Segments and Disaggregated Revenue

12 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segments and Disaggregated Revenue

15.Segments and Disaggregated Revenue

Our segments are defined on how our chief operating decision maker, which we consider the Chief Executive Officer and Chief Financial Officer together, regularly reviews performance and allocates resources to our operating segments.

Our business is organized into two reportable segments: (i) SBS, a domestic and international chain of retail stores and a consumer-facing e-commerce website that 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 distributor of beauty products and supplies that offers professional beauty products directly to salons and salon professionals through its professional-only stores, e-commerce platforms and its own sales force in partially exclusive geographical territories in the U.S. and Canada.  

The accounting policies of both of our reportable segments are the same as described in the summary of significant accounting policies contained in Note 1. Sales between segments, which were eliminated in consolidation, were not material for the fiscal years ended September 30, 2022, 2021 and 2020.

Business Segments Information

Segment data for the fiscal years 2022, 2021 and 2020 are as follows (in thousands):

	2022		2021		2020
Net sales (for the fiscal year indicated):
SBS	$	2,193,044	$	2,278,382	$	2,080,703
BSG		1,622,521		1,596,615		1,433,627
Total	$	3,815,565	$	3,874,997	$	3,514,330
Earnings before provision for income taxes:
Segment operating earnings:
SBS	$	350,884	$	417,658	$	237,588
BSG		193,407		205,078		194,206
Segment operating earnings		544,291		622,736		431,794
Unallocated expenses		179,074		199,682		159,009
Restructuring		27,577		4,611		14,025
Consolidated operating earnings		337,640		418,443		258,760
Interest expense		93,543		93,509		98,793
Earnings before provision for income taxes	$	244,097	$	324,934	$	159,967
Depreciation and amortization:
SBS	$	57,798	$	61,887	$	65,207
BSG		30,098		28,597		29,324
Corporate		12,033		11,717		12,248
Total	$	99,929	$	102,201	$	106,779
Payments for property and equipment:
SBS	$	53,788	$	43,165	$	73,130
BSG		34,312		24,880		27,338
Corporate		11,150		5,859		10,390
Total	$	99,250	$	73,904	$	110,858
Total assets (as of September 30):
SBS	$	1,195,732	$	1,235,427	$	1,370,745
BSG		1,251,455		1,179,263		1,106,801
Sub-total		2,447,187		2,414,690		2,477,546
Corporate		129,680		432,442		417,601
Total	$	2,576,867	$	2,847,132	$	2,895,147

Unallocated expenses consist of corporate and shared costs and are included in selling, general and administrative expenses in our consolidated statements of earnings. In the fiscal years 2022, 2021 and 2020, no single customer accounted for 10% or more of revenue.

Geographic Area Information

Certain geographic data is as follows (in thousands):

	2022		2021		2020
Net sales (for the fiscal year indicated):
United States	$	3,142,898	$	3,228,091	$	2,914,171
Other countries		672,667		646,906		600,159
Total	$	3,815,565	$	3,874,997	$	3,514,330
Long-lived assets (as of September 30):
United States	$	263,929	$	267,839	$	264,936
United Kingdom		9,147		15,089		20,183
Other countries		24,800		24,449		29,910
Total	$	297,876	$	307,377	$	315,029

Disaggregated Revenues

The following tables disaggregate our segment revenues by merchandise category. We have reclassified certain prior year amounts to conform to current year presentation.

	Fiscal Year Ended September 30,
SBS	2022			2021			2020
Hair color		38.2	%		36.3	%		34.4	%
Hair care		23.6	%		22.1	%		20.6	%
Styling tools and supplies		19.1	%		21.7	%		24.8	%
Nail		10.8	%		10.9	%		10.9	%
Skin and cosmetics		7.6	%		8.3	%		8.2	%
Other beauty items		0.7	%		0.7	%		1.1	%
Total		100.0	%		100.0	%		100.0	%

	Fiscal Year Ended September 30,
BSG	2022			2021			2020
Hair care		43.5	%		41.5	%		40.4	%
Hair color		39.0	%		39.8	%		38.3	%
Styling tools and supplies		10.9	%		11.5	%		12.7	%
Skin and cosmetics		3.8	%		4.0	%		4.3	%
Nail		2.4	%		2.7	%		3.6	%
Other beauty items		0.4	%		0.5	%		0.7	%
Total		100.0	%		100.0	%		100.0	%

The following table disaggregates our segment revenue by sales channels:

	SBS									BSG
	Fiscal Year Ended September 30,									Fiscal Year Ended September 30,
	2022			2021			2020			2022			2021			2020
Company-operated stores		94.0	%		94.1	%		91.8	%		66.4	%		69.1	%		68.9	%
E-commerce		6.0	%		5.9	%		8.0	%		12.3	%		9.2	%		8.7	%
Franchise stores		—			0.0	%		0.2	%		7.4	%		7.5	%		7.1	%
Distributor sales consultants		—			—			—			13.9	%		14.2	%		15.3	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%