COVID-19, within selling, general and administrative expenses. See Note 19 for additional information related to impairments in connection with our restructuring activity. See Note 3 for additional information regarding the accounting change in connection with the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated or amortized over the lesser of the estimated useful lives of the assets or the term of the related lease, including renewals considered reasonably assured. Expenditures for maintenance and repairs are included in selling, general and administrative expenses when incurred, while expenditures for major renewals and improvements that substantially extend the useful life of an asset are capitalized. The following table summarizes our property and equipment balances and their estimated useful lives (dollars in thousands): Life September 30, (in years) 2020 2019 Land N/A $ 10,120 $ 10,061 Buildings and building improvements 5 – 54,521 53,132 Leasehold improvements 2 – 10 304,404 281,195 Furniture, fixtures and equipment 2 – 10 640,693 634,525 Total property and equipment, gross 1,009,738 978,913 Accumulated depreciation and amortization (694,709 ) (659,285 ) Total property and equipment, net $ 315,029 $ 319,628 Depreciation expense for the fiscal years 2020, 2019 and 2018 was $95.5 million, $96.1 million and $97.2 million, respectively, and is included in selling, general and administrative expenses in our consolidated statements of earnings. Valuation of Long-Lived Assets and Definite-lived Intangible Assets Long-lived assets and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The recoverability of long-lived assets and intangible assets subject to amortization is assessed by comparing the net carrying amount of each asset to the total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. Goodwill and Indefinite-lived Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. G st Components within the same operating segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. As of September 30, 2020 and 2019, our reporting units consisted of Sally Beauty Supply (“SBS”) and Beauty Systems Group (“BSG”). We assign goodwill to the reporting unit which consolidates the acquisition. When assessing goodwill for impairment, we perform a quantitative assessment to compare the fair value of each reporting unit to its carrying value, including goodwill. Fair value is measured based on the discounted cash flow method. Based on our assessments, the fair value of each reporting unit exceeded its carrying value, and accordingly, we have not recorded any impairment charges related to goodwill in the current or prior fiscal years presented. Indefinite-lived Intangible Assets Our intangible assets with indefinite lives consist of trade names acquired in business combinations st whenever events or changes in circumstances indicate that the asset’s carrying amount may be less than its recoverable amount, to determine whether or not it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. Like goodwill, as a result of COVID-19, we performed an interim assessment for these assets as of March 31, 2020, which updated our assumptions around the growth, timing, and discount rate applied to future cash flows in connection with our business restart. When assessing intangible assets with indefinite lives for impairment, we compare the fair value of each asset against its carrying value. Fair value is based on the relief from royalty method. Based Self-Insurance Programs We self-insure the risks related to workers’ compensation, general and auto liability, property and certain employee-related healthcare benefits. We have obtained third-party excess insurance coverage to limit our exposure per occurrence and aggregate cash outlay. We record an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date, which includes claims filed and estimated losses incurred but not yet reported. We estimate the ultimate cost based on an analysis of our historical data and actuarial estimates. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. The current and long-term portions of these liabilities are recorded at their present value and included in accrued liabilities and other liabilities in our consolidated balance sheets, respectively. Revenue Recognition Substantially all of our revenue is derived through the sale of merchandise. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data. Additionally, we have assessed all revenue streams for principal versus agent considerations and have concluded we are the principal for all transactions. See Note 17 for additional information regarding the disaggregation of our sales revenue. Merchandise Revenues The majority of our revenue comes from the sale of products in our company-operated stores. These sales generally have one single performance obligation and the revenue is recognized at the point of sale. However, discounts and incentives issued at the point of sale to entice a customer to a future purchase are treated as a separate performance obligation. As such, we allocate a portion of the revenue generated from the point of sale to each of the additional performance obligations separately using explicitly stated amounts or our best estimate using historical data. We also sell merchandise on our online platforms, to our franchisees and by using distributor sales consultants. These sales generally have one single performance obligation and revenue is recognized upon the shipment of the merchandise. Any shipping and handling fees charged to the customer are recognized as revenue, while any shipping and handling costs to get the merchandise shipped is recognized in cost of goods sold. We extend credit to certain customers, primarily salon professionals, which generally have 30 day payment terms. Based on the nature of theses receivables, no significant financing component exists. Gift Cards The revenue from the sale of our gift cards is recognized at the time the gift card is used to purchase merchandise, which is generally within one year from the date of purchase. Our gift cards do not carry expiration dates or impose post-sale fees. Based on historical experience, a certain amount of our gift cards will not be redeemed, also referred to as “gift card breakage.” We recognize revenue related to gift card breakage within revenue in our consolidated statements of earnings over time proportionately to historical redemption patterns. The gift cards are issued and represent liabilities of either of our operating entities, Sally Beauty Supply LLC or Beauty Systems Group LLC, which are both limited liability companies formed in the state of Virginia. Private Label Rewards Credit Card In September 2019, we signed a multi-year agreement with a third-party bank (the “Bank”) to launch a private label rewards credit card. Under the agreement, the Bank will manage and extend credit to our SBS and BSG customers and we will provide licensing to our brand, marketing services and facilitate credit applications. The Bank will be the sole owner of the private label rewards credit card accounts and takes on the risk of default by the private label rewards card holders. In connection with signing the agreement, we received a refundable payment from the Bank that we recorded as deferred revenue within other liabilities on our consolidated balance sheets and will recognize on a straight-line basis over the initial term of the agreement into net sales in our consolidated statements of earnings. Pursuant to the agreement, the Bank will reimburse us for certain expenses we incur for the launch and marketing of the Program. Amounts reimbursed are recognized in net sales in our consolidated statements of earnings. In addition, we can earn other amoun ts from the Bank, including incentive payments for achieving performance targets and the activation of credit cards. During the fiscal year ended September 30, 2020, we commenced operations and started to roll out our first SBS and BSG branded credit cards . Customer Loyalty Rewards Our Sally Beauty Rewards Loyalty Program in the U.S. and Canada, enables customers to earn points based on their status for every dollar spent on merchandise purchased in our SBS stores and through our sallybeauty.com sallybeauty.com The following table shows the amount of contract liabilities on our consolidated balance sheets as of September 30, 2020 and 2019 (in thousands): September 30, Contracts Balance Sheet Classification 2020 2019 Gift cards Accrued liabilities $ 5,066 $ 4,558 Rewards loyalty program Accrued liabilities 8,881 8,308 Total liability $ 13,947 $ 12,866 Changes to our contract liabilities for fiscal year 2020 were as follows (in thousands): September 30, 2019 $ 12,866 Loyalty points and gift cards issued but not redeemed, net of estimated breakage 10,198 Revenue recognized from beginning liability (9,117 ) September 30, 2020 $ 13,947 Advertising Costs Advertising costs relate mainly to print advertisements, digital marketing, trade shows and product education for salon professionals. Advertising costs incurred in connection with print advertisements are expensed the first time the advertisement is run. Other advertising costs are expensed when incurred. Advertising costs were $72.7 million, $73.3 million and $83.4 million for the fiscal years 2020, 2019 and 2018, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. Share-based Compensation We measure the cost of services received from our employees and directors in exchange for an award of equity instruments based on the fair value of the award on the date of grant which are expensed ratably over the vesting period. We recognize the impact of forfeitures as they occur. Share-based compensation expense is included in selling, general and administrative expenses in our consolidated statements of earnings. Income Taxes We recognize deferred income taxes for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are anticipated to be recovered or settled. The effect on deferred taxes of a change in income tax rates is recognized in the consolidated statements of earnings in the period of enactment. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that such assets will be realized in full. The estimated tax benefit of an uncertain tax position is recorded in our consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax position will withstand challenge, if any, from applicable taxing authorities. Foreign Currency The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. Foreign currency transaction gains or losses, including changes in the fair value (i.e., marked-to-market adjustments) of certain foreign exchange contracts we hold, are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and were not significant in any of the periods presented in the accompanying consolidated financial statements. |
Accounting Changes and Recent A
Accounting Changes and Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2020 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes and Recent Accounting Pronouncements | 3. Accounting Changes In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02 which requires most leases to be reported on the balance sheet as a right-of-use asset and a lease liability. On October 1, 2019, we adopted ASU No. 2016-02 using a modified retrospective transition method without restating comparative periods. We have elected the package of practical expedients permitted within the transition guidance under the new standard relating to the identification, classification and initial direct costs of leases commencing before the effective date of Topic 842. In addition, we have elected to not recognize a right-of-use asset or lease obligation for short-term leases with an initial term of 12 months or less. The adoption of ASU No. 2016-02, as amended, resulted in the recognition of an operating lease asset of $513.9 million and an operating lease liability of $523.5 million. Existing straight-line rent liability, prepaid rent and accrued rent were reclassified from certain other assets and liabilities into the operating lease asset. Furthermore, the cumulative effect of the adoption of ASU No. 2016-02 resulted in a $0.1 million adjustment to accumulated earnings resulting from the impairment of certain operating lease assets as well certain deferred tax balances that were written off as a result of the adoption of the new standard. The impact on our consolidated results of operations or consolidated cash flows was not material. See Note 8 for additional information in connection with ASU No. 2016-02. Effective August 1, 2020, we changed our method of accounting for inventory located in the U.S. and Canada at both our distribution centers and store fronts. Prior to August 2020, we valued inventory at the lower of cost or net realizable value on a FIFO basis. Effective August 1, 2020, all company-wide inventories have been valued at the lower of cost or net realizable value using the weighted average cost method. These changes were made in connection with the implementation of a new perpetual inventory system, which provides us with better information to manage inventory. We believe the weighted average cost method is preferable to the FIFO cost method because it results in greater precision in the determination of cost of goods sold and inventories at the SKU level and results in a consistent inventory valuation method for all of the Company’s inventories. We recorded the cumulative effect of this change in accounting principle as of August 1, 2020. The effects of this change in accounting principle as of August 1, 2020 were not material to our consolidated financial statements. Prior to implementation of the new perpetual inventory system, we were not able to determine the impact of the change to the weighted average cost method. Therefore, we did not retroactively apply the change to prior periods. Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes Income Taxes prospective basis, retrospective basis, and a modified retrospective basis dependent on the specific change. We are currently evaluating the impact of this update. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Our financial instruments consist of cash equivalents, trade and other accounts receivable, accounts payable, derivative instruments, including foreign exchange contracts and interest rate caps, and debt. The carrying amounts of cash equivalents, trade and other accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. We measure on a recurring basis and disclose the fair value of our financial instruments under the provisions of ASC Topic 820, Fair Value Measurement Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data; and Level 3 - Unobservable inputs for the asset or liability. Fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follows (in thousands): As of September 30, Classification Pricing Category 2020 2019 Financial Assets Cash equivalents Cash and cash equivalents Level 1 $ 194,612 $ — Interest rate caps Other assets Level 2 27 344 Total assets $ 194,639 $ 344 Financial Liabilities None Cash equivalents, at September 30, 2020, consist of highly liquid investments which mature daily and are valued using unadjusted quoted market prices for such securities. The fair value for interest rate caps were measured using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Other fair value disclosures Carrying amounts and the related estimated fair value of our long-term debt, excluding capital lease obligations, are as follows: As of September 30, 2020 2019 Pricing Category Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 1,177,380 1,217,707 $ 885,296 $ 898,814 Other long-term debt Level 2 635,788 619,397 724,000 709,830 Total debt $ 1,813,168 $ 1,837,104 $ 1,609,296 $ 1,608,644 The fair value of the senior notes was measured using unadjusted quoted market prices. The fair value of other long-term debt was measured using quoted market prices for similar debt securities in active markets or widely accepted valuation techniques, such as discounted cash flow analyses, using observable inputs, such as market interest rates. |
Accumulated Stockholders' Equit
Accumulated Stockholders' Equity (Deficit) | 12 Months Ended |
Sep. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Accumulated Stockholders' Equity (Deficit) | 5. Accumulated Stockholders’ Equity (D Share Repurchases In August 2017, our Board of Directors approved a share repurchase program authorizing us to repurchase up to $1.0 billion of our common stock over an approximate four-year Information related to our shares repurchased and subsequently retired were as follows (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Number of shares repurchased 4,702 3,562 9,987 Total cost of share repurchased $ 61,357 $ 46,621 $ 165,902 The amounts above do not include approximately 159,000, 209,000 and 177,595 shares surrendered by grantees to satisfy personal income tax withholdings obligations upon vesting of equity-based awards valued at approximately $0.3 million, $0.8 million and $0.8 million during the fiscal years 2020, 2019 and 2018, respectively. We reduced common stock and additional paid-in capital, in the aggregate, by these amounts. However, as required by GAAP, to the extent that share repurchase amounts exceeded the balance of additional paid-in capital prior to such repurchases, we recorded the excess in accumulated stockholders’ equity (deficit) on our consolidated balance sheets. We funded these share repurchases with cash from operations and borrowings under the ABL facility, as appropriate. Accumulated other Comprehensive Loss The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Foreign Exchange Contracts Total Balance at September 30, 2018 $ (91,356 ) $ 1,365 $ — $ (89,991 ) Other comprehensive loss before reclassifications, net of tax (22,576 ) (6,167 ) (869 ) (29,612 ) Reclassification to net earnings, net of tax - 1,601 715 2,316 Balance at September 30, 2019 (113,932 ) (3,201 ) (154 ) (117,287 ) Other comprehensive income (loss) before reclassifications, net of tax 11,821 (411 ) (531 ) 10,879 Reclassification to net earnings, net of tax — 609 1,096 1,705 Balance at September 30, 2020 $ (102,111 ) $ (3,003 ) $ 411 $ (104,703 ) The tax impact for the changes in other comprehensive loss and the reclassifications to net earnings was not material. |
Weighted-Average Shares
Weighted-Average Shares | 12 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Weighted-Average Shares | 6. Weighted Average Shares The following table sets forth the computations of basic and diluted earnings per share (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Weighted-average basic shares 113,881 119,636 123,190 Dilutive securities: Stock option and stock award programs 799 647 642 Weighted-average diluted shares 114,680 120,283 123,832 At September 30, 2020, 2019 and 2018, options to purchase approximately 4.7 million, 4.7 million and 5.2 million shares, respectively, of our common stock were outstanding but not included in the computation of diluted earnings per share, because these options were anti-dilutive. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Payments | 7. Our Sally Beauty Holdings, Inc. 2019 Omnibus Incentive Plan and the 2010 Omnibus Incentive Plan as amended (the "Omnibus Plans") allows us to grant performance-based awards and service-based awards to its employees up to 8.0 million shares of our common stock, plus an additional number of shares based on the number of shares outstanding as of the beginning of the current plan that have subsequently been terminated, expired unexercised, cash-settled, cancelled, forfeited or lapsed for any reason. Currently, we have awarded grants to employees and non-employee directors under the terms of the Omnibus Plans. The following table presents total compensation cost for all share-based compensation arrangements, and the related income tax benefits recognized in our consolidated statement of earnings (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Share-based compensation expense $ 8,426 $ 9,180 $ 10,519 Income tax benefit related to share-based compensation expense $ 2,059 $ 2,357 $ 3,013 The Omnibus Plan award types are as follows: Performance awards: Performance awards vest on the satisfaction of the employee service condition and our level of achievement with respect to certain specified cumulative performance targets, including sales growth and return on invested capital, during the three-year 0% 200% Stock options: Stock option awards are valued using the Black-Scholes option pricing model to estimate the fair value of each stock option award on the date of grant and expense ratably over the vesting period, generally three years. Stock options have a ten year life. Restricted Stock: Restricted stock awards (“RSA”) and restricted stock units (“RSU”) are valued using the closing market price of our common stock on the date of grant. Expense is recognized ratably over the vesting period, generally three years for RSAs and one year for RSUs. An RSA award is an award of our shares that have full voting rights and dividend rights, but are restricted with regard to sale or transfer. These restrictions lapse over the vesting period. RSUs are awarded to our independent directors who may elect, upon receipt of such award, to defer until a later date delivery of the shares of our common stock that would otherwise be issued on the vesting date. RSUs granted prior to the fiscal year 2012, are generally retained by the Company as deferred stock units that are not distributed until six months after the independent director’s service as a director terminates. Performance-Based Awards The following table presents a summary of the activity for our performance awards assuming 100% payout: Performance Awards Number of Shares (in Weighted Average Fair Value Per Share Unvested at September 30, 2019 411 $ 18.83 Granted 259 16.65 Vested — — Forfeited (128 ) 21.91 Unvested at September 30, 2020 542 $ 17.06 As of September 30, 2020, as a result of the economic impacts of COVID-19, it was not probable that any of the performance targets for the unvested awards would be met. As such, we reversed out approximately $1.7 million of expense previously recorded in prior fiscal years related to these unvested awards. Service-Based Awards Stock Option Awards The following table presents a summary of the activity for our stock option awards: Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 4,902 $ 22.08 5.8 $ 670 Granted 1,027 16.65 Exercised (205 ) 14.53 Forfeited or expired (986 ) 23.58 Outstanding at September 30, 2020 4,738 $ 20.92 6.2 $ - Exercisable at September 30, 2020 3,509 $ 22.32 5.3 $ - The weighted average assumptions used in the Black-Scholes model relating to the valuation of our stock options are as follows: Fiscal Year Ended September 30, 2020 2019 2018 Expected life (in years) 5.0 5.0 5.0 Expected volatility for the Company’s common stock 35.8 % 30.5 % 27.4 % Risk-free interest rate 1.7 % 3.0 % 2.1 % Dividend yield 0.0 % 0.0 % 0.0 % The expected life of options awarded represents the period of time that such options are expected to be outstanding and is based on our historical experience. The risk-free interest rate is based on the zero-coupon U.S. Treasury notes with a term comparable to the expected life of an award at the date of the grant. Since we do not currently expect to pay dividends, the dividend yield used for this purpose is 0% The weighted average fair value per share at the date of grant of the stock options awarded during the fiscal years 2020, 2019 and 2018 was $5.66, $5.86 and $4.84, respectively. The aggregate fair value of stock options that vested during the fiscal years 2020, 2019 and 2018 was $2.7 million, $5.1 million and $7.7 million, respectively. The aggregate intrinsic value of options exercised during the fiscal years 2020, 2019 and 2018 was $0.5 million, $0.9 million and $1.3 million, respectively. The total cash received during the fiscal years 2020, 2019 and 2018 from these option exercises was $3.0 million, $2.2 million and $1.4 million, respectively, and the tax benefit realized for the tax deductions from these option exercises was $0.1 million, $0.2 million and $0.3 million, respectively. At September 30, 2020, approximately $4.9 million of total unrecognized compensation costs related to unvested stock option awards are expected to be recognized over the weighted average period of 1.8 years. RSAs The following table presents a summary of the activity for our RSAs: Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2019 262 $ 17.53 Granted 357 16.05 Vested (149 ) 17.51 Forfeited (51 ) 17.18 Unvested at September 30, 2020 419 $ 16.32 At September 30, 2020, approximately $4.6 million of total unrecognized compensation costs related to unvested RSAs are expected to be recognized over the weighted average period of 1.8 years. RSUs The following table presents a summary of the activity for our RSUs: Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2019 — $ — Granted 108 16.49 Vested — — Forfeited (17 ) 16.65 Unvested at September 30, 2020 91 $ 16.47 At September 30, 2020, approximately $0.2 of total unrecognized compensation costs related to unvested RSUs are expected to be recognized over the weighted average period of |
