Sally Beauty Holdings, Inc. (SBH) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Sally Beauty Holdings, Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Denise Paulonis, Director, President and Chief Executive Officer. The floor is yours.

Good morning, everyone. Welcome to the Sally Beauty Holdings, Inc. Annual Meeting of Stockholders for 2025. I'm Denise Paulonis, Director, President and Chief Executive Officer. As previously announced in the notice and proxy statement, today's stockholder meeting is being held virtually. On the meeting site you logged into for today's meeting, there's an agenda and rules of procedure. Please take a moment to review the rules that are posted. We will follow them closely, so that we conduct this meeting efficiently. First, I'll introduce our Board of Directors and some other officials. Second, we will vote on the proposals listed on the agenda. Third, we will report the preliminary voting results. And finally, we will answer your questions about our company. Now it is my privilege to introduce my fellow directors of Sally Beauty Holdings. With us today are Rachel Bishop, President, Hefty Tableware, Reynolds Consumer Products; Jeffrey Boyer, former Chief Financial Officer and Chief Operating Officer of Fossil Group, Diana Ferguson, our Chair of the Board and Principal of Scarlet Investments, LLC.; Dorlisa Flur, Strategic Adviser and former Chief Strategy and Transformation Officer, Southeastern Grocers, Inc.; James Head, former Chief Financial Officer of Multiplan Corporation; Lawrence Chip Melo, former Chief Financial Officer of Sprout partners Market; and Erin Nealy Cox, partner of the law firm of Kirkland and Ellis. And with me on the call today is Scott Sherman, Senior Vice President, Chief Legal and Human Resources Officer. Our independent auditors, KPMG LLP, are represented here today by Rachel Storey and Chris Hughes. A representative from Computershare, Stephanie Simon is here serving as our independent inspector of election. And now Scott Sherman will present the Corporate Secretary's report and explain our voting procedures.

Thank you, Denise, I am presenting for the record an affidavit certified in an annual report and Form 10-K for 2024, and a proxy statement and proxy card for this meeting were mailed on or about December 11, 2024, to all stockholders of record as of November 25, 2024, which is the record date for this meeting. Accordingly, this meeting has been duly called under the laws of Delaware, the state of incorporation of Sally Beauty Holdings, Inc. and under the company's bylaws. Representative of Computershare has been appointed by the Board of Directors as inspector of election for this meeting. She has executed an appropriate oath of office. The inspector of election has presented for the record. A certificate of quorum indicating that there are represented at the meeting approximately 95,995,209 shares of the company's common stock. Each share of common stock is entitled to 1 vote at this meeting. Therefore, shares representing 93.68% of the voting power of the company's outstanding shares are represented at this meeting in person or by proxy, so a quorum is present. Everyone in attendance online can do the agenda listing the order of business to be conducted. This meeting has 5 proposals before it. Number one, the election of directors; number two, the approval of the advisory resolution endorsing the company's compensation of executive officers including the company's compensation practices and principles and their implementation. Number three, the approval of the Sally Beauty Holdings 2025 Omnibus incentive plan. Number four, the ratification of the selection of KPMG LLP as the company's auditor for the 2025 fiscal year. And number five, vote on a stockholder proposal regarding a change to our director election/resignation guidelines. All of these proposals are described in the proxy statement and will be presented in the order in which they appear on the agenda. No other nominations for election as a director of proposals were received in accordance with the company's bylaws or the SEC's proxy rules. So no additional nominations or proposals will be considered at this meeting. Voting at this virtual meeting will be done electronically via online ballot. If you wish to vote now, click on the Vote tab in the meeting center. Stockholders who executed proxies or voted online or by telephone do not need to vote again by electronic ballot unless they wish to change their vote. After the proposals have been considered at this meeting and the electronic ballot completed, the polls will close and normal ballots will be accepted. An opportunity to respond to questions that have been submitted to us will be provided at the end of the meeting. Please hold your questions until that time. It is now 9:05 a.m. Central Time on Friday, January 24, 2025, and the polls are now open. The polls close immediately following the presentation of the fifth proposal and my call for the collection of ballots. We will now consider the 5 proposals before. Proposal 1, the first proposal is the election of 9 directors Rachel Bishop, Jeffrey Boyer, Diana S. Ferguson, Dorlisa K. Flur, James M. Head, Laurence Chip Molloy, Erin Nealy Cox, Denise Paulonis and Deborah Perlman. Each individual has been nominated to serve as a Director of Sally Beauty Holdings, Inc. for a 1-year term ending at the annual meeting in 2026. This proposal is discussed on Page 12 of your proxy statement. The first proposal is now submitted to a vote of our stockholders. If you are voting by electronic ballot and have not done so, please vote your shares like clicking on the Vote tab on the meeting site at this time, and we will proceed to you for the proposal. [Voting]

The second proposal is for the approval of the advisory resolution endorsing the compensation of the company's executive officers, including the company's compensation practices and principles and their implementation. This proposal is discussed on Page 47 of your proxy statement. This second proposal is now submitted to a vote of our stockholders. If you are voting by electronic ballot and have not already done so, please vote your shares at this time by clicking on the Vote tab on the meeting site, and we will proceed to the next proposal. [Voting]

The third proposal is for approval of the Sally Beauty Holdings, Inc. 2025 on the business incentive plan. This proposal is discussed on Page 90 of your proxy statement. This third proposal is now submitted to those of our stockholders. If you are voting by electronic ballot and have not already done so, please vote your shares by clicking on the Vote tab on the meeting site at this time. [Voting]

The fourth proposal is for ratification of the selection of KPMG LLP as the independent auditors for the company for fiscal year 2025. This proposal is discussed on Page 100 of your proxy statement. This fourth proposal is now submitted to a vote of our stockholders. If you are voting by electronic ballot and have not already done so, please vote your shares by clicking on the Vote tab on the meeting site at this time. [Voting]

The fifth proposal is a shareholder proposal requesting that the Board adopt a new director election/resignation guideline provision to address those situations where one or more incumbent Board nominees failed to receive the required majority vote for reelection. This proposal is discussed on Page 102 of your proxy statement. The fifth proposal is now submitted to a vote of our stockholders. If you are voting by electronic ballot and have not already done so, please vote your shares by clicking on the Vote tab on the meeting site at this time. [Voting]

This completes the voting on proposals before the stockholders.