Shaver Shop says beauty and personal care strong as people opt for DIY at home to save money

More and more Aussies are turning to DIY haircuts and beauty treatments at home to save money, according to Shaver Shop.

Shaver Shop believes consumers will increasingly opt to do their own haircuts, waxing, clipping and other beauty procedures at home rather than go to a saloon in a bid to cut costs.

The beauty and personal grooming retailer – which sells a large range of clippers, shavers, hair removal products, electric toothbrushes and beard trimmers from 122 stores across Australia and New Zealand – has also witnessed a moderate improvement in sales since the start of the new year.

Although sales were softer than expected, with sales down in the second quarter, as interest rate hikes and other economic headwinds challenge the retail sector.

The company was a winner through extensive Covid-19 lockdowns as hairdressers and beauty salons were forced to close, and both men and women chose to buy clippers or waxing treatments to look after their own needs at home. The return to working at the office also provided an uplift to sales last year as people re-entered the workforce and wanted to ensure they looked their best.

Now Shaver Shop, which unveiled its interim results on Tuesday, believes cost of living pressures driven by steeper interest rates and other cost of living pressures could bolster its key retail segments.

“Through the pandemic, obviously we had a lot of channels switching from professional salons, beauty clinics, to our business. And the gut feeling is if things do get tighter … maybe the frequency may reduce a little bit and people just switching to beard trimmers, IPL (intense pulse light) hair removal treatments, which obviously is our sweet spot,” Shaver Shop chief executive Cameron Fox told The Australian.

“Men’s and women’s beauty and personal care remains an attractive segment. With rising interest rates and other costs of living, Shaver Shop offers budget-conscious DIY alternatives to going to the barber or beauty salon, with products that are relevant for all demographics.”

Mr Fox said customers would still visit the barber for a beard treatment or haircut but for an “everyday” type of product the push will be to his retailer’s home products that can save people money in tighter economic times.

Shaver Shop sales were weaker than expected towards Christmas.

Shaver Shop’s sales rose 3.8 per cent to $131.9m over the six months to December 31, a record performance, with profit up 4.5 per cent to $13.7m. The company declared an interim dividend of 4.7c per share, up slightly from 4.5c last year, and payable on March 16.

“Shaver Shop delivered another strong half-year result with record sales and gross profit,” said Mr Fox. “While trading in November and December came in a bit softer than we expected, we consciously chose not to chase sales at low margins, leading to a very pleasing gross profit margin of 44.3 per cent for the half and a strong bottom line result.”

Second quarter sales fell 4.1 per cent and Black Friday sales were solid, with growth on the prior year over the promotional period. Foot traffic was weak through December until Boxing Day.

Softer sales experienced in the second quarter versus the prior year was largely offset by gross margin increases across several categories and operational expenditure optimisation initiatives.

Mr Fox said Shaver Shop’s exclusive ranges contributed 51 per cent of sales and close to 60 per cent of gross profit in the half. Sales contribution was also broadly spread, with no one product or category dominating sales or profit contribution.

From January 1 to February 18, total sales were down 2.1 per cent on the comparative 2022 period, which represented a moderate improvement in the sales growth rates observed in November and December. Gross profit margins remained well above long-term averages.

No profit guidance for the full-year was provided.

Shaver Shop ended the half with $34.1m in cash and cash equivalents, and no debt.

Its shares closed on Tuesday up 1c at $1.22.

Originally published as Shaver Shop says beauty and personal care strong as people opt for DIY at home to save money