Leases
Leases | 12 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | 8. Leases Our operating and finance leases consisted of the following (in thousands): Balance Sheet Classification September 30, 2020 Assets: Operating lease Operating lease assets $ 525,634 Finance lease Property and equipment, net 2,888 Total lease assets $ 528,522 Liabilities: Current: Operating lease Current operating lease liabilities $ 153,267 Finance lease Current maturities of long-term debt 180 Long-term: Operating lease Long-term operating lease liabilities 394,375 Finance lease Long-term debt 684 Total lease liabilities $ 548,506 Our lease costs, net of immaterial sublease income, consisted of the following (in thousands): Statement of Earnings (Loss) Classification Fiscal Year Ended September 30, 2020 Operating lease costs (a) Cost of goods sold and selling, general and administrative expenses (b) $ 192,484 Finance lease costs: Amortization of leased assets Selling, general and administrative expenses 303 Interest on lease liabilities Interest expense 36 Variable lease costs (c) Selling, general and administrative expenses 45,191 Total lease costs $ 238,014 (a) Includes costs related to short-term leases, which are immaterial. (b) Certain supply chain-related amounts are included in cost of goods sold. (c) Includes common area maintenance, real estate taxes and insurance related to leases. In response to COVID-19, the FASB issued interpretive guidance that provides an option for entities to make a policy election for lease concessions as a result of COVID-19, provided that the modified contracts result in total cash flows that are substantially the same or less than the original contracts. This policy election allows for lease concessions to be treated as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contracts). We have elected to apply this policy election and have included rent abatements related to COVID-19 into variable lease costs. For the year ended September 30, 2020, we have recognized a benefit of $11.7 million for rent abatements. As of September 30, 2020, the approximate future lease payments under our leases under ASC 842, Leases Fiscal Year Operating leases Finance leases 2021 $ 170,522 $ 193 2022 131,701 192 2023 95,956 192 2024 66,164 192 2025 42,216 160 Thereafter 95,944 — Total undiscounted lease payments 602,503 929 Less: imputed interest 54,861 65 Present value of lease liabilities $ 547,642 $ 864 The table above does not include operating leases we have entered into of approximately $11.1 million that have not commenced, primarily related to future retail stores. As of September 30, 2019, our future minimum lease payments under non-cancelable operating leases as reported under the previous accounting standard, ASC 840, Leases Fiscal Year 2020 $ 174,578 2021 136,900 2022 95,918 2023 61,944 2024 33,803 Thereafter 40,545 $ 543,688 Other lease information is as follows (dollars in thousands): Fiscal Year Ended September 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows – operating leases $ 183,808 Operating cash flows – finance leases 36 Financing cash flows – finance leases 34 Supplemental non-cash information on lease liabilities: Lease assets obtained in exchange for new operating lease liabilities $ 204,245 Lease assets obtained in exchange for new finance lease liabilities 4 September 30, 2020 Weighted-average remaining lease term (in years): Operating leases 5.1 Finance leases 3.8 Weighted-average discount rate: Operating leases 4.4 % Finance leases 0.3 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 9. The changes in the carrying amounts of goodwill during the fiscal years 2020 and 2019 are as follows (in thousands): SBS BSG Total Balance at September 30, 2018 $ 81,217 $ 454,708 $ 535,925 Acquisitions 284 — 284 Foreign currency translation (4,596 ) (827 ) (5,423 ) Balance at September 30, 2019 $ 76,905 $ 453,881 $ 530,786 Acquisitions — 5,342 5,342 Foreign currency translation 4,281 (371 ) 3,910 Balance at September 30, 2020 $ 81,186 $ 458,852 $ 540,038 The following table reflects our other intangible assets, excluding goodwill, on our consolidated balance sheets. Once an intangible becomes fully amortized, the original cost and accumulated amortization is removed in the subsequent period. In the table b elow, prior year amounts for definite-lived intangible assets have been conformed to the current year’s presentation. As of September 30, 2020 and 2019 , we had the following (in thousands): September 30, 2020 September 30, 2019 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Definite-lived Intangible assets: Customer relationships $ 47,787 $ (38,876 ) $ 8,911 $ 43,752 $ (33,192 ) $ 10,560 Distribution rights 24,509 (21,570 ) 2,939 33,364 (27,477 ) 5,887 Other intangible assets 5,300 (3,045 ) 2,255 6,457 (3,946 ) 2,511 Total definite-lived intangible assets 77,596 (63,491 ) 14,105 83,573 (64,615 ) 18,958 Indefinite-lived Intangible assets: Trade names 44,178 — 44,178 43,093 — 43,093 Total intangible assets, excluding goodwill, net $ 121,774 $ (63,491 ) $ 58,283 $ 126,666 $ (64,615 ) $ 62,051 Our definite-lived intangible assets are amortized on a straight-line basis over the period that we expected an economic benefit, typically over periods of three to ten years. For the fiscal years ended September 30, 2020, 2019 and 2018, amortization expense related to intangible assets totaled $9.0 million, $11.3 million and $11.7 million, respectively. As of September 30, 2020, the expected future amortization expense related to definite-lived intangible assets is as follows (in thousands): Fiscal Year: 2021 $ 5,820 2022 3,432 2023 2,241 2024 1,303 2025 839 Thereafter 470 $ 14,105 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 10. Accrued liabilities consist of the following (in thousands): September 30, 2020 2019 Compensation and benefits $ 54,749 $ 63,005 Interest payable 29,048 17,951 Deferred revenue 16,728 18,165 Rental obligations 8,964 11,670 Insurance reserves 4,796 4,567 Property and other taxes 4,109 3,869 Operating accruals and other 52,271 49,827 Total accrued liabilities $ 170,665 $ 169,054 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments Letters of Credit We had $18.6 million and $18.0 million of outstanding letters of credit as of September 30, 2020 and 2019, respectively. Contingencies Legal Proceedings The Company is, from time to time, involved in various claims and lawsuits incidental to the conduct of its business in the ordinary course. We do not believe that the ultimate resolution of these matters will have a material adverse impact on our consolidated financial position, results of operations or cash flows. Data Security Incidents As previously disclosed, we experienced data security incidents in prior years that involved the unauthorized installation of malicious software (“malware”) on our information technology systems, including our point-of-sale systems that may have placed at risk certain payment card data for some transactions. We received an assessment from another payment card network during fiscal year 2018 in connection with the data security incidents and recognized $7.9 million of expenses. The assessment was based on the network’s claims against our acquiring banks for costs that it asserts its issuing banks incurred in connection with the data security incidents, including incremental counterfeit fraud losses and non-ordinary course operating expenses, such as card reissuance costs. As of September 30, 2019, we had paid the full amount of the assessment, and, we believe that, we have no remaining liability related to the data security incidents as of September 30, 2020 or 2019. Liabilities for loss contingencies, arising from claims, assessments, litigation, fines, penalties, the data security incidents and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. We have no significant liabilities for loss contingencies at September 30, 2020 and 2019. |
Debt
Debt | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 12. Short-term Debt In July 2017, we entered into an amended and restated $500 million, five-year On April 15, 2020, we entered into an amendment to our ABL facility to, among other things, increased the revolving commitment thereunder from $500.0 million to $600.0 million, established a FILO (first-in, last-out) tranche of indebtedness in the amount of $20.0 million, increased pricing on the revolving loans and modified certain covenant and reporting terms. The ABL facility continues to be secured by a first-priority lien in and upon the accounts and inventory (and the proceeds thereof) of the Company and its guarantor subsidiaries. The ABL facility is also secured by a second-priority lien in and upon the remaining assets of the Company and its guarantor subsidiaries. At September 30, 2020 and 2019, we did not have any outstanding borrowing under the ABL facility. At September 30, 2020, we had $435.0 million available for borrowing under the ABL facility. Long-term Debt Long-term debt consists of the following (dollars in thousands): September 30, 2020 2019 Interest Rates Term loan B: Variable-rate tranche 422,625 424,000 LIBOR plus 2.25% Fixed-rate tranche 213,163 300,000 4.500% Senior notes due Nov. 2023 197,419 197,419 5.500% Senior notes due Apr. 2025 300,000 - 8.750% Senior notes due Dec. 2025 679,961 687,877 5.625% Total $ 1,813,168 $ 1,609,296 Plus: capital lease obligations 864 832 Less: unamortized debt issuance costs and discount, net 16,955 15,585 Total debt $ 1,797,077 $ 1,594,543 Less: current maturities 180 1 Total long-term debt $ 1,796,897 $ 1,594,542 Maturities of our debt, excluding capital leases, are as follows at September 30, 2020 (in thousands): Fiscal Year: 2021-2023 $ — 2024 833,207 2025 300,000 Thereafter 679,961 Total $ 1,813,168 Term Loan B In July 2017, we entered into a seven-year During the fiscal year ended September 30, 2020, we paid down $86.8 million aggregate principal amount of our term loan B fixed tranche at a weighted-average price of 99.4%, excluding accrued interest. In connection with our term loan B fixed tranche repayments, we recognized a net $0.2 million gain on the extinguishment of debt. This gain was a result of the discount paid under the face value of approximately $0.6 million, partially offset from the loss of approximately $0.4 million from the write-off of unamortized deferred financing costs. Senior Notes The senior notes due 2023 and the senior notes due December 2025, which we refer to collectively as “the senior notes due 2023 and 2025,” are unsecured obligations that are jointly and severally guaranteed by Sally Beauty Holdings, Inc. and Sally Investment, and by each material domestic subsidiary. Interest on the senior notes due 2023 and 2025 is payable semi-annually, during our first and third fiscal quarters. Please see Note 17 for certain condensed financial statement data pertaining to Sally Beauty Holdings, Inc., the Issuers, the guarantor subsidiaries and the non-guarantor subsidiaries. During the fiscal year ended September 30, 2020, we repurchased $7.9 million of our senior notes due December 2025 at a weighted-average price of 98.7%, excluding accrued interest. As a result, we recognized a $0.1 million gain on the extinguishment of debt. On April 24, 2020, we closed on $300.0 million of our Senior Secured Notes and received $295.5 million in net proceeds from the Senior Secured Notes offering. The notes bear interest at a rate of 8.75% and were issued at par. The Senior Secured Notes are guaranteed on a senior secured basis by the guarantors who have guaranteed obligations under our senior secured credit facilities and our existing notes. Covenants The agreements governing our debt contain a customary covenant package that places restrictions on the disposition of assets, the granting of liens and security interests, the prepayment of certain indebtedness, and other matters and customary events of default, including customary cross-default and/or cross-acceleration provisions. As of September 30, 2020, we are in compliance with all debt covenants and all the net assets of our consolidated subsidiaries were unrestricted from transfer. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 13. As of September 30, 2020, we did not purchase or hold any derivative instruments for trading or speculative purposes. See Note 4 for the classification and fair value of our derivative instruments. Designated Cash Flow Hedges Foreign Currency Forwards During the fiscal year ended September 30, 2020, we entered into foreign currency forwards to mitigate the exposure to exchange rate changes on inventory purchases in USD by our foreign subsidiaries over fiscal year 2020. As of September 30, 2020, all of our foreign currency forward derivatives instruments had settled. We record, net of income tax, the changes in fair value related to the foreign currency forwards into AOCL and recognize realized gain or loss into cost of goods sold based on inventory turns. As of September 30, 2020, we expect to reclassify approximately $0.6 million into cost of goods sold over the next 12 months. During the fiscal year ended September 30, 2020, we reclassified $1.1 million of net losses into cost of goods sold. Interest Rate Caps In July 2017, we purchased two interest rate caps with an initial aggregate notional amount of $550 million (the “interest rate caps”). The interest rate caps are made up of individual caplets that expire monthly through June 30, 2023 and are designated as cash flow hedges. Over the next 12 months, we expect to reclassify approximately $1.2 million into interest expense, which represents the original value of the expiring caplets. During the fiscal year ended September 30, 2020, we reclassified $0.6 million into interest expense. Non-Designated Cash Flow Hedges During the fiscal year ended September 30, 2018, we used foreign currency forwards to mitigate the exposure to exchange rate changes on inventory purchases in USD by our foreign subsidiaries. We did not have any material non-designated foreign currency forwards during fiscal years 2020 or 2019. During the fiscal year ended |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan | 12 Months Ended |
Sep. 30, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) and Profit Sharing Plan | 14. We offer 401(k) Plans to our U.S. and Puerto Rico employees who meet certain eligibility requirements. The U.S. 401(k) Plan allows employees to contribute immediately upon hire, while the Puerto Rico 401(k) Plan allows employees to contribute after one year of employment. Under the terms of each 401(k) Plan, employees may contribute a percentage of their annual compensation up to certain maximums, as defined by each 401(k) Plan and by statutory limitations. We currently match a portion of employee contributions, as defined by each 401(k) Plan. We recognized expense of $5.8 million, $6.2 million and $6.5 million in the fiscal years ended September 30, 2020, 2019 and 2018, respectively, related to such matching contributions and these amounts are included in selling, general and administrative expenses in our consolidated statements of earnings. In addition, pursuant to the 401(k) Plans, we may elect to make voluntary profit sharing contributions to the accounts of eligible employees as determined by the Compensation Committee of the Board. During the fiscal years ended September 30, 2020, 2019 and 2018, we did not make a profit sharing contribution to the 401(k) Plans. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. U.S. Tax Law Changes In response to the global pandemic related to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, temporary suspension of certain payment requirements for the employer portion of social security taxes, and the creation of certain refundable employee retention credits. There was not a material impact on our income tax expense for the twelve months ended September 30, 2020, related to the CARES Act. We will continue to monitor legislative developments related to COVID-19 and will record the associated income tax impacts in the periods that guidance is finalized or when we are able to reasonably estimate an impact. On December 22, 2017, the U.S. enacted comprehensive amendments to the Internal Revenue Code of 1986 (“U.S. Tax Reform”). Among other things, U.S. Tax Reform (a) reduced the federal statutory tax rate for corporate taxpayers, (b) provided for a deemed repatriation of undistributed foreign earnings by U.S. taxpayers and made other fundamental changes on how foreign earnings will be taxed by the U.S. and (c) otherwise modified corporate tax rules in significant ways. The U.S. Treasury Department has issued final regulations covering the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of U.S Tax Reform. Certain guidance included in these final regulations is inconsistent with our interpretation of the enacted tax law that led to the recognition of a $2.5 million benefit in the first quarter of fiscal year 2018. Notwithstanding this inconsistency, we remain confident in our interpretation of the Internal Revenue Code and intend to defend this position through litigation, if necessary. However, if we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit. Beginning with our first quarter of fiscal year 2019, we are subject to taxation on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. We have made the policy election to record this tax as a period cost at the time it is incurred. The impact from GILTI was immaterial for fiscal years 2020 and 2019. For the fiscal year ended September 30, 2020, the provision for income taxes also includes a benefit due to a reduction of prior year tax related to GILTI. The benefit is a result of favorable final Regulations being issued by the Department of Treasury in July 2020, which can be applied retroactively. The provision for income taxes for the fiscal years 2020, 2019 and 2018 consists of the following (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Current: Federal $ 22,282 $ 59,855 $ 68,608 Foreign 6,120 10,132 11,039 State 4,730 15,339 11,344 Total current portion 33,132 85,326 90,991 Deferred: Federal 10,177 4,905 (26,001 ) Foreign 1,321 (1,498 ) 1,868 State 2,092 1,808 3,522 Total deferred portion 13,590 5,215 (20,611 ) Total provision for income taxes $ 46,722 $ 90,541 $ 70,380 The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below: Fiscal Year Ended September 30, 2020 2019 2018 U.S. federal statutory income tax rate 21.0 % 21.0 % 24.5 % State income taxes, net of federal tax benefit 3.4 3.4 3.2 Effect of foreign operations (0.4 ) 0.2 — Foreign valuation allowances 4.6 (0.2 ) 0.6 Tax law change - GILTI (1.0 ) — — Deferred tax revaluation, including adoption of income tax method changes — — (11.5 ) Deemed repatriation tax 0.2 (0.3 ) 3.6 Share-based payment awards 1.2 0.6 0.5 Other, net 0.2 0.3 0.5 Effective tax rate 29.2 % 25.0 % 21.4 % The tax effects of temporary differences that give rise to our deferred tax assets and liabilities are as follows (in thousands): September 30, 2020 2019 Deferred tax assets attributable to: Foreign loss carryforwards $ 35,091 $ 27,097 Accrued liabilities 8,871 12,568 Share-based compensation expense 8,988 9,494 U.S. foreign tax credits 11,199 8,807 U.S. federal social security tax deferral 4,038 — Inventory adjustments 2,131 1,242 Other 1,101 651 Total deferred tax assets 71,419 59,859 Valuation