We have not declared or paid dividends at any time during the two fiscal years prior to the date of this Annual Report. We currently anticipate that we will retain future earnings to support investments in our business, to repay outstanding debt or to return capital to shareholders through share repurchases. Any determination to pay dividends will be made at the discretion of our Board of Directors and will depend on our financial condition, results of operations, contractual restrictions, cash requirements and other factors that our Board of Directors deem relevant.
We depend on our subsidiaries for cash that we would use to pay dividends. However, the terms of our debtagreements and instruments significantly restrict the ability of our subsidiaries to make certain restricted payments to us and our ability to pay dividends. Additionally, we and our subsidiaries may incur substantial additional indebtedness in the future that may severely restrict or prohibit our subsidiaries from making distributions, paying dividends or making loans to us.
The following performance graph and related information shall not be deemed “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under theSecurities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
The following graph illustrates the five-year comparative total return among Sally Beauty Holdings, Inc., the S&P 500 Index (“S&P 500”) and the Dow Jones U.S. Specialty Retailers Index (“DJ US Specialty Retailers”)assuming that $100 was invested on September 30, 2014 and that dividends, if any, were reinvested. The DJ US Specialty Retailers is a non-managed index and provides a comprehensive view of issuers, including our common stock, that are primarily in the U.S. retail sector.
Fiscal year ended | 2015 | 2016 | 2017 | 2018 |
---|---|---|---|---|
Sally Beauty Holdings, Inc | 86.77 | 99.39 | 123.25 | 114.14 |
S&P 500 | 71.54 | 75.33 | 80.22 | 122.22 |
DJ US Specialty Retailers | 93.83 | 123.23 | 122.55 | 111.25 |
Sally Beauty Holdings, Inc | 71.54 | 155.58 | 123.33 | 189.99 |
The following section discusses management’s view of the financial condition as of September 30, 2019 and 2018, and the results of operations and cash flows for the three fiscal years in the period ended September 30, 2019, of Sally Beauty. This section should be read in conjunction with the audited consolidated financial statements of Sally Beauty and the related notes included elsewhere in this Annual Report. This Management’s Discussion and Analysis of Financial Condition and Results of Operations section may contain forward-lookingstatements. See “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements that could cause results to differ materially from those reflected in such forward-looking statements.
We continue to make solid progress against our transformation as we play to win by focusing on hair color and hair care, improve our retail fundamentals, advance our digital commerce capabilities and drive cost out of the business. As part of this effort, we made progress on our supply chain modernization effort, reduced our debt levels, and rolled out new e-commerce tools such as the Sally Beauty Supply app
During the year, we began rolling out a new point-of-sale system in both SBS and BSG nationwide, which will allow our store associates to better serve our customers.
In February 2019, we announced our supply chain modernization plans to gain efficiencies and cost savings. During the fiscal year 2019, we have closed select fulfillment centers, including in the U.S. and within Europe, and identified a location in Texas and signed a lease agreement for a new approximately 500,000 square foot automated and concentrated distribution center, which we anticipate opening by March 2020. Additionally, we identified a location and signed a lease agreement for a new distribution center that will service operations in Ghent, Belgium.