Alec Legg

Alec Legg asked about the promotional environment during the holiday season compared to expectations and the outlook for promotions in Q2 and the rest of the year. He also inquired about the type of customers shopping fragrance at Sally, specifically if they are existing customers or if it's attracting a new customer base.

Answer

Denise Paulonis, President and CEO, stated that promotional levels were slightly up year-over-year in both segments, but strong gross margins were maintained. She emphasized the focus on value messaging, such as the 'Save while you skip the salon' campaign, and does not expect material changes or a highly promotional period in Q2. For fragrance, she indicated that it's primarily existing customers due to the in-store launch without a heavy marketing push to a new customer base, with plans to expand communication as it rolls out to more stores.

Alec Legg inquired about the promotional environment during the holiday season compared to expectations, how promotions might trend into Q2 and the rest of the year, and whether fragrance customers at Sally are primarily existing shoppers or a new customer base.

Answer

Denise Paulonis, President and CEO, stated that promotional levels were slightly up year-over-year in both segments but strong gross margins were maintained. She emphasized the importance of value messaging, citing the 'Save While You Skip the Salon' campaign, and anticipated no material changes or highly promotional periods in Q2. Regarding fragrance, Paulonis indicated that early sales were primarily driven by existing customers due to the in-store launch, with plans to expand marketing to a broader potential customer base as distribution grows.