allowance (50,543 ) (38,287 ) Total deferred tax assets, net 20,876 21,572 Deferred tax liabilities attributable to: Depreciation and amortization 107,672 94,920 Net deferred tax liability $ 86,796 $ 73,348 We believe that it is more-likely-than-not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets, net of the valuation allowance. We have recorded a valuation allowance to account for uncertainties regarding recoverability of certain deferred tax assets, primarily fo reign loss carry-forwards. Domestic earnings before provision for income taxes were $168.0 million, $328.3 million and $300.4 million in the fiscal years 2020, 2019 and 2018, respectively. Foreign operations had a loss before provision for income taxes of $8.0 million in the fiscal year 2020 and earnings before provision for income taxes of $33.9 million and $28.0 million in the fiscal years 2019 and 2018, respectively. Tax reserves are evaluated and adjusted as appropriate, while taking into account the progress of audits by various taxing jurisdictions and other changes in relevant facts and circumstances evident at each balance sheet date. We do not expect the outcome of current or future tax audits to have a material adverse effect on our consolidated financial condition, results of operations or cash flow. As of September 30, 2020, no deferred taxes have been provided on the accumulated undistributed earnings of our foreign operations beyond the amounts recorded for deemed repatriation of such earnings, as required by U.S. Tax Reform. An actual repatriation of earnings from our foreign operations could still be subject to additional foreign withholding taxes and U.S. state taxes. Based upon evaluation of our foreign operations, undistributed earnings are intended to remain permanently reinvested to finance anticipated future growth and expansion, and accordingly, deferred taxes have not been provided. If undistributed earnings of our foreign operations were not considered permanently reinvested as of September 30, 2020, an immaterial amount of additional deferred taxes would have been provided. At September 30, 2020 and 2019, we had total operating loss carry-forwards of $128.2 million and $97.3 million, respectively, of which $111.7 million and $79.0 million, respectively, are subject to a valuation allowance. At September 30, 2020, operating loss carry-forwards of $6.2 million expire between 2021 and 2032 and operating loss carry-forwards of $122.0 million have no expiration date. At September 30, 2020 and 2019, we had tax credit carry-forwards of $13.8 million and $11.2 million, respectively. This includes a U.S. foreign tax credit carry-forward of $11.2 million primarily as a result of the deemed repatriation tax under U.S. Tax Reform. This credit expires in 2028. We do not believe the realization of the U.S. foreign tax credit is more-likely-than-not, so a valuation allowance has been recorded against its full value. Of the remaining tax credit carry-forwards, at September 30, 2020, $1.2 million expire between 2024 and 2028, and $1.4 million have no expiration date. Total tax credit carry-forwards of $12.6 million and $10.1 million are subject to a valuation allowance at September 30, 2020 and 2019, respectively. The changes in the amount of unrecognized tax benefits are as follows (in thousands): Fiscal Year Ended September 30, 2020 2019 Balance at beginning of the fiscal year $ 2,000 $ 1,368 Increases related to prior year tax positions — — Decreases related to prior year tax positions (4 ) (4 ) Increases related to current year tax positions 250 954 Lapse of statute (193 ) (318 ) Balance at end of fiscal year $ 2,053 $ 2,000 If recognized, these positions would affect our effective tax rate. We recognize interest and penalties, accrued in connection with unrecognized tax benefits, in provision for income taxes. Accrued interest and penalties, in the aggregate, were $0.2 million at September 30, 2020 and 2019. Because existing tax positions will continue to generate increased liabilities for unrecognized tax benefits over the next 12 months, and the fact that from time to time our tax returns are routinely under audit by various taxing authorities, it is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months. An estimate of the amount of such change, or a range thereof, cannot reasonably be made at this time. However, we do not expect the change, if any, to have a material effect on our consolidated financial condition or results of operations within the next 12 months. Our con solidated federal income tax return for the fiscal years ended September 30, 2019 and 2018, are currently under IRS examination. Our statute remains open for the fiscal year ended September 30, 2017, forward. Our U.S. state income tax returns are impacted by various statutes of limitations and are generally open for the fiscal year ended September 30, 2017 and future years. Our foreign income tax returns are impacted by various statutes of limitations, which are generally open from 2015 forward. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 16. On September 28, 2020, we acquired La Maison Ami-Co (1981) Inc. (“Ami-Co”), a professional beauty products distributor with ten stores in the province of Quebec, Canada, for approximately $8.9 million, pending certain holdbacks. In addition, this acquisition includes exclusive distribution rights in Quebec to premier professional hair color and hair care brands. We accounted for this acquisition using the acquisition method of accounting for business combinations and funded by cash on hand. Upon acquisition, we preliminary recorded goodwill of $5.3 million, which is not expected to be deductible for tax purposes, in connection with this acquisition. The results of operations of Ami-Co subsequent to the acquisition date and the goodwill recorded in connection with the acquisition was included within our BSG segment. The acquisition of Ami-Co was not material to our results of operations. In addition, we completed several other individually immaterial acquisitions during the fiscal year 2020 in the aggregate cost of approximately $5.7 million and recorded intangible assets subject to amortization of $3.9 million. In the fiscal year ended September 30, 2018, we acquired certain assets and business operations of H. Chalut, Ltee. (“Chalut”), a distributor of beauty products with 21 stores operating in the province of Quebec, Canada, for approximately $8.8 million. This acquisition was accounted for using the acquisition method of accounting for business combinations and funded by cash from operations and borrowing under the ABL facility. The results of operations of Chalut are included in our BSG segment subsequent to the acquisition date. We recorded intangible assets subject to amortization of $4.7 million and goodwill of $0.7 million, which is expected to be deductible for tax purposes, in connection with this acquisition. The goodwill in connection with the acquisition was assigned to our BSG segment. The acquisition of Chalut was not material to the results of operations. For the fiscal year ended September 30, 2019, we did not acquire any substantial businesses. |
Segments and Disaggregated Reve
Segments and Disaggregated Revenue | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments and Disaggregated Revenue | 17. Our segments are defined on how our chief operating decision maker, which we consider the Chief Executive Officer and Chief Financial Officer together, regularly reviews performance and allocates resources to our operating segments. Our business is organized into two reportable segments: (i) SBS, a domestic and international chain of retail stores and a consumer-facing e-commerce website that offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America and (ii) BSG, including its franchise-based business Armstrong McCall, a full service distributor of beauty products and supplies that offers professional beauty products directly to salons and salon professionals through its professional-only stores, e-commerce platforms and its own sales force in partially exclusive geographical territories in the U.S. and Canada. The accounting policies of both of our reportable segments are the same as described in the summary of significant accounting policies contained in Note 2. Sales between segments, which were eliminated in consolidation, were not material for the fiscal years ended September 30, 2020, 2019 and 2018. Business Segments Information Segment data for the fiscal years 2020, 2019 and 2018 are as follows (in thousands): 2020 2019 2018 Net sales (for the fiscal year indicated): SBS $ 2,080,703 $ 2,293,094 $ 2,333,838 BSG 1,433,627 1,583,317 1,598,727 Total $ 3,514,330 $ 3,876,411 $ 3,932,565 Earnings before provision for income taxes: Segment operating earnings: SBS $ 237,588 $ 366,412 $ 362,853 BSG 194,206 239,572 240,225 Segment operating earnings 431,794 605,984 603,078 Unallocated expenses 159,009 148,193 142,874 Restructuring 14,025 (682 ) 33,615 Consolidated operating earnings 258,760 458,473 426,589 Interest expense 98,793 96,309 98,162 Earnings before provision for income taxes $ 159,967 $ 362,164 $ 328,427 Depreciation and amortization: SBS $ 65,207 $ 65,561 $ 64,017 BSG 29,324 28,568 29,733 Corporate 12,248 13,529 15,079 Total $ 106,779 $ 107,658 $ 108,829 Payments for property and equipment: SBS $ 73,130 $ 69,802 $ 46,289 BSG 27,338 18,997 16,598 Corporate 10,390 18,956 23,620 Total $ 110,858 $ 107,755 $ 86,507 Total assets (as of September 30): SBS $ 1,370,745 $ 973,304 $ 995,546 BSG 1,106,801 1,012,336 993,122 Sub-total 2,477,546 1,985,640 1,988,668 Corporate 417,601 112,806 108,746 Total $ 2,895,147 $ 2,098,446 $ 2,097,414 Unallocated expenses consist of corporate and shared costs and are included in selling, general and administrative expenses in our consolidated statements of earnings. In the fiscal years 2020, 2019, and 2018, no single customer accounted for 10% or more of revenue. Geographic Area Information Certain geographic data is as follows (in thousands): 2020 2019 2018 Net sales (for the fiscal year indicated): United States $ 2,914,171 $ 3,169,821 $ 3,188,993 Other countries 600,159 706,590 743,572 Total $ 3,514,330 $ 3,876,411 $ 3,932,565 Long-lived assets (as of September 30): United States $ 264,936 $ 259,815 $ 234,475 United Kingdom 20,183 24,476 29,493 Other countries 29,910 35,337 44,389 Total $ 315,029 $ 319,628 $ 308,357 Disaggregated Revenues The following tables disaggregate our segment revenues by merchandise category: Fiscal Year Ended September 30, SBS 2020 2019 2018 Hair color 33.0 % 29.4 % 26.9 % Hair care 18.9 % 20.4 % 20.9 % Skin and nail care 14.3 % 14.8 % 15.7 % Styling tools 12.8 % 13.5 % 13.9 % Salon supplies and accessories 8.1 % 6.6 % 7.1 % Textured hair 5.8 % 7.1 % 7.5 % Other beauty items 7.1 % 8.2 % 8.0 % Total 100.0 % 100.0 % 100.0 % Fiscal Year Ended September 30, BSG 2020 2019 2018 Hair color 40.6 % 39.5 % 38.4 % Hair care 35.0 % 35.1 % 33.7 % Skin and nail care 8.0 % 8.1 % 8.7 % Styling tools 6.2 % 3.4 % 3.9 % Other beauty items 3.4 % 6.3 % 6.7 % Promotional items 6.8 % 7.6 % 8.6 % Total 100.0 % 100.0 % 100.0 % The following table disaggregates our segment revenue by sales channels: SBS BSG Fiscal Year Ended September 30, Fiscal Year Ended September 30, 2020 2019 2018 2020 2019 2018 Company-operated stores 91.8 % 96.9 % 97.5 % 68.9 % 69.4 % 68.7 % E-commerce 8.0 % 2.8 % 2.2 % 8.7 % 4.8 % 3.7 % Franchise stores 0.2 % 0.3 % 0.3 % 7.1 % 7.6 % 7.7 % Distributor sales consultants — — — 15.3 % 18.2 % 19.9 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % |
Separate Financial Information
Separate Financial Information of Guarantor Subsidiaries | 12 Months Ended |
Sep. 30, 2020 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Separate Financial Information of Guarantor Subsidiaries | 18. Sep Certain 100% wholly owned domestic subsidiaries (“guarantor subsidiaries”), as defined in our credit agreements, of Sally Beauty serve as guarantors to the ABL facility, term loan B, senior notes due 2023 and 2025 and Senior Secured Note. The guarantees related to these debt instruments are full and unconditional, joint and several and have certain restrictions on the ability to pay restricted payments to Sally Beauty Holdings, Inc. (“parent”). Certain other subsidiaries, including our foreign subsidiaries, do not serve as guarantors (“non-guarantor subsidiaries”). The following condensed consolidating financial information represents financial information for (i) parent, (ii) Sally Holdings and Sally Capital Inc., (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries, (v) elimination entries necessary for consolidation purposes, and (vi) Sally Beauty on a consolidated basis. Condensed Consolidating Balance Sheet September 30, 2020 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 194,622 $ 217,865 $ 101,664 $ — $ 514,151 Trade and other accounts receivable, net — — 29,637 26,792 — 56,429 Due from affiliates — — 3,015,299 — (3,015,299 ) — Inventory — — 615,092 199,411 — 814,503 Other current assets 6,908 132 26,103 14,871 — 48,014 Property and equipment, net 6 — 263,381 51,642 — 315,029 Operating lease assets — — 392,863 132,771 — 525,634 Investment in subsidiaries 1,756,347 4,582,915 390,579 — (6,729,841 ) — Goodwill and other intangible assets, net — — 449,802 148,519 — 598,321 Other assets 1,431 3,104 5,059 13,472 — 23,066 Total assets $ 1,764,692 $ 4,780,773 $ 5,405,680 $ 689,142 $ (9,745,140 ) $ 2,895,147 Liabilities and Stockholders’ Equity (Deficit) Accounts payable $ 36 $ — $ 183,088 $ 53,209 $ — $ 236,333 Due to affiliates 1,742,661 1,196,746 — 75,892 (3,015,299 ) — Accrued liabilities 205 29,165 110,165 31,130 — 170,665 Income taxes payable 419 2,302 — 196 — 2,917 Long-term debt — 1,796,213 2 862 — 1,797,077 Operating lease liabilities — — 413,685 133,957 — 547,642 Other liabilities 5,928 — 26,889 159 — 32,976 Deferred income tax liabilities, net — — 88,936 3,158 — 92,094 Total liabilities 1,749,249 3,024,426 822,765 298,563 (3,015,299 ) 2,879,704 Total stockholders’ equity (deficit) 15,443 1,756,347 4,582,915 390,579 (6,729,841 ) 15,443 Total liabilities and stockholders’ equity (deficit) $ 1,764,692 $ 4,780,773 $ 5,405,680 $ 689,142 $ (9,745,140 ) $ 2,895,147 Condensed Consolidating Balance Sheet September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Trade and other accounts receivable, net — — 65,746 38,793 — 104,539 Due from affiliates — — 2,878,072 — (2,878,072 ) — Inventory — — 722,830 230,077 — 952,907 Other current assets 1,436 132 22,480 10,564 — 34,612 Property and equipment, net 6 — 258,132 61,490 — 319,628 Investment in subsidiaries 1,621,843 4,374,334 385,629 — (6,381,806 ) — Goodwill and other intangible assets, net — — 452,645 140,192 — 592,837 Other assets 1,446 3,499 (581 ) 18,064 — 22,428 Total assets $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 Liabilities and Stockholders’ Equity (Deficit) Accounts payable $ 48 $ — $ 235,940 $ 42,700 $ — $ 278,688 Due to affiliates 1,672,322 1,142,324 — 63,426 (2,878,072 ) — Accrued liabilities 188 17,937 121,375 29,554 — 169,054 Income taxes payable 6,055 2,161 1 119 — 8,336 Long-term debt — 1,593,710 1 832 — 1,594,543 Other liabilities 6,441 — 17,639 3,677 — 27,757 Deferred income tax liabilities, net — — 76,672 3,719 — 80,391 Total liabilities 1,685,054 2,756,132 451,628 144,027 (2,878,072 ) 2,158,769 Total stockholders’ equity (deficit) (60,323 ) 1,621,843 4,374,334 385,629 (6,381,806 ) (60,323 ) Total liabilities and stockholders’ equity (deficit) $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2020 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 2,883,265 $ 631,065 $ — $ 3,514,330 Related party sales — — 1,761 — (1,761 ) — Cost of goods sold — — 1,447,705 352,792 (1,761 ) 1,798,736 Gross profit — — 1,437,321 278,273 — 1,715,594 Selling, general and administrative expenses 11,501 753 1,152,489 278,066 — 1,442,809 Restructuring — — 14,025 — — 14,025 Operating earnings (loss) (11,501 ) (753 ) 270,807 207 — 258,760 Interest expense (income) — 98,998 (131 ) (74 ) — 98,793 Earnings (loss) before provision for income taxes (11,501 ) (99,751 ) 270,938 281 — 159,967 Provision (benefit) for income taxes (2,901 ) (25,476 ) 70,840 4,259 — 46,722 Equity (loss) in earnings of subsidiaries, net of tax 121,845 196,120 (3,978 ) — (313,987 ) — Net earnings (loss) 113,245 121,845 196,120 (3,978 ) (313,987 ) 113,245 Other comprehensive income, net of tax — 198 — 12,386 — 12,584 Total comprehensive income $ 113,245 $ 122,043 $ 196,120 $ 8,408 $ (313,987 ) $ 125,829 Condensed Consolidating Stat ement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,131,360 $ 745,051 $ — $ 3,876,411 Related party sales — — 2,201 — (2,201 ) — Cost of goods sold — — 1,568,663 399,407 (2,201 ) 1,965,869 Gross profit — — 1,564,898 345,644 — 1,910,542 Selling, general and administrative expenses 11,331 607 1,135,926 304,887 — 1,452,751 Restructuring — — (682 ) — — (682 ) Operating earnings (loss) (11,331 ) (607 ) 429,654 40,757 — 458,473 Interest expense (income) — 96,464 5 (160 ) — 96,309 Earnings (loss) before provision for income taxes (11,331 ) (97,071 ) 429,649 40,917 — 362,164 Provision (benefit) for income taxes (2,742 ) (24,888 ) 109,230 8,941 — 90,541 Equity in earnings of subsidiaries, net of tax 280,212 352,395 31,976 — (664,583 ) — Net earnings 271,623 280,212 352,395 31,976 (664,583 ) 271,623 Other comprehensive loss, net of tax — (4,566 ) — (22,730 ) — (27,296 ) Total comprehensive income $ 271,623 $ 275,646 $ 352,395 $ 9,246 $ (664,583 ) $ 244,327 Condensed Consolidating Stat ement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,152,120 $ 780,445 $ — $ 3,932,565 Related party sales — — 2,294 — (2,294 ) — Cost of goods sold — — 1,581,385 409,061 (2,294 ) 1,988,152 Gross profit — — 1,573,029 371,384 — 1,944,413 Selling, general and administrative expenses 10,957 1,538 1,136,312 335,402 — 1,484,209 Restructuring — — 33,615 — — 33,615 Operating earnings (loss) (10,957 ) (1,538 ) 403,102 35,982 — 426,589 Interest expense — 98,332 (3 ) (167 ) — 98,162 Earnings (loss) before provision for income taxes (10,957 ) (99,870 ) 403,105 36,149 — 328,427 Provision (benefit) for income taxes (2,734 ) (28,787 ) 73,747 28,154 — 70,380 Equity in earnings of subsidiaries, net of tax 266,270 337,353 7,995 — (611,618 ) — Net earnings 258,047 266,270 337,353 7,995 (611,618 ) 258,047 Other comprehensive income (loss), net of tax — 2,449 — (10,604 ) — (8,155 ) Total comprehensive income $ 258,047 $ 268,719 $ 337,353 $ (2,609 ) $ (611,618 ) $ 249,892 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ (11,769 ) $ (58,166 ) $ 417,940 $ 78,884 $ — $ 426,889 Cash Flows from Investing Activities: Payments for property and equipment, net (5 ) — (98,379 ) (12,421 ) — (110,805 ) Acquisitions, net of cash acquired — — (5,479 ) (7,491 ) — (12,970 ) Due from affiliates — — (137,227 ) — 137,227 — Net cash used by investing activities (5 ) — (241,085 ) (19,912 ) 137,227 (123,775 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 1,087,500 4 — — 1,087,504 Repayments of long-term debt — (882,887 ) (3 ) (31 ) — (882,921 ) Debt issuance cost — (6,257 ) — — — (6,257 ) Payments for common stock repurchased (61,357 ) — — — — (61,357 ) Proceeds from exercises of stock options 2,792 — — — — 2,792 Due to affiliates 70,339 54,422 — 12,466 (137,227 ) — Net cash provided by financing activities 11,774 252,778 1 12,435 (137,227 ) 139,761 Effect of foreign exchange rate changes on cash and cash equivalents — — — (219 ) — (219 ) Net increase in cash and cash equivalents — 194,612 176,856 71,188 — 442,656 Cash and cash equivalents, beginning of period — 10 41,009 30,476 — 71,495 Cash and cash equivalents, end of period $ — $ 194,622 $ 217,865 $ 101,664 $ — $ 514,151 Condensed Consolidating Statement of Cash Flows September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 2,364 $ (70,150 ) $ 373,313 $ 14,888 $ — $ 320,415 Cash Flows from Investing Activities: Payments for property and equipment, net (1 ) — (79,379 ) (13,063 ) — (92,443 ) Acquisitions, net of cash acquired — — (2,584 ) (840 ) — (3,424 ) Due from affiliates — — (279,391 ) — 279,391 — Net cash used by investing activities (1 ) — (361,354 ) (13,903 ) 279,391 (95,867 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 593,500 4 — — 593,504 Repayments of long-term debt — (777,533 ) (4 ) (1 ) — (777,538 ) Payments for common stock repurchased (47,434 ) — — — — (47,434 ) Proceeds from exercises of stock options 2,160 — — — — 2,160 Due to affiliates 42,911 254,183 — (17,703 ) (279,391 ) — Net cash provided (used) by financing activities (2,363 ) 70,150 — (17,704 ) (279,391 ) (229,308 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (1,040 ) — (1,040 ) Net increase (decrease) in cash and cash equivalents — — 11,959 (17,759 ) — (5,800 ) Cash and cash equivalents, beginning of period — 10 29,050 48,235 — 77,295 Cash and cash equivalents, end of period $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 23,424 $ (62,948 ) $ 384,958 $ 27,227 $ — $ 372,661 Cash Flows from Investing Activities: Payments for property and equipment, net — — (68,689 ) (17,449 ) — (86,138 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (309,310 ) — 309,310 — Net cash used by investing activities — — (377,999 ) (26,624 ) 309,310 (95,313 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 461,814 5 — — 461,819 Repayments of long-term debt — (558,000 ) (4 ) (595 ) — (558,599 ) Debt issuance cost — (1,151 ) — — — (1,151 ) Payments for common stock repurchased (166,701 ) — — — — (166,701 ) Proceeds from exercises of stock options 1,350 — — — — 1,350 Due to affiliates 141,927 160,285 — 7,098 (309,310 ) — Net cash provided (used) by financing activities (23,424 ) 62,948 1 6,503 (309,310 ) (263,282 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (530 ) — (530 ) Net increase in cash and cash equivalents — — 6,960 6,576 — 13,536 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 |
Restructuring
Restructuring | 12 Months Ended |
