May 8, 2008 / 11:27 AM / in 9 years

UPDATE 2-Sally Beauty profit tops view; shares jump

(Adds details on analysts’ estimates, stock activity, cost savings; changes headline)

NEW YORK, May 8 (Reuters) - Sally Beauty Holdings Inc (SBH.N), which sells beauty supplies and hair products, posted higher-than-expected quarterly profit on Thursday, helped by new stores and higher sales at existing stores, sending shares up 14 percent.

Net income rose to $12.4 million, or 7 cents per share, in the fiscal second quarter that ended March 31, up from $11.0 million, or 6 cents per share, a year ago.

Excluding an interest rate swap expense, the company earned 10 cents per share, which topped analysts’ average estimate of 7 cents per share, according to Reuters Estimates.

Quarterly net sales rose 5.6 percent to $643.3 million and sales at stores open at least a year rose 2.8 percent.

Sales rose 6.3 percent in its Sally Beauty Supply segment and 4.5 percent in its Beauty Systems Group segment.

The company, which was spun off from Alberto Culver Co (ACV.N) in November 2006, is in the process of streamlining its warehouses at its Beauty Systems Group. The project, which includes closing some facilities and moving to new facilities, could bring $10 million in annual savings, beginning in fiscal 2009, the company said.

The company said it added 13 net new Sally Beauty Supply stores in the quarter, bringing the total to 2,739 stores. The Beauty Systems Group ended the second quarter with 905 stores, which is 6.8 percent higher than last year.

Sally Beauty shares were up 81 cents at $6.57 on the New York Stock Exchange. (Reporting by Martinne Geller; Editing by Maureen Bavdek and Dave Zimmerman)

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