Published on 1 Apr 2024 on Zacks via Yahoo Finance

Sally Beauty's (SBH) Strategic Initiatives Aid Amid Soft Traffic

Strength in the strategic growth pillar has been working for Sally Beauty Holdings, Inc. SBH. The beauty products provider is benefiting from its focus on customer-centric growth initiatives. The company’s recently introduced Happy Beauty Co. holds promise. That being said, Sally Beauty continues to battle macroeconomic challenges that are putting pressure on consumer spending.Let’s delve deeper.

Strategic Growth Efforts

Sally Beauty is focused on its three key strategic initiatives, which include enhancing customer centricity, growing high-margin-owned brands and carrying out innovations while increasing the efficiency of operations and optimizing its capabilities. Talking about innovation, the company has an impressive pipeline of innovation in the Sally Beauty segment.The company’s broad-based store optimization program helped in increasing productivity and profitability by delivering an engaging omnichannel experience for customers. The Fuel for Growth initiative keeps Sally Beauty well-positioned to capture gross margin and SG&A gains while undertaking growth and returning shareholders’ value. Management is on track to capture pre-tax benefits of $20 million from the program in the fiscal 2024.Taking about customer-centric efforts, the company is focused on acquiring new customers via marketing programs, differentiated product offerings, and strategic initiatives. In the first quarter of fiscal 2024, the company generated 77% of sales from 16 million Sally U.S. and Canada loyalty members. Also, the BSG Rewards credit card purchases contributed 8% to sales.