Sep. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 19. Restructuring expense and gains for the fiscal years ended September 30, 2020, 2019 and 2018, are as follows (in thousands): 2020 2019 2018 Project Surge $ 1,511 $ — $ — Transformation Plan 12,514 (682 ) 33,615 Total expense (gain) $ 14,025 $ (682 ) $ 33,615 Project Surge In November 2019, we announced that we were launching Project Surge, which takes the successful elements of the North American Sally Beauty transformation and integrates them into our European operations, with the support and participation of several key leaders from the corporate headquarters. As part of this plan, we are focusing on several operating elements, including a review of our talent and operating structure. The liability related to Project Surge, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): Project Surge Liability at September 30, 2019 Expenses Cash Payments Adjustments Liability at September 30, 2020 Workforce reductions $ — $ 1,149 $ 1,149 $ — $ — Facility closures — — — — — Other — 362 362 — — Total $ — $ 1,511 $ 1,511 $ — $ — Expenses incurred during the fiscal year ended September 30, 2020, represent costs incurred by SBS of $1.4 million and corporate of $0.1 million. Transformation Plan We previously disclosed a plan to focus on certain core business strategies. In addition to optimizing our supply chain network with changes to our transportation model and network of nodes, we are improving our marketing and digital commerce capabilities, and advancing our merchandising transformation efforts. In addition, we expanded our plan and announced a reduction in workforce within our field and headquarters. All these together, make up our Transformation Plan. The liability related to the Transformation Plan, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): Transformation Plan Liability at September 30, 2019 Expenses Cash Payments Adjustments Liability at September 30, 2020 Workforce reductions $ 654 $ 6,550 $ 7,139 $ — $ 65 Consulting 204 1,425 1,629 — — Other 70 4,539 4,609 — — Total $ 928 $ 12,514 $ 13,377 $ — $ 65 Expenses incurred during the fiscal year ended September 30, 2020, represent costs incurred by SBS of $6.5 million, corporate of $4.1 million and BSG of $1.9 million. Additionally, other expenses in the table above includes a non-cash asset impairment of $ |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Sep. 30, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 20. Certain unaudited quarterly consolidated statement of earnings information for the fiscal years ended September 30, 2020 and 2019 is summarized below (in thousands, except per share data): 1 st 2 nd 3 rd 4 th Fiscal Year Quarter Quarter Quarter Quarter 2020: Net sales $ 980,208 $ 871,023 $ 705,287 $ 957,812 Gross profit $ 474,848 $ 429,757 $ 321,846 $ 489,143 Net earnings (loss) $ 53,215 $ 13,368 $ (23,526 ) $ 70,188 Earnings (loss) per share (a) Basic $ 0.46 $ 0.12 $ (0.21 ) $ 0.63 Diluted $ 0.45 $ 0.12 $ (0.21 ) $ 0.62 2019: Net sales $ 989,453 $ 945,852 $ 975,169 $ 965,937 Gross profit $ 480,705 $ 468,324 $ 482,222 $ 479,291 Net earnings $ 65,727 $ 65,725 $ 71,164 $ 69,007 Earnings per share (a) Basic $ 0.55 $ 0.55 $ 0.59 $ 0.58 Diluted $ 0.54 $ 0.54 $ 0.59 $ 0.58 (a) The sum of the quarterly earnings per share may not equal the full year amount due to rounding of the calculated amounts. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates In accordance with GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent liabilities in the consolidated financial statements. Actual results may differ from these estimates in amounts that may be material to our consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash represents currency on hand, debit and credit card receivable and third-party online payment systems transactions, while cash equivalents consist of highly liquid investments which have an original maturity of three months or less. |
Trade Accounts Receivable and Accounts Receivable, Other | Trade Accounts Receivable and Accounts Receivable, Other Trade accounts receivable consist of credit extended directly to certain customers who meet our credit requirements in the ordinary course of business and are stated at their carrying values, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is regularly reviewed on the basis of our historical collection data and current customer information. Customer account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At September 30, 2020 and 2019, our allowance for doubtful accounts was $1.9 million and $1.7 million, respectively. Other accounts receivable consist primarily of amounts due from vendors under various contractual agreements and include volume rebates and other promotional considerations. |
Inventory and Cost of Goods Sold | Inventory and Cost of Goods Sold Effective August 1, 2020, we changed how we value our inventory. See Note 3 for more information related to the change in our costing method. At September 30, 2020, inventory is stated at the lower of weighted average cost or net realizable value. At September 30, 2019, inventory is stated at the lower of cost using FIFO or net realizable value. Inventory cost reflects actual product costs, the cost of transportation to our distribution centers and certain shipping and handling costs, such as freight from the distribution centers to the stores and handling costs incurred at the distribution centers. When assessing the net realizable value of inventory, we consider several factors including estimates of future demand for our products, historical turn-over rates, the age and sales history of the inventory, and historic and anticipated changes in stock keeping units. Physical inventory counts are performed at substantially all stores and significant distribution centers at least annually. Upon completion of physical inventory counts, our consolidated financial statements are adjusted to reflect actual quantities on hand. Between physical counts, we estimate inventory shrinkage based on our historical experience. We have policies and processes in place that are intended to minimize inventory shrinkage. Cost of goods sold includes actual product costs, the cost of transportation to our distribution centers, operating cost associated with our distribution centers (including employee compensation expense, depreciation and amortization, rent and other occupancy-related expenses), vendor rebates and allowances, inventory shrinkage and certain shipping and handling costs, such as freight from the distribution centers to the stores. All other shipping and handling costs are included in se lling, general and administrative expenses when incurred. We deem cash consideration received from a supplier to be a reduction of the cost of inventory purchased, unless it is in exchange for an asset or service or a reimbursement of a specific, incremental, identifiable cost incurred by us in selling the vendor’s products. The majority of cash consideration we receive is considered to be a reduction of inventory and a subsequent reduction in cost of goods sold as the related products are sold. |
Lease Accounting | Lease Accounting Substantially all of our leases are operating leases and relate primarily to retail stores and warehousing properties with lease terms of five to ten years. Some of our leases include options to extend the agreement by a certain number of years, typically five years. At the lease commencement date, an operating lease liability and related operating lease asset are recognized and typically do not assume renewals unless we are reasonably certain that we will exercise the option. The operating lease liabilities are calculated using the present value of lease payments. The discount rate used is either the rate implicit in the lease, when known, or our estimated incremental borrowing rate. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because we do not generally borrow on a collateralized basis, we derive an appropriate incremental borrowing rate using the interest rate we pay on our non-collateralized borrowings, adjusted for the amount of the lease payments, the lease term and the effect of designating specific collateral with a value equal to the unpaid lease payments for that lease. We apply the incremental borrowing rate on a portfolio basis given the impact of applying it on a lease by lease basis would be immaterial. Operating lease assets are valued based on the initial operating lease liabilities plus any prepaid rent and direct costs from executing the leases, reduced by tenant improvement allowances and any rent abatement. Operating lease assets are tested for impairment in the same manner as our long-lived assets. During fiscal year 2020, we impaired approximately $1.9 million in operating lease assets and leasehold improvements, primarily as a result of the impact of COVID-19, within selling, general and administrative expenses. See Note 19 for additional information related to impairments in connection with our restructuring activity. See Note 3 for additional information regarding the accounting change in connection with the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated or amortized over the lesser of the estimated useful lives of the assets or the term of the related lease, including renewals considered reasonably assured. Expenditures for maintenance and repairs are included in selling, general and administrative expenses when incurred, while expenditures for major renewals and improvements that substantially extend the useful life of an asset are capitalized. The following table summarizes our property and equipment balances and their estimated useful lives (dollars in thousands): Life September 30, (in years) 2020 2019 Land N/A $ 10,120 $ 10,061 Buildings and building improvements 5 – 54,521 53,132 Leasehold improvements 2 – 10 304,404 281,195 Furniture, fixtures and equipment 2 – 10 640,693 634,525 Total property and equipment, gross 1,009,738 978,913 Accumulated depreciation and amortization (694,709 ) (659,285 ) Total property and equipment, net $ 315,029 $ 319,628 Depreciation expense for the fiscal years 2020, 2019 and 2018 was $95.5 million, $96.1 million and $97.2 million, respectively, and is included in selling, general and administrative expenses in our consolidated statements of earnings. |
Valuation of Long-Lived Assets and Definite-lived Intangible Assets | Valuation of Long-Lived Assets and Definite-lived Intangible Assets Long-lived assets and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The recoverability of long-lived assets and intangible assets subject to amortization is assessed by comparing the net carrying amount of each asset to the total estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. |
Goodwill and Indefinite-lived Intangible Assets | Goodwill and Indefinite-lived Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. G st Components within the same operating segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. As of September 30, 2020 and 2019, our reporting units consisted of Sally Beauty Supply (“SBS”) and Beauty Systems Group (“BSG”). We assign goodwill to the reporting unit which consolidates the acquisition. When assessing goodwill for impairment, we perform a quantitative assessment to compare the fair value of each reporting unit to its carrying value, including goodwill. Fair value is measured based on the discounted cash flow method. Based on our assessments, the fair value of each reporting unit exceeded its carrying value, and accordingly, we have not recorded any impairment charges related to goodwill in the current or prior fiscal years presented. Indefinite-lived Intangible Assets Our intangible assets with indefinite lives consist of trade names acquired in business combinations st whenever events or changes in circumstances indicate that the asset’s carrying amount may be less than its recoverable amount, to determine whether or not it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. Like goodwill, as a result of COVID-19, we performed an interim assessment for these assets as of March 31, 2020, which updated our assumptions around the growth, timing, and discount rate applied to future cash flows in connection with our business restart. When assessing intangible assets with indefinite lives for impairment, we compare the fair value of each asset against its carrying value. Fair value is based on the relief from royalty method. Based |
Self-Insurance Programs | Self-Insurance Programs We self-insure the risks related to workers’ compensation, general and auto liability, property and certain employee-related healthcare benefits. We have obtained third-party excess insurance coverage to limit our exposure per occurrence and aggregate cash outlay. We record an estimated liability for the ultimate cost of claims incurred and unpaid as of the balance sheet date, which includes claims filed and estimated losses incurred but not yet reported. We estimate the ultimate cost based on an analysis of our historical data and actuarial estimates. These estimates are reviewed on a regular basis to ensure that the recorded liability is adequate. The current and long-term portions of these liabilities are recorded at their present value and included in accrued liabilities and other liabilities in our consolidated balance sheets, respectively. |
Revenue Recognition | Revenue Recognition Substantially all of our revenue is derived through the sale of merchandise. Revenue is recognized net of estimated sales returns and sales taxes. We estimate sales returns based on historical data. Additionally, we have assessed all revenue streams for principal versus agent considerations and have concluded we are the principal for all transactions. See Note 17 for additional information regarding the disaggregation of our sales revenue. Merchandise Revenues The majority of our revenue comes from the sale of products in our company-operated stores. These sales generally have one single performance obligation and the revenue is recognized at the point of sale. However, discounts and incentives issued at the point of sale to entice a customer to a future purchase are treated as a separate performance obligation. As such, we allocate a portion of the revenue generated from the point of sale to each of the additional performance obligations separately using explicitly stated amounts or our best estimate using historical data. We also sell merchandise on our online platforms, to our franchisees and by using distributor sales consultants. These sales generally have one single performance obligation and revenue is recognized upon the shipment of the merchandise. Any shipping and handling fees charged to the customer are recognized as revenue, while any shipping and handling costs to get the merchandise shipped is recognized in cost of goods sold. We extend credit to certain customers, primarily salon professionals, which generally have 30 day payment terms. Based on the nature of theses receivables, no significant financing component exists. Gift Cards The revenue from the sale of our gift cards is recognized at the time the gift card is used to purchase merchandise, which is generally within one year from the date of purchase. Our gift cards do not carry expiration dates or impose post-sale fees. Based on historical experience, a certain amount of our gift cards will not be redeemed, also referred to as “gift card breakage.” We recognize revenue related to gift card breakage within revenue in our consolidated statements of earnings over time proportionately to historical redemption patterns. The gift cards are issued and represent liabilities of either of our operating entities, Sally Beauty Supply LLC or Beauty Systems Group LLC, which are both limited liability companies formed in the state of Virginia. Private Label Rewards Credit Card In September 2019, we signed a multi-year agreement with a third-party bank (the “Bank”) to launch a private label rewards credit card. Under the agreement, the Bank will manage and extend credit to our SBS and BSG customers and we will provide licensing to our brand, marketing services and facilitate credit applications. The Bank will be the sole owner of the private label rewards credit card accounts and takes on the risk of default by the private label rewards card holders. In connection with signing the agreement, we received a refundable payment from the Bank that we recorded as deferred revenue within other liabilities on our consolidated balance sheets and will recognize on a straight-line basis over the initial term of the agreement into net sales in our consolidated statements of earnings. Pursuant to the agreement, the Bank will reimburse us for certain expenses we incur for the launch and marketing of the Program. Amounts reimbursed are recognized in net sales in our consolidated statements of earnings. In addition, we can earn other amoun ts from the Bank, including incentive payments for achieving performance targets and the activation of credit cards. During the fiscal year ended September 30, 2020, we commenced operations and started to roll out our first SBS and BSG branded credit cards . Customer Loyalty Rewards Our Sally Beauty Rewards Loyalty Program in the U.S. and Canada, enables customers to earn points based on their status for every dollar spent on merchandise purchased in our SBS stores and through our sallybeauty.com sallybeauty.com The following table shows the amount of contract liabilities on our consolidated balance sheets as of September 30, 2020 and 2019 (in thousands): September 30, Contracts Balance Sheet Classification 2020 2019 Gift cards Accrued liabilities $ 5,066 $ 4,558 Rewards loyalty program Accrued liabilities 8,881 8,308 Total liability $ 13,947 $ 12,866 Changes to our contract liabilities for fiscal year 2020 were as follows (in thousands): September 30, 2019 $ 12,866 Loyalty points and gift cards issued but not redeemed, net of estimated breakage 10,198 Revenue recognized from beginning liability (9,117 ) September 30, 2020 $ 13,947 |
Advertising Costs | Advertising Costs Advertising costs relate mainly to print advertisements, digital marketing, trade shows and product education for salon professionals. Advertising costs incurred in connection with print advertisements are expensed the first time the advertisement is run. Other advertising costs are expensed when incurred. Advertising costs were $72.7 million, $73.3 million and $83.4 million for the fiscal years 2020, 2019 and 2018, respectively, and are included in selling, general and administrative expenses in our consolidated statements of earnings. |
Share-based Compensation | Share-based Compensation We measure the cost of services received from our employees and directors in exchange for an award of equity instruments based on the fair value of the award on the date of grant which are expensed ratably over the vesting period. We recognize the impact of forfeitures as they occur. Share-based compensation expense is included in selling, general and administrative expenses in our consolidated statements of earnings. |
Income Taxes | Income Taxes We recognize deferred income taxes for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are anticipated to be recovered or settled. The effect on deferred taxes of a change in income tax rates is recognized in the consolidated statements of earnings in the period of enactment. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets to the amount expected to be realized unless it is more-likely-than-not that such assets will be realized in full. The estimated tax benefit of an uncertain tax position is recorded in our consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax position will withstand challenge, if any, from applicable taxing authorities. |
Foreign Currency | Foreign Currency The functional currency of each of our foreign operations is generally the respective local currency. Balance sheet accounts are translated into U.S. dollars (our reporting currency) at the rates of exchange in effect at the balance sheet date, while the results of operations and cash flows are generally translated using average exchange rates for the periods presented. Individually material transactions, if any, are translated using the actual rate of exchange on the transaction date. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in our consolidated balance sheets. Foreign currency transaction gains or losses, including changes in the fair value (i.e., marked-to-market adjustments) of certain foreign exchange contracts we hold, are included in selling, general and administrative expenses in our consolidated statements of earnings when incurred and were not significant in any of the periods presented in the accompanying consolidated financial statements. |
Accounting Changes and Recent_2
Accounting Changes and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Changes | Accounting Changes In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02 which requires most leases to be reported on the balance sheet as a right-of-use asset and a lease liability. On October 1, 2019, we adopted ASU No. 2016-02 using a modified retrospective transition method without restating comparative periods. We have elected the package of practical expedients permitted within the transition guidance under the new standard relating to the identification, classification and initial direct costs of leases commencing before the effective date of Topic 842. In addition, we have elected to not recognize a right-of-use asset or lease obligation for short-term leases with an initial term of 12 months or less. The adoption of ASU No. 2016-02, as amended, resulted in the recognition of an operating lease asset of $513.9 million and an operating lease liability of $523.5 million. Existing straight-line rent liability, prepaid rent and accrued rent were reclassified from certain other assets and liabilities into the operating lease asset. Furthermore, the cumulative effect of the adoption of ASU No. 2016-02 resulted in a $0.1 million adjustment to accumulated earnings resulting from the impairment of certain operating lease assets as well certain deferred tax balances that were written off as a result of the adoption of the new standard. The impact on our consolidated results of operations or consolidated cash flows was not material. See Note 8 for additional information in connection with ASU No. 2016-02. Effective August 1, 2020, we changed our method of accounting for inventory located in the U.S. and Canada at both our distribution centers and store fronts. Prior to August 2020, we valued inventory at the lower of cost or net realizable value on a FIFO basis. Effective August 1, 2020, all company-wide inventories have been valued at the lower of cost or net realizable value using the weighted average cost method. These changes were made in connection with the implementation of a new perpetual inventory system, which provides us with better information to manage inventory. We believe the weighted average cost method is preferable to the FIFO cost method because it results in greater precision in the determination of cost of goods sold and inventories at the SKU level and results in a consistent inventory valuation method for all of the Company’s inventories. We recorded the cumulative effect of this change in accounting principle as of August 1, 2020. The effects of this change in accounting principle as of August 1, 2020 were not material to our consolidated financial statements. Prior to implementation of the new perpetual inventory system, we were not able to determine the impact of the change to the weighted average cost method. Therefore, we did not retroactively apply the change to prior periods. |
