Business Segments

6 Months Ended

Mar. 31, 2015

Business Segments

Business Segments

12.   Business Segments

The Company’s business is organized into two separate segments: (i) Sally Beauty Supply, a domestic and international chain of cash and carry retail stores which offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America and (ii) BSG, including its franchise-based business Armstrong McCall, a full service beauty supply distributor which offers professional brands of beauty products directly to salons and salon professionals through its own sales force and professional-only stores (including franchise stores) in partially exclusive geographical territories in North America, Puerto Rico and parts of Europe.

The accounting policies of both of our business segments are the same as described in the summary of significant accounting policies contained in Note 2 of the “Notes to Consolidated Financial Statements” in “Item 8 - Financial Statements and Supplementary Data” contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2014. Sales between segments, which were eliminated in consolidation, were not material during the three and six months ended March 31, 2015 and 2014.

Segment data for the three and six months ended March 31, 2015 and 2014 is as follows (in thousands):

	Three Months Ended March 31,						Six Months Ended March 31,
	2015			2014			2015			2014
Net sales:
Sally Beauty Supply	$	572,110		$	569,618		$	1,158,629		$	1,142,973
BSG	365,645			349,853			743,593			716,962
Total	$	937,755		$	919,471		$	1,902,222		$	1,859,935
Earnings before provision for income taxes:
Segment operating profit:
Sally Beauty Supply	$	106,089		$	105,474		$	207,268		$	209,017
BSG	55,607			50,882			112,197			105,717
Segment operating profit	161,696			156,356			319,465			314,734
Unallocated expenses (a)	(29,849		)	(29,000		)	(63,621		)	(57,063		)
Share-based compensation expense	(2,840		)	(3,268		)	(10,600		)	(11,790		)
Interest expense	(29,228		)	(29,258		)	(58,469		)	(57,747		)
Earnings before provision for income taxes	$	99,779		$	94,830		$	186,775		$	188,134

(a) Unallocated expenses consist of corporate and shared costs.