Good morning, ladies and gentlemen, and welcome to the Sally Beauty Holdings' conference call to discuss the company's fiscal 2012 third quarter results. (Operator Instructions) I would now like to turn the conference over to Karen Fugate, Vice President of Investor Relations.

Thank you. Before we begin I would like to remind you that certain comments including matters such as forecasted financial information, contractor business and trend information made during this call may contain forward-looking statements within the meaning of Section 21-E of the Securities Exchange Act of 1934. Many of these forward-looking statements can be identified by the use of words such as may, will, should, expect, anticipate, estimate, assume, continue, project, plan, believe and similar words or phrases. These matters are subject to a number of factors that could cause actual results to differ materially from expectations. Those factors are described in the Sally Beauty Holdings' SEC filings, including its most recent annual report on Form 10-K for the fiscal year ended September 30, 2011. The company does not undertake any obligation to publicly update or revise its forward-looking statements. The company has provided a detailed explanation and reconciliations of its adjusting item and non-GAAP financial measures in its earnings press release and on its website. With me on the call today are Gary Winterhalter, President and Chief Executive Officer; and Mark Flaherty, Senior Vice President and Chief Financial Officer. Now, I would like to turn the call over to Gary.

Thank you, Karen, and good morning, everyone. Thank you for joining us for our fiscal 2012 third quarter earnings call. Although we released third quarter results a couple of weeks ago, Mark and I will provide more color on those results and review some of our current quarter accomplishments. I'll start with consolidated results. Same-store sales growth for the third quarter was 5.2%. For the first nine months of fiscal 2012, same-store sales grew 7.1%. We believe that over the long-term, same-store sales will grow over 4% to 5% versus our historical run rate of 3% to 4%. Consolidated sales were $887 million, a growth of 6% over last year. Sales growth is primarily due to same-store sales and new store opening. The negative impact of foreign currency exchange offset sales growth by 132 basis points. Adjusted net earnings in the third quarter increased by 28.3% to $71.6 million or $0.38 per share, after adjusting for $2.1 million net of tax in unamortized deferred financing costs. Fiscal 2011 third quarter net earnings are adjusted for an after-tax credit of $13.4 million from a litigation settlement net of non-recurring expenses. In the third quarter, GAAP net earnings were $69.5 million, a 0.5% increase when compared to 2011 third quarter earnings. GAAP earnings per share were $0.37, flat when compared to prior year GAAP earnings per share. And finally, adjusted EBITDA in the third quarter was $155.7 million, strong growth of 17.3% over the prior year. We ended the quarter with a store count of 4,434, an increase of 172 stores or growth of 4% over last year. Turning to our segment performance, starting with Sally Beauty Supply. Same-store sales growth for Sally Beauty was 5.2%. If you recall, in the second quarter Sally comps reached a record high of 9.3% due…

Thanks, Gary. Net sales for the third quarter were $887 million, an increase of 6%. Same-store sales for the same period grew 5.2%. During the first nine months of fiscal 2012 consolidated same-store sales grew 7.1%. Consolidated gross profit was $444 million or 50.1% of sales, a 100 basis point improvement from the fiscal 2011 third quarter. Both businesses contributed to our gross margin expansion. Third quarter SG&A expenses were $291.5 million and represented 32.9% of sales versus 31% in the prior year. As a reminder, the fiscal 2011 third quarter SG&A expenses include a $21.3 million credit from a litigation settlement net of non-recurring charges. This credit is reflected in the BSG segment and in the unallocated corporate expenses in the amount of $19 million and $2.3 million respectively. Excluding the $21.3 million credit, SG&A leverage in the fiscal 2012 third quarter would have been favorable over the prior year. Unallocated corporate expenses, including share-based compensation were $27.7 million or 3.1% of sales. Consolidated operating earnings in the third quarter reached $136.5 million. Operating margin was 15.4% versus 16.3% in the prior-year quarter. Year-over-year performance is impacted by the litigation settlement credit of $21.3 million in the fiscal 2011 third quarter. Interest expense during the quarter totaled $26.9 million, a year-over-year decrease of $800,000. This decrease is due to lower average outstanding borrowings and lower interest rates on the long-term debt. The company's debt excluding capital lease is totaled approximately $1.5 billion at June 30, 2012. On May 18, we closed on the public offering of $700 million of senior notes due 2022 priced at $575 million. The proceeds from the offering with years to pay the outstanding principal accrued in unpaid interest on the Term B Loan facility as well as a $91.1 million repayment towards the outstanding…

Thanks, Mark. In summary, we had a great third quarter and our year-to-date performance is outstanding. For the first nine months of fiscal of 2012, net sales are up 8.6%, driven by same-store sales growth of 7.1%. Our consolidated gross margin is up 70 basis points with operating margin expansion up 70 basis points as well. With one quarter remaining, we believe fiscal 2012 will be another outstanding year for Sally Beauty Holdings. As always thank you for your interest in our company. And now, we will turn it back to the operator to take your questions.