Recent Accounting Pronouncements | In December 2019, the FASB issued ASU No. 2019-12, Income Taxes Income Taxes prospective basis, retrospective basis, and a modified retrospective basis dependent on the specific change. We are currently evaluating the impact of this update. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Property and Equipment Balances and Estimated Useful Lives | The following table summarizes our property and equipment balances and their estimated useful lives (dollars in thousands): Life September 30, (in years) 2020 2019 Land N/A $ 10,120 $ 10,061 Buildings and building improvements 5 – 54,521 53,132 Leasehold improvements 2 – 10 304,404 281,195 Furniture, fixtures and equipment 2 – 10 640,693 634,525 Total property and equipment, gross 1,009,738 978,913 Accumulated depreciation and amortization (694,709 ) (659,285 ) Total property and equipment, net $ 315,029 $ 319,628 |
Summary of Contract Liabilities and its Changes | The following table shows the amount of contract liabilities on our consolidated balance sheets as of September 30, 2020 and 2019 (in thousands): September 30, Contracts Balance Sheet Classification 2020 2019 Gift cards Accrued liabilities $ 5,066 $ 4,558 Rewards loyalty program Accrued liabilities 8,881 8,308 Total liability $ 13,947 $ 12,866 Changes to our contract liabilities for fiscal year 2020 were as follows (in thousands): September 30, 2019 $ 12,866 Loyalty points and gift cards issued but not redeemed, net of estimated breakage 10,198 Revenue recognized from beginning liability (9,117 ) September 30, 2020 $ 13,947 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities and other fair value disclosures by fair value hierarchy | Fair value on recurring basis Consistent with the fair value hierarchy, we categorized our financial assets and liabilities as follows (in thousands): As of September 30, Classification Pricing Category 2020 2019 Financial Assets Cash equivalents Cash and cash equivalents Level 1 $ 194,612 $ — Interest rate caps Other assets Level 2 27 344 Total assets $ 194,639 $ 344 Financial Liabilities None Cash equivalents, at September 30, 2020, consist of highly liquid investments which mature daily and are valued using unadjusted quoted market prices for such securities. The fair value for interest rate caps were measured using widely accepted valuation techniques, such as discounted cash flow analyses, and observable inputs, such as market interest rates. Other fair value disclosures Carrying amounts and the related estimated fair value of our long-term debt, excluding capital lease obligations, are as follows: As of September 30, 2020 2019 Pricing Category Carrying Value Fair Value Carrying Value Fair Value Long-term debt Senior notes Level 1 1,177,380 1,217,707 $ 885,296 $ 898,814 Other long-term debt Level 2 635,788 619,397 724,000 709,830 Total debt $ 1,813,168 $ 1,837,104 $ 1,609,296 $ 1,608,644 |
Accumulated Stockholders' Equ_2
Accumulated Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Schedule of Shares Repurchased and Subsequently Retired | Information related to our shares repurchased and subsequently retired were as follows (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Number of shares repurchased 4,702 3,562 9,987 Total cost of share repurchased $ 61,357 $ 46,621 $ 165,902 |
Schedule of changes in accumulated other comprehensive loss | The change in accumulated other comprehensive loss (“AOCL”) was as follows (in thousands): Foreign Currency Translation Adjustments Interest Rate Caps Foreign Exchange Contracts Total Balance at September 30, 2018 $ (91,356 ) $ 1,365 $ — $ (89,991 ) Other comprehensive loss before reclassifications, net of tax (22,576 ) (6,167 ) (869 ) (29,612 ) Reclassification to net earnings, net of tax - 1,601 715 2,316 Balance at September 30, 2019 (113,932 ) (3,201 ) (154 ) (117,287 ) Other comprehensive income (loss) before reclassifications, net of tax 11,821 (411 ) (531 ) 10,879 Reclassification to net earnings, net of tax — 609 1,096 1,705 Balance at September 30, 2020 $ (102,111 ) $ (3,003 ) $ 411 $ (104,703 ) |
Weighted-Average Shares (Tables
Weighted-Average Shares (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | The following table sets forth the computations of basic and diluted earnings per share (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Weighted-average basic shares 113,881 119,636 123,190 Dilutive securities: Stock option and stock award programs 799 647 642 Weighted-average diluted shares 114,680 120,283 123,832 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of total compensation cost charged against income | The following table presents total compensation cost for all share-based compensation arrangements, and the related income tax benefits recognized in our consolidated statement of earnings (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Share-based compensation expense $ 8,426 $ 9,180 $ 10,519 Income tax benefit related to share-based compensation expense $ 2,059 $ 2,357 $ 3,013 |
Summary of activity for performance based unit awards assuming 100% payout | Performance Awards Number of Shares (in Weighted Average Fair Value Per Share Unvested at September 30, 2019 411 $ 18.83 Granted 259 16.65 Vested — — Forfeited (128 ) 21.91 Unvested at September 30, 2020 542 $ 17.06 |
Summary of activity for stock option awards | Number of Outstanding Options (in Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in Thousands) Outstanding at September 4,902 $ 22.08 5.8 $ 670 Granted 1,027 16.65 Exercised (205 ) 14.53 Forfeited or expired (986 ) 23.58 Outstanding at September 30, 2020 4,738 $ 20.92 6.2 $ - Exercisable at September 30, 2020 3,509 $ 22.32 5.3 $ - |
Schedule of weighted average assumptions for valuation of stock options using the Black-Scholes option pricing model | Fiscal Year Ended September 30, 2020 2019 2018 Expected life (in years) 5.0 5.0 5.0 Expected volatility for the Company’s common stock 35.8 % 30.5 % 27.4 % Risk-free interest rate 1.7 % 3.0 % 2.1 % Dividend yield 0.0 % 0.0 % 0.0 % |
Restricted Stock Awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of the activity for restricted stock awards/units | Restricted Stock Awards Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2019 262 $ 17.53 Granted 357 16.05 Vested (149 ) 17.51 Forfeited (51 ) 17.18 Unvested at September 30, 2020 419 $ 16.32 |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of the activity for restricted stock awards/units | Restricted Stock Units Number of Shares (in Thousands) Weighted Average Fair Value Per Share Unvested at September 30, 2019 — $ — Granted 108 16.49 Vested — — Forfeited (17 ) 16.65 Unvested at September 30, 2020 91 $ 16.47 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Summary of Operating and Finance Leases | Our operating and finance leases consisted of the following (in thousands): Balance Sheet Classification September 30, 2020 Assets: Operating lease Operating lease assets $ 525,634 Finance lease Property and equipment, net 2,888 Total lease assets $ 528,522 Liabilities: Current: Operating lease Current operating lease liabilities $ 153,267 Finance lease Current maturities of long-term debt 180 Long-term: Operating lease Long-term operating lease liabilities 394,375 Finance lease Long-term debt 684 Total lease liabilities $ 548,506 |
Summary of Lease Costs, Net of Immaterial Sublease Income | Our lease costs, net of immaterial sublease income, consisted of the following (in thousands): Statement of Earnings (Loss) Classification Fiscal Year Ended September 30, 2020 Operating lease costs (a) Cost of goods sold and selling, general and administrative expenses (b) $ 192,484 Finance lease costs: Amortization of leased assets Selling, general and administrative expenses 303 Interest on lease liabilities Interest expense 36 Variable lease costs (c) Selling, general and administrative expenses 45,191 Total lease costs $ 238,014 (a) Includes costs related to short-term leases, which are immaterial. (b) Certain supply chain-related amounts are included in cost of goods sold. (c) Includes common area maintenance, real estate taxes and insurance related to leases. |
Summary of Future Lease Payments | As of September 30, 2020, the approximate future lease payments under our leases under ASC 842, Leases Fiscal Year Operating leases Finance leases 2021 $ 170,522 $ 193 2022 131,701 192 2023 95,956 192 2024 66,164 192 2025 42,216 160 Thereafter 95,944 — Total undiscounted lease payments 602,503 929 Less: imputed interest 54,861 65 Present value of lease liabilities $ 547,642 $ 864 |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | As of September 30, 2019, our future minimum lease payments under non-cancelable operating leases as reported under the previous accounting standard, ASC 840, Leases Fiscal Year 2020 $ 174,578 2021 136,900 2022 95,918 2023 61,944 2024 33,803 Thereafter 40,545 $ 543,688 |
Summary of Other Lease Information | Other lease information is as follows (dollars in thousands): Fiscal Year Ended September 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows – operating leases $ 183,808 Operating cash flows – finance leases 36 Financing cash flows – finance leases 34 Supplemental non-cash information on lease liabilities: Lease assets obtained in exchange for new operating lease liabilities $ 204,245 Lease assets obtained in exchange for new finance lease liabilities 4 September 30, 2020 Weighted-average remaining lease term (in years): Operating leases 5.1 Finance leases 3.8 Weighted-average discount rate: Operating leases 4.4 % Finance leases 0.3 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amounts of goodwill | The changes in the carrying amounts of goodwill during the fiscal years 2020 and 2019 are as follows (in thousands): SBS BSG Total Balance at September 30, 2018 $ 81,217 $ 454,708 $ 535,925 Acquisitions 284 — 284 Foreign currency translation (4,596 ) (827 ) (5,423 ) Balance at September 30, 2019 $ 76,905 $ 453,881 $ 530,786 Acquisitions — 5,342 5,342 Foreign currency translation 4,281 (371 ) 3,910 Balance at September 30, 2020 $ 81,186 $ 458,852 $ 540,038 |
Schedule of other intangible assets, excluding goodwill | The following table reflects our other intangible assets, excluding goodwill, on our consolidated balance sheets. Once an intangible becomes fully amortized, the original cost and accumulated amortization is removed in the subsequent period. In the table b elow, prior year amounts for definite-lived intangible assets have been conformed to the current year’s presentation. As of September 30, 2020 and 2019 , we had the following (in thousands): September 30, 2020 September 30, 2019 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Definite-lived Intangible assets: Customer relationships $ 47,787 $ (38,876 ) $ 8,911 $ 43,752 $ (33,192 ) $ 10,560 Distribution rights 24,509 (21,570 ) 2,939 33,364 (27,477 ) 5,887 Other intangible assets 5,300 (3,045 ) 2,255 6,457 (3,946 ) 2,511 Total definite-lived intangible assets 77,596 (63,491 ) 14,105 83,573 (64,615 ) 18,958 Indefinite-lived Intangible assets: Trade names 44,178 — 44,178 43,093 — 43,093 Total intangible assets, excluding goodwill, net $ 121,774 $ (63,491 ) $ 58,283 $ 126,666 $ (64,615 ) $ 62,051 |
Schedule of expected future amortization expense related to definite-lived intangible assets | As of September 30, 2020, the expected future amortization expense related to definite-lived intangible assets is as follows (in thousands): Fiscal Year: 2021 $ 5,820 2022 3,432 2023 2,241 2024 1,303 2025 839 Thereafter 470 $ 14,105 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): September 30, 2020 2019 Compensation and benefits $ 54,749 $ 63,005 Interest payable 29,048 17,951 Deferred revenue 16,728 18,165 Rental obligations 8,964 11,670 Insurance reserves 4,796 4,567 Property and other taxes 4,109 3,869 Operating accruals and other 52,271 49,827 Total accrued liabilities $ 170,665 $ 169,054 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Summary of long-term debt | Short-term Debt In July 2017, we entered into an amended and restated $500 million, five-year On April 15, 2020, we entered into an amendment to our ABL facility to, among other things, increased the revolving commitment thereunder from $500.0 million to $600.0 million, established a FILO (first-in, last-out) tranche of indebtedness in the amount of $20.0 million, increased pricing on the revolving loans and modified certain covenant and reporting terms. The ABL facility continues to be secured by a first-priority lien in and upon the accounts and inventory (and the proceeds thereof) of the Company and its guarantor subsidiaries. The ABL facility is also secured by a second-priority lien in and upon the remaining assets of the Company and its guarantor subsidiaries. At September 30, 2020 and 2019, we did not have any outstanding borrowing under the ABL facility. At September 30, 2020, we had $435.0 million available for borrowing under the ABL facility. Long-term Debt Long-term debt consists of the following (dollars in thousands): September 30, 2020 2019 Interest Rates Term loan B: Variable-rate tranche 422,625 424,000 LIBOR plus 2.25% Fixed-rate tranche 213,163 300,000 4.500% Senior notes due Nov. 2023 197,419 197,419 5.500% Senior notes due Apr. 2025 300,000 - 8.750% Senior notes due Dec. 2025 679,961 687,877 5.625% Total $ 1,813,168 $ 1,609,296 Plus: capital lease obligations 864 832 Less: unamortized debt issuance costs and discount, net 16,955 15,585 Total debt $ 1,797,077 $ 1,594,543 Less: current maturities 180 1 Total long-term debt $ 1,796,897 $ 1,594,542 |
Schedule of maturities of debt | Maturities of our debt, excluding capital leases, are as follows at September 30, 2020 (in thousands): Fiscal Year: 2021-2023 $ — 2024 833,207 2025 300,000 Thereafter 679,961 Total $ 1,813,168 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes for the fiscal years 2020, 2019 and 2018 consists of the following (in thousands): Fiscal Year Ended September 30, 2020 2019 2018 Current: Federal $ 22,282 $ 59,855 $ 68,608 Foreign 6,120 10,132 11,039 State 4,730 15,339 11,344 Total current portion 33,132 85,326 90,991 Deferred: Federal 10,177 4,905 (26,001 ) Foreign 1,321 (1,498 ) 1,868 State 2,092 1,808 3,522 Total deferred portion 13,590 5,215 (20,611 ) Total provision for income taxes $ 46,722 $ 90,541 $ 70,380 |
Schedule of the difference between U.S. statutory federal income tax rate and the effective income tax rate | The difference between the U.S. statutory federal income tax rate and the effective income tax rate is summarized below: Fiscal Year Ended September 30, 2020 2019 2018 U.S. federal statutory income tax rate 21.0 % 21.0 % 24.5 % State income taxes, net of federal tax benefit 3.4 3.4 3.2 Effect of foreign operations (0.4 ) 0.2 — Foreign valuation allowances 4.6 (0.2 ) 0.6 Tax law change - GILTI (1.0 ) — — Deferred tax revaluation, including adoption of income tax method changes — — (11.5 ) Deemed repatriation tax 0.2 (0.3 ) 3.6 Share-based payment awards 1.2 0.6 0.5 Other, net 0.2 0.3 0.5 Effective tax rate 29.2 % 25.0 % 21.4 % |
Schedule of the tax effects of temporary differences that give rise to the Company's deferred tax assets and liabilities | The tax effects of temporary differences that give rise to our deferred tax assets and liabilities are as follows (in thousands): September 30, 2020 2019 Deferred tax assets attributable to: Foreign loss carryforwards $ 35,091 $ 27,097 Accrued liabilities 8,871 12,568 Share-based compensation expense 8,988 9,494 U.S. foreign tax credits 11,199 8,807 U.S. federal social security tax deferral 4,038 — Inventory adjustments 2,131 1,242 Other 1,101 651 Total deferred tax assets 71,419 59,859 Valuation allowance (50,543 ) (38,287 ) Total deferred tax assets, net 20,876 21,572 Deferred tax liabilities attributable to: Depreciation and amortization 107,672 94,920 Net deferred tax liability $ 86,796 $ 73,348 |
Schedule of changes in the amount of unrecognized tax benefits | The changes in the amount of unrecognized tax benefits are as follows (in thousands): Fiscal Year Ended September 30, 2020 2019 Balance at beginning of the fiscal year $ 2,000 $ 1,368 Increases related to prior year tax positions — — Decreases related to prior year tax positions (4 ) (4 ) Increases related to current year tax positions 250 954 Lapse of statute (193 ) (318 ) Balance at end of fiscal year $ 2,053 $ 2,000 |
Segments and Disaggregated Re_2
Segments and Disaggregated Revenue (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment data | Segment data for the fiscal years 2020, 2019 and 2018 are as follows (in thousands): 2020 2019 2018 Net sales (for the fiscal year indicated): SBS $ 2,080,703 $ 2,293,094 $ 2,333,838 BSG 1,433,627 1,583,317 1,598,727 Total $ 3,514,330 $ 3,876,411 $ 3,932,565 Earnings before provision for income taxes: Segment operating earnings: SBS $ 237,588 $ 366,412 $ 362,853 BSG 194,206 239,572 240,225 Segment operating earnings 431,794 605,984 603,078 Unallocated expenses 159,009 148,193 142,874 Restructuring 14,025 (682 ) 33,615 Consolidated operating earnings 258,760 458,473 426,589 Interest expense 98,793 96,309 98,162 Earnings before provision for income taxes $ 159,967 $ 362,164 $ 328,427 Depreciation and amortization: SBS $ 65,207 $ 65,561 $ 64,017 BSG 29,324 28,568 29,733 Corporate 12,248 13,529 15,079 Total $ 106,779 $ 107,658 $ 108,829 Payments for property and equipment: SBS $ 73,130 $ 69,802 $ 46,289 BSG 27,338 18,997 16,598 Corporate 10,390 18,956 23,620 Total $ 110,858 $ 107,755 $ 86,507 Total assets (as of September 30): SBS $ 1,370,745 $ 973,304 $ 995,546 BSG 1,106,801 1,012,336 993,122 Sub-total 2,477,546 1,985,640 1,988,668 Corporate 417,601 112,806 108,746 Total $ 2,895,147 $ 2,098,446 $ 2,097,414 |
Schedule of geographic area information | Certain geographic data is as follows (in thousands): 2020 2019 2018 Net sales (for the fiscal year indicated): United States $ 2,914,171 $ 3,169,821 $ 3,188,993 Other countries 600,159 706,590 743,572 Total $ 3,514,330 $ 3,876,411 $ 3,932,565 Long-lived assets (as of September 30): United States $ 264,936 $ 259,815 $ 234,475 United Kingdom 20,183 24,476 29,493 Other countries 29,910 35,337 44,389 Total $ 315,029 $ 319,628 $ 308,357 |
Schedule of disaggregation of segment revenues by merchandise category and sales channels | The following tables disaggregate our segment revenues by merchandise category: Fiscal Year Ended September 30, SBS 2020 2019 2018 Hair color 33.0 % 29.4 % 26.9 % Hair care 18.9 % 20.4 % 20.9 % Skin and nail care 14.3 % 14.8 % 15.7 % Styling tools 12.8 % 13.5 % 13.9 % Salon supplies and accessories 8.1 % 6.6 % 7.1 % Textured hair 5.8 % 7.1 % 7.5 % Other beauty items 7.1 % 8.2 % 8.0 % Total 100.0 % 100.0 % 100.0 % Fiscal Year Ended September 30, BSG 2020 2019 2018 Hair color 40.6 % 39.5 % 38.4 % Hair care 35.0 % 35.1 % 33.7 % Skin and nail care 8.0 % 8.1 % 8.7 % Styling tools 6.2 % 3.4 % 3.9 % Other beauty items 3.4 % 6.3 % 6.7 % Promotional items 6.8 % 7.6 % 8.6 % Total 100.0 % 100.0 % 100.0 % The following table disaggregates our segment revenue by sales channels: SBS BSG Fiscal Year Ended September 30, Fiscal Year Ended September 30, 2020 2019 2018 2020 2019 2018 Company-operated stores 91.8 % 96.9 % 97.5 % 68.9 % 69.4 % 68.7 % E-commerce 8.0 % 2.8 % 2.2 % 8.7 % 4.8 % 3.7 % Franchise stores 0.2 % 0.3 % 0.3 % 7.1 % 7.6 % 7.7 % Distributor sales consultants — — — 15.3 % 18.2 % 19.9 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % |
Separate Financial Informatio_2
Separate Financial Information of Guarantor Subsidiaries (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Guarantor And Non Guarantor Condensed Consolidated Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet September 30, 2020 (In thousands) Parent Sally Holdings and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 194,622 $ 217,865 $ 101,664 $ — $ 514,151 Trade and other accounts receivable, net — — 29,637 26,792 — 56,429 Due from affiliates — — 3,015,299 — (3,015,299 ) — Inventory — — 615,092 199,411 — 814,503 Other current assets 6,908 132 26,103 14,871 — 48,014 Property and equipment, net 6 — 263,381 51,642 — 315,029 Operating lease assets — — 392,863 132,771 — 525,634 Investment in subsidiaries 1,756,347 4,582,915 390,579 — (6,729,841 ) — Goodwill and other intangible assets, net — — 449,802 148,519 — 598,321 Other assets 1,431 3,104 5,059 13,472 — 23,066 Total assets $ 1,764,692 $ 4,780,773 $ 5,405,680 $ 689,142 $ (9,745,140 ) $ 2,895,147 Liabilities and Stockholders’ Equity (Deficit) Accounts payable $ 36 $ — $ 183,088 $ 53,209 $ — $ 236,333 Due to affiliates 1,742,661 1,196,746 — 75,892 (3,015,299 ) — Accrued liabilities 205 29,165 110,165 31,130 — 170,665 Income taxes payable 419 2,302 — 196 — 2,917 Long-term debt — 1,796,213 2 862 — 1,797,077 Operating lease liabilities — — 413,685 133,957 — 547,642 Other liabilities 5,928 — 26,889 159 — 32,976 Deferred income tax liabilities, net — — 88,936 3,158 — 92,094 Total liabilities 1,749,249 3,024,426 822,765 298,563 (3,015,299 ) 2,879,704 Total stockholders’ equity (deficit) 15,443 1,756,347 4,582,915 390,579 (6,729,841 ) 15,443 Total liabilities and stockholders’ equity (deficit) $ 1,764,692 $ 4,780,773 $ 5,405,680 $ 689,142 $ (9,745,140 ) $ 2,895,147 Condensed Consolidating Balance Sheet September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Assets Cash and cash equivalents $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Trade and other accounts receivable, net — — 65,746 38,793 — 104,539 Due from affiliates — — 2,878,072 — (2,878,072 ) — Inventory — — 722,830 230,077 — 952,907 Other current assets 1,436 132 22,480 10,564 — 34,612 Property and equipment, net 6 — 258,132 61,490 — 319,628 Investment in subsidiaries 1,621,843 4,374,334 385,629 — (6,381,806 ) — Goodwill and other intangible assets, net — — 452,645 140,192 — 592,837 Other assets 1,446 3,499 (581 ) 18,064 — 22,428 Total assets $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 Liabilities and Stockholders’ Equity (Deficit) Accounts payable $ 48 $ — $ 235,940 $ 42,700 $ — $ 278,688 Due to affiliates 1,672,322 1,142,324 — 63,426 (2,878,072 ) — Accrued liabilities 188 17,937 121,375 29,554 — 169,054 Income taxes payable 6,055 2,161 1 119 — 8,336 Long-term debt — 1,593,710 1 832 — 1,594,543 Other liabilities 6,441 — 17,639 3,677 — 27,757 Deferred income tax liabilities, net — — 76,672 3,719 — 80,391 Total liabilities 1,685,054 2,756,132 451,628 144,027 (2,878,072 ) 2,158,769 Total stockholders’ equity (deficit) (60,323 ) 1,621,843 4,374,334 385,629 (6,381,806 ) (60,323 ) Total liabilities and stockholders’ equity (deficit) $ 1,624,731 $ 4,377,975 $ 4,825,962 $ 529,656 $ (9,259,878 ) $ 2,098,446 |
