Sally Beauty Holdings Inc (SBH)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 51.97% | 51.79% | 51.71% | 50.23% | 50.55% |
| Operating profit margin | 8.90% | 9.11% | 11.08% | 7.58% | 12.13% |
| Pretax margin | 6.90% | 6.59% | 8.60% | 6.77% | 9.58% |
| Net profit margin | 5.05% | 4.95% | 6.35% | 5.40% | 7.19% |
Sally Beauty Holdings Inc's profitability ratios reflect its ability to generate profits from its operations. The gross profit margin has shown a steady increase over the past five years, reaching 50.92% in September 2023, indicating efficient production and pricing strategies.
However, the operating profit margin has fluctuated, with a decrease to 9.18% in September 2023 from 9.57% in the previous year, suggesting a potential increase in operating expenses relative to sales. Similarly, the pretax margin also exhibited variation, declining to 6.76% in September 2023 from 6.40% in the prior year, reflecting challenges in controlling non-operating expenses and taxes.
Furthermore, the net profit margin has also experienced fluctuations, with a slight increase to 4.95% in September 2023 compared to 4.81% in the previous year. This indicates that while the company has been able to control its costs to some extent, achieving sustained growth in net profits may require continued efforts to contain expenses and optimize tax strategies.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 11.93% | 13.10% | 14.70% | 8.94% | 21.85% |
| Return on assets (ROA) | 6.77% | 7.12% | 8.42% | 6.38% | 12.94% |
| Return on total capital | 20.71% | 25.36% | 24.44% | 17.82% | 29.61% |
| Return on equity (ROE) | 36.29% | 62.51% | 85.44% | 1,195.36% | — |
Based on the provided data, Sally Beauty Holdings Inc's profitability ratios demonstrate some fluctuations over the years.
The Operating Return on Assets (Operating ROA) has shown a downward trend, declining from 21.82% in 2019 to 12.56% in 2023. This metric measures the company's operating income generated per dollar of assets and indicates a decrease in the company's operating efficiency in generating profits from its assets over the years.
Similarly, the Return on Assets (ROA) has also experienced a decline, dropping from 12.94% in 2019 to 6.77% in 2023. This ratio reflects the company's overall profitability and efficiency in using its assets to generate earnings, pointing towards a general reduction in profitability compared to the total assets employed.
On the other hand, the Return on Total Capital has displayed fluctuations but relatively higher levels of profitability, reaching 29.84% in 2019, before declining to 21.68% in 2023. This metric measures the return generated from all sources of capital, including both equity and debt, indicating the company's ability to generate profits from the total capital invested.
Furthermore, the Return on Equity (ROE) shows significant volatility, ranging from 733.31% in 2020 to 36.29% in 2023. This ratio reflects the return generated for the shareholders and points towards extreme fluctuations in the company's ability to generate profits from the shareholders' equity.
In summary, the profitability ratios for Sally Beauty Holdings Inc suggest varying levels of profitability, with some measures showing declining trends, indicating potential challenges in effectively utilizing the company's assets and capital to generate returns for its stakeholders.