Sally Beauty Holdings has appointed Aaron Alt as president, adding to his existing finance and supply chain responsibilities, the company announced this week. He replaces Carrie McDermott, who arrived at Sally Beauty in August 2017 from DSW and is departing to become chief executive at an unnamed company based in Columbus, Ohio, according to a company press release.
The company also announced an executive shuffle, effective Oct. 29, that brings in Ascena Retail Group vice president and treasurer Heather Plutino to be Sally Beauty's group treasurer and vice president of finance, and will have Chief Information Officer Joe Brenner reporting directly to CEO Chris Brickman.
The company also provided a peek into its fourth quarter results, saying that same-store sales for its Sally Beauty segment improved to flat for the first time in seven quarters, with positive comps in the U.S. and Canada negatively impacted, modestly, by its European business. Its fourth quarter and fiscal 2018 results will be released in full on Nov. 8, according to the release.
Sally Beauty is regrouping after instituting a series of cost-cutting measures, mostly layoffs at its headquarters, earlier this year as part of a turnaround.
Judging from its comp sales boost, that effort is on track but remains vulnerable to the usual vagaries of retail competition and the strong competition in beauty, according to Instinet analysts led by Simeon Siegel. "Although we believe that [Sally Beauty Holdings] has meaningful staying power at its current stage, any material capture by competitors, the emergence of new 'It' brands not sold [there], or any drop in customer perception could weigh meaningfully on results," Instinet said in comments emailed to Retail Dive.
The retailer is also in the midst of transforming its retail footprint. Sally Beauty is "designing and testing new store concepts," Brickman told analysts in August, according to a transcript from Seeking Alpha — something that drugstores and department stores in the beauty space are also experimenting with. The company anticipates closing some 1% to 2% of its store base in the U.S. and abroad, but, "given the opportunities present in the retail landscape," also continues to mull new store openings, he added.
That comes with a level of potential hazard, Instinet analysts warn. "There is always a risk when opening stores, and with [Sally Beauty] constantly entering new markets both domestically and internationally, that risk is exacerbated," Siegel wrote. "There is the risk that consumers increasingly turn to online competitors to purchase their beauty needs and that both in-store and online sales suffer. As in all retail, competition is fierce, and the brands can see fortunes turn."