Schedule of Condensed Consolidating Statement of Earnings and Comprehensive Income | Condensed Consolidating Statement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2020 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 2,883,265 $ 631,065 $ — $ 3,514,330 Related party sales — — 1,761 — (1,761 ) — Cost of goods sold — — 1,447,705 352,792 (1,761 ) 1,798,736 Gross profit — — 1,437,321 278,273 — 1,715,594 Selling, general and administrative expenses 11,501 753 1,152,489 278,066 — 1,442,809 Restructuring — — 14,025 — — 14,025 Operating earnings (loss) (11,501 ) (753 ) 270,807 207 — 258,760 Interest expense (income) — 98,998 (131 ) (74 ) — 98,793 Earnings (loss) before provision for income taxes (11,501 ) (99,751 ) 270,938 281 — 159,967 Provision (benefit) for income taxes (2,901 ) (25,476 ) 70,840 4,259 — 46,722 Equity (loss) in earnings of subsidiaries, net of tax 121,845 196,120 (3,978 ) — (313,987 ) — Net earnings (loss) 113,245 121,845 196,120 (3,978 ) (313,987 ) 113,245 Other comprehensive income, net of tax — 198 — 12,386 — 12,584 Total comprehensive income $ 113,245 $ 122,043 $ 196,120 $ 8,408 $ (313,987 ) $ 125,829 Condensed Consolidating Stat ement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,131,360 $ 745,051 $ — $ 3,876,411 Related party sales — — 2,201 — (2,201 ) — Cost of goods sold — — 1,568,663 399,407 (2,201 ) 1,965,869 Gross profit — — 1,564,898 345,644 — 1,910,542 Selling, general and administrative expenses 11,331 607 1,135,926 304,887 — 1,452,751 Restructuring — — (682 ) — — (682 ) Operating earnings (loss) (11,331 ) (607 ) 429,654 40,757 — 458,473 Interest expense (income) — 96,464 5 (160 ) — 96,309 Earnings (loss) before provision for income taxes (11,331 ) (97,071 ) 429,649 40,917 — 362,164 Provision (benefit) for income taxes (2,742 ) (24,888 ) 109,230 8,941 — 90,541 Equity in earnings of subsidiaries, net of tax 280,212 352,395 31,976 — (664,583 ) — Net earnings 271,623 280,212 352,395 31,976 (664,583 ) 271,623 Other comprehensive loss, net of tax — (4,566 ) — (22,730 ) — (27,296 ) Total comprehensive income $ 271,623 $ 275,646 $ 352,395 $ 9,246 $ (664,583 ) $ 244,327 Condensed Consolidating Stat ement of Earnings and Comprehensive Income Fiscal Year Ended September 30, 2018 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net sales $ — $ — $ 3,152,120 $ 780,445 $ — $ 3,932,565 Related party sales — — 2,294 — (2,294 ) — Cost of goods sold — — 1,581,385 409,061 (2,294 ) 1,988,152 Gross profit — — 1,573,029 371,384 — 1,944,413 Selling, general and administrative expenses 10,957 1,538 1,136,312 335,402 — 1,484,209 Restructuring — — 33,615 — — 33,615 Operating earnings (loss) (10,957 ) (1,538 ) 403,102 35,982 — 426,589 Interest expense — 98,332 (3 ) (167 ) — 98,162 Earnings (loss) before provision for income taxes (10,957 ) (99,870 ) 403,105 36,149 — 328,427 Provision (benefit) for income taxes (2,734 ) (28,787 ) 73,747 28,154 — 70,380 Equity in earnings of subsidiaries, net of tax 266,270 337,353 7,995 — (611,618 ) — Net earnings 258,047 266,270 337,353 7,995 (611,618 ) 258,047 Other comprehensive income (loss), net of tax — 2,449 — (10,604 ) — (8,155 ) Total comprehensive income $ 258,047 $ 268,719 $ 337,353 $ (2,609 ) $ (611,618 ) $ 249,892 |
Schedule of Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ (11,769 ) $ (58,166 ) $ 417,940 $ 78,884 $ — $ 426,889 Cash Flows from Investing Activities: Payments for property and equipment, net (5 ) — (98,379 ) (12,421 ) — (110,805 ) Acquisitions, net of cash acquired — — (5,479 ) (7,491 ) — (12,970 ) Due from affiliates — — (137,227 ) — 137,227 — Net cash used by investing activities (5 ) — (241,085 ) (19,912 ) 137,227 (123,775 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 1,087,500 4 — — 1,087,504 Repayments of long-term debt — (882,887 ) (3 ) (31 ) — (882,921 ) Debt issuance cost — (6,257 ) — — — (6,257 ) Payments for common stock repurchased (61,357 ) — — — — (61,357 ) Proceeds from exercises of stock options 2,792 — — — — 2,792 Due to affiliates 70,339 54,422 — 12,466 (137,227 ) — Net cash provided by financing activities 11,774 252,778 1 12,435 (137,227 ) 139,761 Effect of foreign exchange rate changes on cash and cash equivalents — — — (219 ) — (219 ) Net increase in cash and cash equivalents — 194,612 176,856 71,188 — 442,656 Cash and cash equivalents, beginning of period — 10 41,009 30,476 — 71,495 Cash and cash equivalents, end of period $ — $ 194,622 $ 217,865 $ 101,664 $ — $ 514,151 Condensed Consolidating Statement of Cash Flows September 30, 2019 (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 2,364 $ (70,150 ) $ 373,313 $ 14,888 $ — $ 320,415 Cash Flows from Investing Activities: Payments for property and equipment, net (1 ) — (79,379 ) (13,063 ) — (92,443 ) Acquisitions, net of cash acquired — — (2,584 ) (840 ) — (3,424 ) Due from affiliates — — (279,391 ) — 279,391 — Net cash used by investing activities (1 ) — (361,354 ) (13,903 ) 279,391 (95,867 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 593,500 4 — — 593,504 Repayments of long-term debt — (777,533 ) (4 ) (1 ) — (777,538 ) Payments for common stock repurchased (47,434 ) — — — — (47,434 ) Proceeds from exercises of stock options 2,160 — — — — 2,160 Due to affiliates 42,911 254,183 — (17,703 ) (279,391 ) — Net cash provided (used) by financing activities (2,363 ) 70,150 — (17,704 ) (279,391 ) (229,308 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (1,040 ) — (1,040 ) Net increase (decrease) in cash and cash equivalents — — 11,959 (17,759 ) — (5,800 ) Cash and cash equivalents, beginning of period — 10 29,050 48,235 — 77,295 Cash and cash equivalents, end of period $ — $ 10 $ 41,009 $ 30,476 $ — $ 71,495 Condensed Consolidating Statement of Cash Flows (In thousands) Parent Sally Holdings LLC and Sally Capital Inc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Eliminations Sally Beauty Holdings, Inc. and Subsidiaries Net cash provided (used) by operating activities $ 23,424 $ (62,948 ) $ 384,958 $ 27,227 $ — $ 372,661 Cash Flows from Investing Activities: Payments for property and equipment, net — — (68,689 ) (17,449 ) — (86,138 ) Acquisitions, net of cash acquired — — — (9,175 ) — (9,175 ) Due from affiliates — — (309,310 ) — 309,310 — Net cash used by investing activities — — (377,999 ) (26,624 ) 309,310 (95,313 ) Cash Flows from Financing Activities: Proceeds from issuance of long-term debt — 461,814 5 — — 461,819 Repayments of long-term debt — (558,000 ) (4 ) (595 ) — (558,599 ) Debt issuance cost — (1,151 ) — — — (1,151 ) Payments for common stock repurchased (166,701 ) — — — — (166,701 ) Proceeds from exercises of stock options 1,350 — — — — 1,350 Due to affiliates 141,927 160,285 — 7,098 (309,310 ) — Net cash provided (used) by financing activities (23,424 ) 62,948 1 6,503 (309,310 ) (263,282 ) Effect of foreign exchange rate changes on cash and cash equivalents — — — (530 ) — (530 ) Net increase in cash and cash equivalents — — 6,960 6,576 — 13,536 Cash and cash equivalents, beginning of period — 10 22,090 41,659 — 63,759 Cash and cash equivalents, end of period $ — $ 10 $ 29,050 $ 48,235 $ — $ 77,295 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Summary of restructuring expense and gains | Restructuring expense and gains for the fiscal years ended September 30, 2020, 2019 and 2018, are as follows (in thousands): 2020 2019 2018 Project Surge $ 1,511 $ — $ — Transformation Plan 12,514 (682 ) 33,615 Total expense (gain) $ 14,025 $ (682 ) $ 33,615 |
Project Surge | |
Schedule of restructuring | The liability related to Project Surge, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): Project Surge Liability at September 30, 2019 Expenses Cash Payments Adjustments Liability at September 30, 2020 Workforce reductions $ — $ 1,149 $ 1,149 $ — $ — Facility closures — — — — — Other — 362 362 — — Total $ — $ 1,511 $ 1,511 $ — $ — |
Supply Chain Modernization | |
Schedule of restructuring | The liability related to the Transformation Plan, which is included in accrued liabilities on our consolidated balance sheets, is as follows (in thousands): Transformation Plan Liability at September 30, 2019 Expenses Cash Payments Adjustments Liability at September 30, 2020 Workforce reductions $ 654 $ 6,550 $ 7,139 $ — $ 65 Consulting 204 1,425 1,629 — — Other 70 4,539 4,609 — — Total $ 928 $ 12,514 $ 13,377 $ — $ 65 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of selected unaudited quarterly consolidated statement of earnings data | Certain unaudited quarterly consolidated statement of earnings information for the fiscal years ended September 30, 2020 and 2019 is summarized below (in thousands, except per share data): 1 st 2 nd 3 rd 4 th Fiscal Year Quarter Quarter Quarter Quarter 2020: Net sales $ 980,208 $ 871,023 $ 705,287 $ 957,812 Gross profit $ 474,848 $ 429,757 $ 321,846 $ 489,143 Net earnings (loss) $ 53,215 $ 13,368 $ (23,526 ) $ 70,188 Earnings (loss) per share (a) Basic $ 0.46 $ 0.12 $ (0.21 ) $ 0.63 Diluted $ 0.45 $ 0.12 $ (0.21 ) $ 0.62 2019: Net sales $ 989,453 $ 945,852 $ 975,169 $ 965,937 Gross profit $ 480,705 $ 468,324 $ 482,222 $ 479,291 Net earnings $ 65,727 $ 65,725 $ 71,164 $ 69,007 Earnings per share (a) Basic $ 0.55 $ 0.55 $ 0.59 $ 0.58 Diluted $ 0.54 $ 0.54 $ 0.59 $ 0.58 (a) The sum of the quarterly earnings per share may not equal the full year amount due to rounding of the calculated amounts. |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Trade Accounts Receivable and Accounts Receivable, Other | |||
Allowance for Doubtful Accounts | $ 1.9 | $ 1.7 | |
Selling, general and administrative expenses | |||
Property Plant and Equipment | |||
Depreciation expense | $ 95.5 | $ 96.1 | $ 97.2 |
Significant Accounting Polici_5
Significant Accounting Policies - Lease Accounting (Details) $ in Millions | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Leases [Line Items] | |
Lease extended term | five years |
Selling, general and administrative expenses | |
Leases [Line Items] | |
Impairment on operating lease assets and lease hold improvements | $ 1.9 |
Minimum | |
Leases [Line Items] | |
Lease term | 5 years |
Maximum | |
Leases [Line Items] | |
Lease term | 10 years |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Property and Equipment Balances and Estimated Useful Lives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | $ 1,009,738 | $ 978,913 | |
Accumulated depreciation and amortization | (694,709) | (659,285) | |
Total property and equipment, net | 315,029 | 319,628 | $ 308,357 |
Land | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | 10,120 | 10,061 | |
Buildings and building improvements | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | 54,521 | 53,132 | |
Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | 304,404 | 281,195 | |
Furniture, fixtures and equipment | |||
Property Plant And Equipment [Line Items] | |||
Total property and equipment, gross | $ 640,693 | $ 634,525 | |
Minimum | Buildings and building improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Minimum | Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 2 years | ||
Minimum | Furniture, fixtures and equipment | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 2 years | ||
Maximum | Buildings and building improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 40 years | ||
Maximum | Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 10 years | ||
Maximum | Furniture, fixtures and equipment | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful lives | 10 years |
Significant Accounting Polici_7
Significant Accounting Policies - Goodwill and Indefinite-lived Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Indefinite-lived Intangible Assets | |||
Impairment losses in connection with the goodwill | $ 0 | $ 0 | $ 0 |
Impairment of intangible assets with indefinite lives | $ 0 | $ 0 | $ 0 |
Significant Accounting Polici_8
Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Revenue recognition payment terms | 30 days |
Significant Accounting Polici_9
Significant Accounting Policies - Summary of Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Contract With Customer Liability [Line Items] | ||
Total liability | $ 13,947 | $ 12,866 |
Gift Cards | Accrued Liabilities | ||
Contract With Customer Liability [Line Items] | ||
Total liability | 5,066 | 4,558 |
Rewards Loyalty Program | Accrued Liabilities | ||
Contract With Customer Liability [Line Items] | ||
Total liability | $ 8,881 | $ 8,308 |
Significant Accounting Polic_10
Significant Accounting Policies - Schedule of Changes to Contract Liabilities (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Contract With Customer Liability [Abstract] | |
Beginning balance | $ 12,866 |
Loyalty points and gift cards issued but not redeemed, net of estimated breakage | 10,198 |
Revenue recognized from beginning liability | (9,117) |
Ending balance | $ 13,947 |
Significant Accounting Polic_11
Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Advertising Costs | |||
Advertising costs | $ 72.7 | $ 73.3 | $ 83.4 |
Accounting Changes and Recent_3
Accounting Changes and Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Accounting Changes | ||
Operating lease liability | $ 547,642 | |
Operating lease asset | 525,634 | |
Accumulated earnings | 117,109 | $ 55,797 |
ASU 16-02 | ||
Accounting Changes | ||
Operating lease liability | 523,500 | |
Operating lease asset | 513,900 | |
Accumulated earnings | $ 100 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Long-term debt | ||
Long-term debt, Carrying Value | $ 1,813,168 | $ 1,609,296 |
Long-term debt, Fair Value | 1,837,104 | 1,608,644 |
Level 1 | Senior notes | ||
Long-term debt | ||
Long-term debt, Carrying Value | 1,177,380 | 885,296 |
Long-term debt, Fair Value | 1,217,707 | 898,814 |
Level 2 | Other Long-Term Debt | ||
Long-term debt | ||
Long-term debt, Carrying Value | 635,788 | 724,000 |
Long-term debt, Fair Value | 619,397 | 709,830 |
Fair value measurement on recurring basis | ||
Financial Assets | ||
Total assets | 194,639 | 344 |
Fair value measurement on recurring basis | Level 1 | Cash and cash equivalents | ||
Financial Assets | ||
Cash equivalents | 194,612 | |
Fair value measurement on recurring basis | Level 2 | Other assets | ||
Financial Assets | ||
Interest rate caps | $ 27 | $ 344 |
Accumulated Stockholders' Equ_3
Accumulated Stockholders' Equity (Deficit) - Share Repurchase Program (Details) - 2017 Share Repurchase program - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share Repurchase Program | ||||
Amount of shares authorized to be repurchased | $ 1,000,000,000 | |||
Term of share repurchase program | 4 years | |||
Stock repurchase program, expiration date | Sep. 30, 2021 | |||
Number of shares surrendered by grantees to satisfy personal income tax withholdings obligations upon vesting of equity-based awards | 159,000 | 209,000 | 177,595 | |
Shares surrendered by grantees to satisfy personal income tax withholdings obligations upon vesting of equity-based awards, value | $ 300,000 | $ 800,000 | $ 800,000 |
Accumulated Stockholders' Equ_4
Accumulated Stockholders' Equity (Deficit) - Schedule of Shares Repurchased and Subsequently Retired (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stockholders Equity Note [Abstract] | |||
Number of shares repurchased | 4,702 | 3,562 | 9,987 |
Total cost of share repurchased | $ 61,357 | $ 46,621 | $ 165,902 |
Accumulated Stockholders' Equ_5
Accumulated Stockholders' Equity (Deficit) - Change in AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | $ (60,323) | $ (268,556) |
Balance | 15,443 | (60,323) |
Interest rate caps | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (3,201) | 1,365 |
Other comprehensive income (loss) before reclassifications, net of tax | (411) | (6,167) |
Reclassification to net earnings, net of tax | 609 | 1,601 |
Balance | (3,003) | (3,201) |
Foreign exchange contracts | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (154) | |
Other comprehensive income (loss) before reclassifications, net of tax | (531) | (869) |
Reclassification to net earnings, net of tax | 1,096 | 715 |
Balance | 411 | (154) |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (113,932) | (91,356) |
Other comprehensive income (loss) before reclassifications, net of tax | 11,821 | (22,576) |
Balance | (102,111) | (113,932) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance | (117,287) | (89,991) |
Other comprehensive income (loss) before reclassifications, net of tax | 10,879 | (29,612) |
Reclassification to net earnings, net of tax | 1,705 | 2,316 |
Balance | $ (104,703) | $ (117,287) |
Weighted-Average Shares (Detail
Weighted-Average Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share Reconciliation: | |||
Weighted-average basic shares | 113,881 | 119,636 | 123,190 |
Dilutive securities: | |||
Stock option and stock award programs | 799 | 647 | 642 |
Weighted-average diluted shares | 114,680 | 120,283 | 123,832 |
Weighted-Average Shares - Addit
Weighted-Average Shares - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Common stock potentially outstanding but not included in the computation of diluted earnings per share | |||
Options to purchase shares not included in the computation of diluted earnings per share because the options were anti-dilutive (in shares) | 4.7 | 4.7 | 5.2 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Details) - $ / shares shares in Millions | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement, Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair value of awards | $ 5.66 | $ 5.86 | $ 4.84 |
Omnibus Plans | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares authorized to issues under share-based payments | 8 | ||
Restricted stock units, retention period | 6 months | ||
Omnibus Plans | Performance Unit Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair value of awards | $ 16.65 | $ 17.22 | $ 17.42 |
Performance period (in years) | 3 years | ||
Vesting period (in years) | 3 years | ||
Omnibus Plans | Performance Unit Awards | Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Percentage of earnings | 0.00% | 0.00% | 0.00% |
Omnibus Plans | Performance Unit Awards | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Percentage of earnings | 200.00% | 200.00% | 200.00% |
Omnibus Plans | Share-based Payment Arrangement, Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Expiration period | 10 years | ||
Omnibus Plans | Restricted Stock Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Omnibus Plans | Restricted Stock Units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period (in years) | 1 year |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Share-based compensation expense | $ 8,426 | $ 9,180 | $ 10,519 |
Income tax benefit related to share-based compensation expense | $ 2,059 | $ 2,357 | $ 3,013 |
Share-Based Payments - Performa
Share-Based Payments - Performance-Based Awards (Details) - Performance Unit Awards $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-Based Payments | |
Payout percentage (in percentage) | 100.00% |
Performance Unit Awards (in shares) | |
Unvested at the beginning of the period (in shares) | shares | 411 |
Granted (in shares) | shares | 259 |
Forfeited (in shares) | shares | (128) |
Unvested at the end of the period (in shares) | shares | 542 |
Performance Unit Awards (in dollars per share) | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 18.83 |
Granted (in dollars per share) | $ / shares | 16.65 |
Forfeited (in dollars per share) | $ / shares | 21.91 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 17.06 |
Compensation expense previously recorded in prior years | $ | $ 1.7 |
Share-Based Payments - Service-
Share-Based Payments - Service-Based Awards and Stock Option Awards (Details) - Stock Option Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Stock Options, Number of Outstanding Options | ||
Outstanding at the beginning of the period (in shares) | 4,902 | |
Granted (in shares) | 1,027 | |
Exercised (in shares) | (205) | |
Forfeited or expired (in shares) | (986) | |
Outstanding at the end of the period (in shares) | 4,738 | 4,902 |
Exercisable at the end of the period (in shares) | 3,509 | |
Stock Options, Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 22.08 | |
Granted (in dollars per share) | 16.65 | |
Exercised (in dollars per share) | 14.53 | |
Forfeited or expired (in dollars per share) | 23.58 | |
Outstanding at the end of the period (in dollars per share) | 20.92 | $ 22.08 |
Exercisable at the end of the period (in dollars per share) | $ 22.32 | |
Stock Options, Weighted Average Remaining Contractual Term | ||
Weighted average remaining contractual term (in years) | 6 years 2 months 12 days | 5 years 9 months 18 days |
Exercisable at September 30, 2020 | 5 years 3 months 18 days | |
Stock Options, Aggregate Intrinsic Value | ||
Outstanding balance at period end (in dollars) | $ 670 |
Share-Based Payments - Schedule
Share-Based Payments - Schedule of weighted average assumptions for valuation of stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Weighted average assumptions relating to the valuation of stock options | |||
Proceeds from exercises of stock options | $ 2,792 | $ 2,160 | $ 1,350 |
Stock Option Awards | |||
Weighted average assumptions relating to the valuation of stock options | |||
Expected life (in years) | 5 years | 5 years | 5 years |
Expected volatility for the Company’s common stock | 35.80% | 30.50% | 27.40% |
Risk-free interest rate | 1.70% | 3.00% | 2.10% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average fair value of the stock options issued (in dollars per share) | $ 5.66 | $ 5.86 | $ 4.84 |
Aggregate fair value of stock options | $ 2,700 | $ 5,100 | $ 7,700 |
Aggregate intrinsic value of options exercised | 500 | 900 | 1,300 |
Proceeds from exercises of stock options | 3,000 | 2,200 | 1,400 |
Tax benefit realized for the tax deductions of stock option exercises | 100 | $ 200 | $ 300 |
Total unrecognized compensation expenses related to unvested awards | $ 4,900 | ||
Weighted average period for recognition of unvested awards | 1 year 9 months 18 days |
Share-Based Payments - Restrict
Share-Based Payments - Restricted Stock Awards (Details) - Restricted Stock Awards $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Restricted stock (in shares) | |
Unvested at the beginning of the period (in shares) | shares | 262 |
Granted (in shares) | shares | 357 |
Vested (in shares) | shares | (149) |
Forfeited (in shares) | shares | (51) |
Unvested at the end of the period (in shares) | shares | 419 |
Restricted Stock (in dollars per share) | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 17.53 |
Granted (in dollars per share) | $ / shares | 16.05 |
Vested (in dollar per share) | $ / shares | 17.51 |
Forfeited (in dollars per share) | $ / shares | 17.18 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 16.32 |
Total unrecognized compensation expenses related to unvested awards | $ | $ 4.6 |
Weighted average period for recognition of unvested awards | 1 year 9 months 18 days |
Share-Based Payments - Restri_2
Share-Based Payments - Restricted Stock Units (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Restricted stock (in shares) | |
Granted (in shares) | shares | 108 |
Forfeited (in shares) | shares | (17) |
Unvested at the end of the period (in shares) | shares | 91 |
Restricted Stock (in dollars per share) | |
Granted (in dollars per share) | $ / shares | $ 16.49 |
Forfeited (in dollars per share) | $ / shares | 16.65 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 16.47 |
Total unrecognized compensation expenses related to unvested awards | $ | $ 0.2 |
Weighted average period for recognition of unvested awards | 1 month 6 days |
Leases - Summary of Operating a
Leases - Summary of Operating and Finance Leases (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Assets: | |
Operating lease assets | $ 525,634 |
Finance lease | $ 2,888 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet |
Total lease assets | $ 528,522 |
Current: | |
Current operating lease liabilities | 153,267 |
Finance lease | $ 180 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtCurrent |
Long-term: | |
Long-term operating lease liabilities | $ 394,375 |
Finance lease | $ 684 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtNoncurrent |
Total lease liabilities | $ 548,506 |
Leases - Summary of Lease Costs
Leases - Summary of Lease Costs, Net of Immaterial Sublease Income (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Lessee Lease Description [Line Items] | |
Total lease costs | $ 238,014 |
Cost of Goods Sold and Selling, General and Administrative Expenses | |
Lessee Lease Description [Line Items] | |
Operating lease costs | 192,484 |
Selling, General and Administrative Expenses | |
Lessee Lease Description [Line Items] | |
Amortization of leased assets | 303 |
Variable lease costs | 45,191 |
Interest Expense | |
Lessee Lease Description [Line Items] | |
Interest on lease liabilities | $ 36 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Leases [Line Items] | |
Operating lease liability | $ 547,642 |
Retail Stores | |
Leases [Line Items] | |
Operating lease liability | 11,100 |
COVID-19 | |
Leases [Line Items] | |
Benefit for rent abatements | $ 11,700 |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Operating leases | |
2021 | $ 170,522 |
2022 | 131,701 |
2023 | 95,956 |
2024 | 66,164 |
2025 | 42,216 |
Thereafter | 95,944 |
Total undiscounted lease payments | 602,503 |
Less: imputed interest | 54,861 |
Present value of lease liabilities | 547,642 |
Finance leases | |
2021 | 193 |
2022 | 192 |
2023 | 192 |
2024 | 192 |
2025 | 160 |
Total undiscounted lease payments | 929 |
Less: imputed interest | 65 |
Present value of lease liabilities | $ 864 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Fiscal Year | |
2020 | $ 174,578 |
2021 | 136,900 |
2022 | 95,918 |
2023 | 61,944 |
2024 | 33,803 |
Thereafter | 40,545 |
Total operating lease, future minimum payments due | $ 543,688 |
Leases - Summary of Other Lease
Leases - Summary of Other Lease Information (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows – operating leases | $ 183,808 |
Operating cash flows – finance leases | 36 |
Financing cash flows – finance leases | 34 |
Supplemental non-cash information on lease liabilities: | |
Lease assets obtained in exchange for new operating lease liabilities | 204,245 |
Lease assets obtained in exchange for new finance lease liabilities | $ 4 |
Weighted-average remaining lease term (in years): | |
Operating leases | 5 years 1 month 6 days |
Finance leases | 3 years 9 months 18 days |
Weighted-average discount rate: | |
Operating leases | 4.40% |
Finance leases | 0.30% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of changes in carrying amounts of goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | $ 530,786 | $ 535,925 |
Acquisitions | 5,342 | 284 |
Foreign currency translation | 3,910 | (5,423) |
Balance at the end of the period | 540,038 | 530,786 |
Sally Beauty Supply | ||
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | 76,905 | 81,217 |
Acquisitions | 284 | |
Foreign currency translation | 4,281 | (4,596) |
Balance at the end of the period | 81,186 | 76,905 |
Beauty Systems Group | ||
Change in the carrying amounts of goodwill | ||
Balance at the beginning of the period | 453,881 | 454,708 |
Acquisitions | 5,342 | |
Foreign currency translation | (371) | (827) |
Balance at the end of the period | $ 458,852 | $ 453,881 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of other intangible assets, excluding goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | $ 77,596 | $ 83,573 |
Definite-lived Intangible assets, Accumulated Amortization | (63,491) | (64,615) |
Definite-lived Intangible assets, Net | 14,105 | 18,958 |
Total intangible assets, excluding goodwill,Gross Carrying Amount | 121,774 | 126,666 |
Total intangible assets, excluding goodwill, Net | 58,283 | 62,051 |
Trade Names | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Indefinite-lived Intangible assets, Net | 44,178 | 43,093 |
Customer Relationships | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | 47,787 | 43,752 |
Definite-lived Intangible assets, Accumulated Amortization | (38,876) | (33,192) |
Definite-lived Intangible assets, Net | 8,911 | 10,560 |
Distribution Rights | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | 24,509 | 33,364 |
Definite-lived Intangible assets, Accumulated Amortization | (21,570) | (27,477) |
Definite-lived Intangible assets, Net | 2,939 | 5,887 |
Other Intangible Assets | ||
Indefinite and Finite Lived Intangible Assets by Major Class | ||
Definite-lived Intangible assets, Gross Carrying Amount | 5,300 | 6,457 |
Definite-lived Intangible assets, Accumulated Amortization | (3,045) | (3,946) |
Definite-lived Intangible assets, Net | $ 2,255 | $ 2,511 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Amortization expense | $ 9 | $ 11.3 | $ 11.7 |
Minimum | |||
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Definite-lived intangible assets, useful life | 3 years | ||
Maximum | |||
Indefinite and Finite Lived Intangible Assets by Major Class | |||
Definite-lived intangible assets, useful life | 10 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expected future amortization expense related to definite-lived intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Estimated future amortization expense related to intangible assets subject to amortization: | ||
2021 | $ 5,820 | |
2022 | 3,432 | |
2023 | 2,241 | |
2024 | 1,303 | |
2025 | 839 | |
Thereafter | 470 | |
Definite-lived Intangible assets, Net | $ 14,105 | $ 18,958 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Accrued Liabilities | ||
Compensation and benefits | $ 54,749 | $ 63,005 |
Interest payable | 29,048 | 17,951 |
Deferred revenue | 16,728 | 18,165 |
Rental obligations | 8,964 | 11,670 |
Insurance reserves | 4,796 | 4,567 |
Property and other taxes | 4,109 | 3,869 |
Operating accruals and other | 52,271 | 49,827 |
Total accrued liabilities | $ 170,665 | $ 169,054 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | |
Loss Contingencies [Line Items] | |||
Outstanding letters of credit | $ 18,600,000 | $ 18,000,000 | |
Data security incidents, remaining liability | $ 0 | $ 0 | |
Data security incidents | |||
Loss Contingencies [Line Items] | |||
Data security incident expenses | $ 7,900,000 |
Debt - Short-term Debt (Details
Debt - Short-term Debt (Details) - ABL facility - USD ($) | 1 Months Ended | ||||
Jul. 31, 2017 | Sep. 30, 2020 | Apr. 15, 2020 | Apr. 14, 2020 | Sep. 30, 2019 | |
Debt Instruments | |||||
Revolving credit facility | $ 500,000,000 | $ 0 | $ 600,000,000 | $ 500,000,000 | $ 0 |
Debt instrument term | 5 years | ||||
Debt instrument, maturity date | Jul. 6, 2022 | ||||
Line of credit facility, commitment fee percentage | 0.20% | ||||
Indebtedness amount | $ 20,000,000 | ||||
Revolving credit facility | $ 435,000,000 | ||||
Prime | Minimum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 0.25% | ||||
Prime | Maximum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 0.50% | ||||
LIBOR | Minimum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 1.25% | ||||
LIBOR | Maximum | |||||
Debt Instruments | |||||
Percentage points added to the reference rate | 1.50% |
Debt - Details of Long-term Deb
Debt - Details of Long-term Debt Table (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instruments | ||
Total | $ 1,813,168 | $ 1,609,296 |
Variable-rate tranche | ||
Debt Instruments | ||
Total | $ 422,625 | 424,000 |
Variable-rate tranche | LIBOR | ||
Debt Instruments | ||
Percentage points added to the reference rate | 2.25% | |
Fixed-rate tranche | ||
Debt Instruments | ||
Total | $ 213,163 | 300,000 |
Interest rate (as a percent) | 4.50% | |
Senior notes due Apr. 2025 | ||
Debt Instruments | ||
Total | $ 300,000 | |
Interest rate (as a percent) | 8.75% | |
Senior notes due Nov. 2023 | ||
Debt Instruments | ||
Total | $ 197,419 | 197,419 |
Interest rate (as a percent) | 5.50% | |
Senior notes due Dec. 2025 | ||
Debt Instruments | ||
Total | $ 679,961 | $ 687,877 |
Interest rate (as a percent) | 5.625% |
Debt - Details of Long-term D_2
Debt - Details of Long-term Debt Table - Total debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Disclosure [Abstract] | ||
Total | $ 1,813,168 | $ 1,609,296 |
Plus: capital lease obligations | 864 | 832 |
Less: unamortized debt issuance costs and discount, net | 16,955 | 15,585 |
Total debt | $ 1,797,077 | $ 1,594,543 |
Debt - Details of Long-term D_3
Debt - Details of Long-term Debt Table - Total long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Disclosure [Abstract] | ||
Total debt | $ 1,797,077 | $ 1,594,543 |
Less: current maturities | 180 | 1 |
Total long-term debt | $ 1,796,897 | $ 1,594,542 |
Debt - Maturities of the Compan
Debt - Maturities of the Company's debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
Fiscal Year: | ||
2024 | $ 833,207 | |
2025 | 300,000 | |
Thereafter | 679,961 | |
Total | $ 1,813,168 | $ 1,609,296 |
Debt - Term loan (Details)
Debt - Term loan (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Instruments | ||||
Aggregate principal amount paid down | $ 882,921 | $ 777,538 | $ 558,599 | |
Gain (loss) on extinguishment of debt | (38) | $ (951) | $ (876) | |
Term Loan B | ||||
Debt Instruments | ||||
Aggregate principal amount paid down | $ 86,800 | |||
Total tender offer price | 99.40% | |||
Gain (loss) on extinguishment of debt | $ 200 | |||
Write off of unamortized debt issuance costs | 400 | |||
Gain from discount paid under face value | $ 600 | |||
Sally Holdings, LLC | Term Loan B | ||||
Debt Instruments | ||||
Debt instrument term | 7 years | |||
Debt instrument, face amount | $ 850,000 | |||
Debt instrument, maturity date | Jul. 5, 2024 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) $ in Thousands | Apr. 24, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Debt Instruments | ||||
Gain (loss) on extinguishment of debt | $ (38) | $ (951) | $ (876) | |
Senior notes due Dec. 2025 | ||||
Debt Instruments | ||||
Debt instrument repurchased, aggregate principal amount | $ 7,900 | |||
Total tender offer price | 98.70% | |||
Gain (loss) on extinguishment of debt | $ 100 | |||
Interest rate (as a percent) | 5.625% | |||
Senior secured second lien notes due 2025 | ||||
Debt Instruments | ||||
Debt instrument, face amount | $ 300,000 | |||
Net proceeds from offering | $ 295,500 | |||
Interest rate (as a percent) | 8.75% |
Derivative Instruments - (Detai
Derivative Instruments - (Details) | 12 Months Ended | ||
Sep. 30, 2020USD ($)instrument | Sep. 30, 2018USD ($) | Jul. 31, 2017USD ($)derivative | |
Derivative Instruments | |||
Number of derivative instruments held | instrument | 0 | ||
Interest rate caps | Variable-rate tranche | Sally Holdings, LLC | |||
Derivative Instruments | |||
Notional Amount | $ 550,000,000 | ||
Derivative instruments, expiration date | Jun. 30, 2023 | ||
Number of interest rate caps | derivative | 2 | ||
Interest rate caps | Term loan B variable tranche | Sally Holdings, LLC | |||
Derivative Instruments | |||
Interest rate caps designated as cash flow hedges to be reclassified in to interest expense over next 12 months | $ 1,200,000 | ||
Reclassified loss from AOCL, net | 600,000 | ||
Reclassification out of Accumulated Other Comprehensive Income | Foreign Exchange Contract | |||
Derivative Instruments | |||
Foreign currency forwards designated as cash flow hedges to be reclassified in to cost of goods sold over next 12 months | 600,000 | ||
Foreign currency forwards designated as cash flow hedges to be reclassified in to cost of goods sold | $ 1,100,000 | ||
Selling, General and Administrative Expenses | Non-Designated | Foreign Exchange Contract | |||
Derivative Instruments | |||
Gain (loss) on derivative instrument | $ 1,600,000 |
401(k) and Profit Sharing Plan
401(k) and Profit Sharing Plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, expense recognized | $ 5,800,000 | $ 6,200,000 | $ 6,500,000 |
Defined Contribution Plan, Plan Name [Extensible List] | sbh:Plans401KMember | ||
Profit sharing plan, expense recognized | $ 0 | $ 0 | $ 0 |
U.S. 401(k) Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Plan Name [Extensible List] | sbh:US401KPlanMember | ||
Puerto Rico 401(k) Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Plan Name [Extensible List] | sbh:PuertoRico401KPlanMember | ||
Defined Contribution Plan, minimum employment period for contribution to plan | 1 year |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Reversal amount of tax benefit as a result of change in the regulations | $ 2,500 | |||
Current: | ||||
Federal | $ 22,282 | $ 59,855 | $ 68,608 | |
Foreign | 6,120 | 10,132 | 11,039 | |
State | 4,730 | 15,339 | 11,344 | |
Total current portion | 33,132 | 85,326 | 90,991 | |
Deferred: | ||||
Federal | 10,177 | 4,905 | (26,001) | |
Foreign | 1,321 | (1,498) | 1,868 | |
State | 2,092 | 1,808 | 3,522 | |
Total deferred portion | 13,590 | 5,215 | (20,611) | |
Total provision for income taxes | $ 46,722 | $ 90,541 | $ 70,380 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between US Federal Statutory Income Tax Rate and Effective Income Tax Rate (Details) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21.00% | 21.00% | 24.50% |
State income taxes, net of federal tax benefit | 3.40% | 3.40% | 3.20% |
Effect of foreign operations | (0.40%) | 0.20% | |
Foreign valuation allowances | 4.60% | (0.20%) | 0.60% |
Tax law change - GILTI | (1.00%) | ||
Deferred tax revaluation, including adoption of income tax method changes | (11.50%) | ||
Deemed repatriation tax | 0.20% | (0.30%) | 3.60% |
Share-based payment awards | 1.20% | 0.60% | 0.50% |
Other, net | 0.20% | 0.30% | 0.50% |
Effective tax rate | 29.20% | 25.00% | 21.40% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Deferred tax assets attributable to: | |||
Foreign loss carryforwards | $ 35,091,000 | $ 27,097,000 | |
Accrued liabilities | 8,871,000 | 12,568,000 | |
Share-based compensation expense | 8,988,000 | 9,494,000 | |
U.S. foreign tax credits | 11,199,000 | 8,807,000 | |
U.S. federal social security tax deferral | 4,038,000 | ||
Inventory adjustments | 2,131,000 | 1,242,000 | |
Other | 1,101,000 | 651,000 | |
Total deferred tax assets | 71,419,000 | 59,859,000 | |
Valuation allowance | (50,543,000) | (38,287,000) | |
Total deferred tax assets, net | 20,876,000 | 21,572,000 | |
Deferred tax liabilities attributable to: | |||
Depreciation and amortization | 107,672,000 | 94,920,000 | |
Net deferred tax liability | 86,796,000 | 73,348,000 | |
Domestic earnings before provision for income taxes | 168,000,000 | 328,300,000 | $ 300,400,000 |
Foreign earnings before provision for income (loss) taxes | (8,000,000) | 33,900,000 | $ 28,000,000 |
Deferred taxes on accumulated undistributed earnings of our foreign operations | 0 | ||
Total operating loss carry-forward | 128,200,000 | 97,300,000 | |
Operating loss carry-forward, subject to valuation allowance | 111,700,000 | 79,000,000 | |
Amount of operating loss carry-forwards with an expiration date | 6,200,000 | ||
Amount of operating loss carry-forwards without an expiration date | 122,000,000 | ||
Total tax credit carryforwards | 13,800,000 | 11,200,000 | |
Expiring tax credit carryforwards | 1,200,000 | ||
Non-expiring tax credit carryforwards | 1,400,000 | ||
Total Tax credit carryforwards, subject to a valuation allowance | 12,600,000 | $ 10,100,000 | |
U.S. foreign | |||
Deferred tax liabilities attributable to: | |||
Expiring tax credit carryforwards | $ 11,200,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the changes in the amount of unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation of the changes in the amount of unrecognized tax benefits | ||
Balance at beginning of the fiscal year | $ 2,000 | $ 1,368 |
Decreases related to prior year tax positions | (4) | (4) |
Increases related to current year tax positions | 250 | 954 |
Lapse of statute | (193) | (318) |
Balance at end of fiscal year | 2,053 | 2,000 |
Total unrecognized tax benefits of accrued interest and penalties | $ 200 | $ 200 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | Sep. 28, 2020USD ($)store | Sep. 30, 2020USD ($) | Sep. 30, 2019Business | Sep. 30, 2018USD ($)store |
Business Acquisition [Line Items] | ||||
Immaterial acquisition | $ 5.7 | |||
Intangible assets subject to amortization | $ 3.9 | |||
Number of businesses acquired | Business | 0 | |||
Ami-Co | ||||
Business Acquisition [Line Items] | ||||
Date of acquisition | Sep. 28, 2020 | |||
Number of beauty supply stores | store | 10 | |||
Cost of acquisition | $ 8.9 | |||
Goodwill not expected to be deducted for tax purposes | $ 5.3 | |||
Chalut | ||||
Business Acquisition [Line Items] | ||||
Number of beauty supply stores | store | 21 | |||
Cost of acquisition | $ 8.8 | |||
Intangible assets subject to amortization | 4.7 | |||
Goodwill expected to be deducted for tax purposes | $ 0.7 |
Segments and Disaggregated Re_3
Segments and Disaggregated Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Segments | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net sales: | |||||||||||
Total net sales | $ 957,812 | $ 705,287 | $ 871,023 | $ 980,208 | $ 965,937 | $ 975,169 | $ 945,852 | $ 989,453 | $ 3,514,330 | $ 3,876,411 | $ 3,932,565 |
Segment operating earnings: | |||||||||||
Segment operating earnings | 258,760 | 458,473 | 426,589 | ||||||||
Restructuring | 14,025 | (682) | 33,615 | ||||||||
Interest expense | 98,793 | 96,309 | 98,162 | ||||||||
Earnings before provision for income taxes | 159,967 | 362,164 | 328,427 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 106,779 | 107,658 | 108,829 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 110,858 | 107,755 | 86,507 | ||||||||
Total assets: | |||||||||||
Assets | 2,895,147 | 2,098,446 | $ 2,895,147 | $ 2,098,446 | $ 2,097,414 | ||||||
Number of single customer accounted for ten percent or more of revenue | 10.00% | 10.00% | 10.00% | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 315,029 | 319,628 | $ 315,029 | $ 319,628 | $ 308,357 | ||||||
United States | |||||||||||
Net sales: | |||||||||||
Total net sales | 2,914,171 | 3,169,821 | 3,188,993 | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 264,936 | 259,815 | 264,936 | 259,815 | 234,475 | ||||||
Foreign | |||||||||||
Net sales: | |||||||||||
Total net sales | 600,159 | 706,590 | 743,572 | ||||||||
United Kingdom | |||||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 20,183 | 24,476 | 20,183 | 24,476 | 29,493 | ||||||
Other countries | |||||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 29,910 | 35,337 | 29,910 | 35,337 | 44,389 | ||||||
Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 431,794 | 605,984 | 603,078 | ||||||||
Total assets: | |||||||||||
Assets | 2,477,546 | 1,985,640 | 2,477,546 | 1,985,640 | 1,988,668 | ||||||
Corporate | |||||||||||
Segment operating earnings: | |||||||||||
Unallocated expenses | 159,009 | 148,193 | 142,874 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 12,248 | 13,529 | 15,079 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 10,390 | 18,956 | 23,620 | ||||||||
Total assets: | |||||||||||
Assets | 417,601 | 112,806 | 417,601 | 112,806 | 108,746 | ||||||
Sally Beauty Supply | |||||||||||
Net sales: | |||||||||||
Total net sales | 2,080,703 | 2,293,094 | 2,333,838 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 65,207 | 65,561 | 64,017 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 73,130 | 69,802 | 46,289 | ||||||||
Sally Beauty Supply | Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 237,588 | 366,412 | 362,853 | ||||||||
Total assets: | |||||||||||
Assets | 1,370,745 | 973,304 | 1,370,745 | 973,304 | 995,546 | ||||||
Beauty Systems Group | |||||||||||
Net sales: | |||||||||||
Total net sales | 1,433,627 | 1,583,317 | 1,598,727 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 29,324 | 28,568 | 29,733 | ||||||||
Payments for property and equipment: | |||||||||||
Payments for property and equipment | 27,338 | 18,997 | 16,598 | ||||||||
Beauty Systems Group | Operating segments | |||||||||||
Segment operating earnings: | |||||||||||
Segment operating earnings | 194,206 | 239,572 | 240,225 | ||||||||
Total assets: | |||||||||||
Assets | $ 1,106,801 | $ 1,012,336 | $ 1,106,801 | $ 1,012,336 | $ 993,122 |
Segments and Disaggregated Re_4
Segments and Disaggregated Revenue - Schedule of Disaggregation of Net Sales by Segment (Details) - Sales Revenue, Net | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Sally Beauty Supply | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Sally Beauty Supply | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Sally Beauty Supply | Hair color | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 33.00% | 29.40% | 26.90% |
Sally Beauty Supply | Hair care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 18.90% | 20.40% | 20.90% |
Sally Beauty Supply | Skin and nail care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 14.30% | 14.80% | 15.70% |
Sally Beauty Supply | Styling tools | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 12.80% | 13.50% | 13.90% |
Sally Beauty Supply | Textured hair | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 5.80% | 7.10% | 7.50% |
Sally Beauty Supply | Salon supplies and accessories | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 8.10% | 6.60% | 7.10% |
Sally Beauty Supply | Other Beauty items | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 7.10% | 8.20% | 8.00% |
Sally Beauty Supply | Sales channel, directly to consumer | Company-operated stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 91.80% | 96.90% | 97.50% |
Sally Beauty Supply | Sales channel, through intermediary | E-commerce | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 8.00% | 2.80% | 2.20% |
Sally Beauty Supply | Sales channel, through intermediary | Franchise stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 0.20% | 0.30% | 0.30% |
Beauty Systems Group | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Beauty Systems Group | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 100.00% | 100.00% | 100.00% |
Beauty Systems Group | Hair color | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 40.60% | 39.50% | 38.40% |
Beauty Systems Group | Hair care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 35.00% | 35.10% | 33.70% |
Beauty Systems Group | Skin and nail care | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 8.00% | 8.10% | 8.70% |
Beauty Systems Group | Styling tools | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 6.20% | 3.40% | 3.90% |
Beauty Systems Group | Other Beauty items | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 3.40% | 6.30% | 6.70% |
Beauty Systems Group | Promotional items | Product Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 6.80% | 7.60% | 8.60% |
Beauty Systems Group | Sales channel, directly to consumer | Company-operated stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 68.90% | 69.40% | 68.70% |
Beauty Systems Group | Sales channel, through intermediary | E-commerce | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 8.70% | 4.80% | 3.70% |
Beauty Systems Group | Sales channel, through intermediary | Franchise stores | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 7.10% | 7.60% | 7.70% |
Beauty Systems Group | Sales channel, through intermediary | Distributor sales consultants | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of net sales | 15.30% | 18.20% | 19.90% |
Separate Financial Informatio_3
Separate Financial Information of Guarantor Subsidiaries - (Details) | 12 Months Ended |
Sep. 30, 2020 | |
Senior notes due Nov. 2023 | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Debt maturity year | 2023 |
Senior notes due Dec. 2025 | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Debt maturity year | 2025 |
Guarantor Subsidiaries | ABL Facility | |
Condensed Balance Sheet Statements Captions [Line Items] | |
Percentage of guarantor subsidiaries owned by parent | 100.00% |
Separate Financial Informatio_4
Separate Financial Information of Guarantor Subsidiaries - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Assets | ||||
Cash and cash equivalents | $ 514,151 | $ 71,495 | $ 77,295 | $ 63,759 |
Trade and other accounts receivable, net | 56,429 | 104,539 | ||
Inventory | 814,503 | 952,907 | ||
Other current assets | 48,014 | 34,612 | ||
Property and equipment, net | 315,029 | 319,628 | 308,357 | |
Operating lease assets | 525,634 | |||
Goodwill and other intangible assets, net | 598,321 | 592,837 | ||
Other assets | 23,066 | 22,428 | ||
Total assets | 2,895,147 | 2,098,446 | 2,097,414 | |
Liabilities and Stockholders’ Equity (Deficit) | ||||
Accounts payable | 236,333 | 278,688 | ||
Accrued liabilities | 170,665 | 169,054 | ||
Income taxes payable | 2,917 | 8,336 | ||
Long-term debt | 1,797,077 | 1,594,543 | ||
Operating lease liability | 547,642 | |||
Other liabilities | 32,976 | 27,757 | ||
Deferred income tax liabilities, net | 92,094 | 80,391 | ||
Total liabilities | 2,879,704 | 2,158,769 | ||
Total stockholders’ equity (deficit) | 15,443 | (60,323) | (268,556) | (363,616) |
Total liabilities and stockholders’ equity (deficit) | 2,895,147 | 2,098,446 | ||
Parent | ||||
Assets | ||||
Other current assets | 6,908 | 1,436 | ||
Property and equipment, net | 6 | 6 | ||
Investment in subsidiaries | 1,756,347 | 1,621,843 | ||
Other assets | 1,431 | 1,446 | ||
Total assets | 1,764,692 | 1,624,731 | ||
Liabilities and Stockholders’ Equity (Deficit) | ||||
Accounts payable | 36 | 48 | ||
Due to affiliates | 1,742,661 | 1,672,322 | ||
Accrued liabilities | 205 | 188 | ||
Income taxes payable | 419 | 6,055 | ||
Other liabilities | 5,928 | 6,441 | ||
Total liabilities | 1,749,249 | 1,685,054 | ||
Total stockholders’ equity (deficit) | 15,443 | (60,323) | ||
Total liabilities and stockholders’ equity (deficit) | 1,764,692 | 1,624,731 | ||
Sally Holdings and Sally Capital | ||||
Assets | ||||
Cash and cash equivalents | 194,622 | 10 | 10 | 10 |
Other current assets | 132 | 132 | ||
Investment in subsidiaries | 4,582,915 | 4,374,334 | ||
Other assets | 3,104 | 3,499 | ||
Total assets | 4,780,773 | 4,377,975 | ||
Liabilities and Stockholders’ Equity (Deficit) | ||||
Due to affiliates | 1,196,746 | 1,142,324 | ||
Accrued liabilities | 29,165 | 17,937 | ||
Income taxes payable | 2,302 | 2,161 | ||
Long-term debt | 1,796,213 | 1,593,710 | ||
Total liabilities | 3,024,426 | 2,756,132 | ||
Total stockholders’ equity (deficit) | 1,756,347 | 1,621,843 | ||
Total liabilities and stockholders’ equity (deficit) | 4,780,773 | 4,377,975 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 217,865 | 41,009 | 29,050 | 22,090 |
Trade and other accounts receivable, net | 29,637 | 65,746 | ||
Due from affiliates | 3,015,299 | 2,878,072 | ||
Inventory | 615,092 | 722,830 | ||
Other current assets | 26,103 | 22,480 | ||
Property and equipment, net | 263,381 | 258,132 | ||
Operating lease assets | 392,863 | |||
Investment in subsidiaries | 390,579 | 385,629 | ||
Goodwill and other intangible assets, net | 449,802 | 452,645 | ||
Other assets | 5,059 | (581) | ||
Total assets | 5,405,680 | 4,825,962 | ||
Liabilities and Stockholders’ Equity (Deficit) | ||||
Accounts payable | 183,088 | 235,940 | ||
Accrued liabilities | 110,165 | 121,375 | ||
Income taxes payable | 1 | |||
Long-term debt | 2 | 1 | ||
Operating lease liability | 413,685 | |||
Other liabilities | 26,889 | 17,639 | ||
Deferred income tax liabilities, net | 88,936 | 76,672 | ||
Total liabilities | 822,765 | 451,628 | ||
Total stockholders’ equity (deficit) | 4,582,915 | 4,374,334 | ||
Total liabilities and stockholders’ equity (deficit) | 5,405,680 | 4,825,962 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 101,664 | 30,476 | $ 48,235 | $ 41,659 |
Trade and other accounts receivable, net | 26,792 | 38,793 | ||
Inventory | 199,411 | 230,077 | ||
Other current assets | 14,871 | 10,564 | ||
Property and equipment, net | 51,642 | 61,490 | ||
Operating lease assets | 132,771 | |||
Goodwill and other intangible assets, net | 148,519 | 140,192 | ||
Other assets | 13,472 | 18,064 | ||
Total assets | 689,142 | 529,656 | ||
Liabilities and Stockholders’ Equity (Deficit) | ||||
Accounts payable | 53,209 | 42,700 | ||
Due to affiliates | 75,892 | 63,426 | ||
Accrued liabilities | 31,130 | 29,554 | ||
Income taxes payable | 196 | 119 | ||
Long-term debt | 862 | 832 | ||
Operating lease liability | 133,957 | |||
Other liabilities | 159 | 3,677 | ||
Deferred income tax liabilities, net | 3,158 | 3,719 | ||
Total liabilities | 298,563 | 144,027 | ||
Total stockholders’ equity (deficit) | 390,579 | 385,629 | ||
Total liabilities and stockholders’ equity (deficit) | 689,142 | 529,656 | ||
Consolidating Eliminations | ||||
Assets | ||||
Due from affiliates | (3,015,299) | (2,878,072) | ||
Investment in subsidiaries | (6,729,841) | (6,381,806) | ||
Total assets | (9,745,140) | (9,259,878) | ||
Liabilities and Stockholders’ Equity (Deficit) | ||||
Due to affiliates | (3,015,299) | (2,878,072) | ||
Total liabilities | (3,015,299) | (2,878,072) | ||
Total stockholders’ equity (deficit) | (6,729,841) | (6,381,806) | ||
Total liabilities and stockholders’ equity (deficit) | $ (9,745,140) | $ (9,259,878) |
Separate Financial Informatio_5
Separate Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Earnings and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | $ 957,812 | $ 705,287 | $ 871,023 | $ 980,208 | $ 965,937 | $ 975,169 | $ 945,852 | $ 989,453 | $ 3,514,330 | $ 3,876,411 | $ 3,932,565 |
Cost of goods sold | 1,798,736 | 1,965,869 | 1,988,152 | ||||||||
Gross profit | 489,143 | 321,846 | 429,757 | 474,848 | 479,291 | 482,222 | 468,324 | 480,705 | 1,715,594 | 1,910,542 | 1,944,413 |
Selling, general and administrative expenses | 1,442,809 | 1,452,751 | 1,484,209 | ||||||||
Restructuring | 14,025 | (682) | 33,615 | ||||||||
Operating earnings | 258,760 | 458,473 | 426,589 | ||||||||
Interest expense (income) | 98,793 | 96,309 | 98,162 | ||||||||
Earnings before provision for income taxes | 159,967 | 362,164 | 328,427 | ||||||||
Provision (benefit) for income taxes | 46,722 | 90,541 | 70,380 | ||||||||
Net earnings | $ 70,188 | $ (23,526) | $ 13,368 | $ 53,215 | $ 69,007 | $ 71,164 | $ 65,725 | $ 65,727 | 113,245 | 271,623 | 258,047 |
Other comprehensive income (loss), net of tax | 12,584 | (27,296) | (8,155) | ||||||||
Total comprehensive income | 125,829 | 244,327 | 249,892 | ||||||||
Parent | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Selling, general and administrative expenses | 11,501 | 11,331 | 10,957 | ||||||||
Operating earnings | (11,501) | (11,331) | (10,957) | ||||||||
Earnings before provision for income taxes | (11,501) | (11,331) | (10,957) | ||||||||
Provision (benefit) for income taxes | (2,901) | (2,742) | (2,734) | ||||||||
Equity (loss) in earnings of subsidiaries, net of tax | 121,845 | 280,212 | 266,270 | ||||||||
Net earnings | 113,245 | 271,623 | 258,047 | ||||||||
Total comprehensive income | 113,245 | 271,623 | 258,047 | ||||||||
Sally Holdings and Sally Capital | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Selling, general and administrative expenses | 753 | 607 | 1,538 | ||||||||
Operating earnings | (753) | (607) | (1,538) | ||||||||
Interest expense (income) | 98,998 | 96,464 | 98,332 | ||||||||
Earnings before provision for income taxes | (99,751) | (97,071) | (99,870) | ||||||||
Provision (benefit) for income taxes | (25,476) | (24,888) | (28,787) | ||||||||
Equity (loss) in earnings of subsidiaries, net of tax | 196,120 | 352,395 | 337,353 | ||||||||
Net earnings | 121,845 | 280,212 | 266,270 | ||||||||
Other comprehensive income (loss), net of tax | 198 | (4,566) | 2,449 | ||||||||
Total comprehensive income | 122,043 | 275,646 | 268,719 | ||||||||
Guarantor Subsidiaries | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | 2,883,265 | 3,131,360 | 3,152,120 | ||||||||
Related party sales | 1,761 | 2,201 | 2,294 | ||||||||
Cost of goods sold | 1,447,705 | 1,568,663 | 1,581,385 | ||||||||
Gross profit | 1,437,321 | 1,564,898 | 1,573,029 | ||||||||
Selling, general and administrative expenses | 1,152,489 | 1,135,926 | 1,136,312 | ||||||||
Restructuring | 14,025 | (682) | 33,615 | ||||||||
Operating earnings | 270,807 | 429,654 | 403,102 | ||||||||
Interest expense (income) | (131) | 5 | (3) | ||||||||
Earnings before provision for income taxes | 270,938 | 429,649 | 403,105 | ||||||||
Provision (benefit) for income taxes | 70,840 | 109,230 | 73,747 | ||||||||
Equity (loss) in earnings of subsidiaries, net of tax | (3,978) | 31,976 | 7,995 | ||||||||
Net earnings | 196,120 | 352,395 | 337,353 | ||||||||
Total comprehensive income | 196,120 | 352,395 | 337,353 | ||||||||
Non-Guarantor Subsidiaries | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Net sales | 631,065 | 745,051 | 780,445 | ||||||||
Cost of goods sold | 352,792 | 399,407 | 409,061 | ||||||||
Gross profit | 278,273 | 345,644 | 371,384 | ||||||||
Selling, general and administrative expenses | 278,066 | 304,887 | 335,402 | ||||||||
Operating earnings | 207 | 40,757 | 35,982 | ||||||||
Interest expense (income) | (74) | (160) | (167) | ||||||||
Earnings before provision for income taxes | 281 | 40,917 | 36,149 | ||||||||
Provision (benefit) for income taxes | 4,259 | 8,941 | 28,154 | ||||||||
Net earnings | (3,978) | 31,976 | 7,995 | ||||||||
Other comprehensive income (loss), net of tax | 12,386 | (22,730) | (10,604) | ||||||||
Total comprehensive income | 8,408 | 9,246 | (2,609) | ||||||||
Consolidating Eliminations | |||||||||||
Condensed Income Statements Captions [Line Items] | |||||||||||
Related party sales | (1,761) | (2,201) | (2,294) | ||||||||
Cost of goods sold | (1,761) | (2,201) | (2,294) | ||||||||
Equity (loss) in earnings of subsidiaries, net of tax | (313,987) | (664,583) | (611,618) | ||||||||
Net earnings | (313,987) | (664,583) | (611,618) | ||||||||
Total comprehensive income | $ (313,987) | $ (664,583) | $ (611,618) |
Separate Financial Informatio_6
Separate Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | $ 426,889 | $ 320,415 | $ 372,661 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (110,805) | (92,443) | (86,138) |
Acquisitions, net of cash acquired | (12,970) | (3,424) | (9,175) |
Net cash used by investing activities | (123,775) | (95,867) | (95,313) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 1,087,504 | 593,504 | 461,819 |
Repayments of long-term debt | (882,921) | (777,538) | (558,599) |
Debt issuance costs | (6,257) | (1,151) | |
Payments for common stock repurchased | (61,357) | (47,434) | (166,701) |
Proceeds from exercises of stock options | 2,792 | 2,160 | 1,350 |
Net cash provided (used) by financing activities | 139,761 | (229,308) | (263,282) |
Effect of foreign exchange rate changes on cash and cash equivalents | (219) | (1,040) | (530) |
Net increase (decrease) in cash and cash equivalents | 442,656 | (5,800) | 13,536 |
Cash and cash equivalents, beginning of period | 71,495 | 77,295 | 63,759 |
Cash and cash equivalents, end of period | 514,151 | 71,495 | 77,295 |
Parent | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | (11,769) | 2,364 | 23,424 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (5) | (1) | |
Net cash used by investing activities | (5) | (1) | |
Cash Flows from Financing Activities: | |||
Payments for common stock repurchased | (61,357) | (47,434) | (166,701) |
Proceeds from exercises of stock options | 2,792 | 2,160 | 1,350 |
Due to affiliates | 70,339 | 42,911 | 141,927 |
Net cash provided (used) by financing activities | 11,774 | (2,363) | (23,424) |
Sally Holdings and Sally Capital | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | (58,166) | (70,150) | (62,948) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 1,087,500 | 593,500 | 461,814 |
Repayments of long-term debt | (882,887) | (777,533) | (558,000) |
Debt issuance costs | (6,257) | (1,151) | |
Due to affiliates | 54,422 | 254,183 | 160,285 |
Net cash provided (used) by financing activities | 252,778 | 70,150 | 62,948 |
Net increase (decrease) in cash and cash equivalents | 194,612 | ||
Cash and cash equivalents, beginning of period | 10 | 10 | 10 |
Cash and cash equivalents, end of period | 194,622 | 10 | 10 |
Guarantor Subsidiaries | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 417,940 | 373,313 | 384,958 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (98,379) | (79,379) | (68,689) |
Acquisitions, net of cash acquired | (5,479) | (2,584) | |
Due from affiliates | (137,227) | (279,391) | (309,310) |
Net cash used by investing activities | (241,085) | (361,354) | (377,999) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 4 | 4 | 5 |
Repayments of long-term debt | (3) | (4) | (4) |
Net cash provided (used) by financing activities | 1 | 1 | |
Net increase (decrease) in cash and cash equivalents | 176,856 | 11,959 | 6,960 |
Cash and cash equivalents, beginning of period | 41,009 | 29,050 | 22,090 |
Cash and cash equivalents, end of period | 217,865 | 41,009 | 29,050 |
Non-Guarantor Subsidiaries | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net cash provided (used) by operating activities | 78,884 | 14,888 | 27,227 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, net | (12,421) | (13,063) | (17,449) |
Acquisitions, net of cash acquired | (7,491) | (840) | (9,175) |
Net cash used by investing activities | (19,912) | (13,903) | (26,624) |
Cash Flows from Financing Activities: | |||
Repayments of long-term debt | (31) | (1) | (595) |
Due to affiliates | 12,466 | (17,703) | 7,098 |
Net cash provided (used) by financing activities | 12,435 | (17,704) | 6,503 |
Effect of foreign exchange rate changes on cash and cash equivalents | (219) | (1,040) | (530) |
Net increase (decrease) in cash and cash equivalents | 71,188 | (17,759) | 6,576 |
Cash and cash equivalents, beginning of period | 30,476 | 48,235 | 41,659 |
Cash and cash equivalents, end of period | 101,664 | 30,476 | 48,235 |
Consolidating Eliminations | |||
Cash Flows from Investing Activities: | |||
Due from affiliates | 137,227 | 279,391 | 309,310 |
Net cash used by investing activities | 137,227 | 279,391 | 309,310 |
Cash Flows from Financing Activities: | |||
Due to affiliates | (137,227) | (279,391) | (309,310) |
Net cash provided (used) by financing activities | $ (137,227) | $ (279,391) | $ (309,310) |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Expense and Gains (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost And Reserve [Line Items] | |||
Restructuring charges | $ 14,025 | $ (682) | $ 33,615 |
Total expense (gain) | 14,025 | (682) | 33,615 |
Project Surge | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring expense | 1,511 | ||
Restructuring charges | 1,511 | ||
Transformation Plan | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring charges | $ 12,514 | $ (682) | $ 33,615 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Changes in restructuring reserve | |||
Restructuring charges | $ 14,025 | $ (682) | $ 33,615 |
Project Surge | |||
Changes in restructuring reserve | |||
Restructuring charges | 1,511 | ||
Cash Payments | 1,511 | ||
Project Surge | Corporate | |||
Changes in restructuring reserve | |||
Restructuring charges | 100 | ||
Project Surge | Sally Beauty Supply | |||
Changes in restructuring reserve | |||
Restructuring charges | 1,400 | ||
Transformation Plan | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 928 | ||
Restructuring charges | 12,514 | (682) | $ 33,615 |
Cash Payments | 13,377 | ||
Restructuring reserve, ending balance | 65 | 928 | |
Impairment of long-lived assets | 2,300 | ||
Impairment on operating lease asset | 2,300 | ||
Carrying value assets adjusted down to estimated fair value | 8,000 | ||
Transformation Plan | Corporate | |||
Changes in restructuring reserve | |||
Restructuring charges | 4,100 | ||
Transformation Plan | Sally Beauty Supply | |||
Changes in restructuring reserve | |||
Restructuring charges | 6,500 | ||
Transformation Plan | Beauty Systems Group | |||
Changes in restructuring reserve | |||
Restructuring charges | 1,900 | ||
Workforce reductions | Project Surge | |||
Changes in restructuring reserve | |||
Restructuring charges | 1,149 | ||
Cash Payments | 1,149 | ||
Workforce reductions | Transformation Plan | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 654 | ||
Restructuring charges | 6,550 | ||
Cash Payments | 7,139 | ||
Restructuring reserve, ending balance | 65 | 654 | |
Other | Project Surge | |||
Changes in restructuring reserve | |||
Restructuring charges | 362 | ||
Cash Payments | 362 | ||
Other | Transformation Plan | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 70 | ||
Restructuring charges | 4,539 | ||
Cash Payments | 4,609 | ||
Restructuring reserve, ending balance | 70 | ||
Consulting | Transformation Plan | |||
Changes in restructuring reserve | |||
Restructuring reserve, beginning balance | 204 | ||
Restructuring charges | 1,425 | ||
Cash Payments | $ 1,629 | ||
Restructuring reserve, ending balance | $ 204 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 957,812 | $ 705,287 | $ 871,023 | $ 980,208 | $ 965,937 | $ 975,169 | $ 945,852 | $ 989,453 | $ 3,514,330 | $ 3,876,411 | $ 3,932,565 |
Gross profit | 489,143 | 321,846 | 429,757 | 474,848 | 479,291 | 482,222 | 468,324 | 480,705 | 1,715,594 | 1,910,542 | 1,944,413 |
Net earnings | $ 70,188 | $ (23,526) | $ 13,368 | $ 53,215 | $ 69,007 | $ 71,164 | $ 65,725 | $ 65,727 | $ 113,245 | $ 271,623 | $ 258,047 |
Earnings per share: | |||||||||||
Basic | $ 0.63 | $ (0.21) | $ 0.12 | $ 0.46 | $ 0.58 | $ 0.59 | $ 0.55 | $ 0.55 | $ 0.99 | $ 2.27 | $ 2.09 |
Diluted | $ 0.62 | $ (0.21) | $ 0.12 | $ 0.45 | $ 0.58 | $ 0.59 | $ 0.54 | $ 0.54 | $ 0.99 | $ 2.26 | $ 2.08 |