(Operator Instructions) Our first question comes from the line of William Reuter with Bank of America.

I was wondering, if you could talk a little bit about you've been seeing in trends in terms of Europe, weather those trends have been showing weakening signs in light of the challenging environment there?

Actually, we haven't. Our only challenge in Europe right now is the U.K. with our distribution issues. Those are continuing and they're going to take a little longer to work out ultimately originally anticipated. But the rest of Europe is actually performing pretty well for us.

And then, you've kind of actually touched on my next question, which you guys have commented that bringing U.K. distribution in-house is going to negatively impact your margins for a while. I'm wondering, at what point you guys think kind of your goal is to get through those when those won't be a drag?

We will be completely through at the end of our second quarter. They should start to improve in our second quarter of '13, January through March.

And then, just lastly your thoughts on shareholder friendly, either share buybacks or dividends. How you guys are thinking about your uses of free cash flow at this point?

As we've said in the prepared remarks, as we said the board is having a fairly active dialogue on this topic right now, which is pretty timely considering that we're in the beginning throes of our annual plan for 2013. And also all our other uses of cash that typically are necessary for achieving the plan next year as far as CapEx, and what we may target for our growth rates organically as well as some of the acquisition targets that may or may not come to fruition overtime. So this is a very active influenced conversation right now. They're weighing both pieces in terms of whether or not a dividend program or a share repurchase program makes sense at this time. And the only thing I can say is that it's a very actionable conversation. And we'll keep you posted as more develops.

Our next question comes from the line of Karru Martinson with Deutsche Bank.

If you look at the gross margin here and especially on Sally Beauty, the retail side, I mean what's the mix of professional customers versus the retail customers? And where do you guys see that kind of going over time?

If you look at the gross margin here and especially on Sally Beauty, the retail side, I mean what's the mix of professional customers versus the retail customers? And where do you guys see that kind of going over time?

We really update that, Karru, on an annual basis. And I believe for 2011 it was 74%, 26%. It continues to swing towards the retail side and we generally have seen about a point shift per year in that. So I would fully expect it at the end of this fiscal year to be somewhere in the neighborhood of 75%, 25%.

And do you feel that's being driven by your CRM program or what's kind of behind that?

And do you feel that's being driven by your CRM program or what's kind of behind that?

Well, a lot of it is a CRM program. Yes. But also you have to consider that there is a finite number of professional customers out there that we can sell to as professionals. And obviously there is a much larger number of just general women out there in the public. So I think the potential market is much, much larger on the retail side than the professional side. The good news for us is our professional business does keep growing each year. It's just not growing at the rate that the retail business is.

And when we look product categories as the drivers of sales, hair extensions were big, for a while feathers were big. What are the next growth drivers to help you guys drive that organic growth going forward?

And when we look product categories as the drivers of sales, hair extensions were big, for a while feathers were big. What are the next growth drivers to help you guys drive that organic growth going forward?

Actually, the nail category has been extremely strong for the last two years. However, one of the things that slightly affected our comps I believe in the third quarter here was, we anniversaried a couple of major launches in the nail category. Last year at this time, Crackle was just speaking and the gel polishes were really just getting started particularly with Sally. And our nail categories were growing almost 30% in the third quarter last year and we had to anniversary that this year. So it was significantly less and that's the beauty industry. We had that happen with hair extensions in the past. Our color business which to me is our most important category is very consistent and still outpacing our overall sales growth.

I'm seeing a big job in the Caviar nail category going forward?

I'm seeing a big job in the Caviar nail category going forward?

Caviar nail category, no.

And then just lastly, when we look at the competitive landscape, you have one major competitor out there in the U.S. in particular. Where do you see the industry especially for the mom and pops going? Is there opportunity for more consolidation there as it ultimately going to just end up being a duopoly or what's the gain there?

And then just lastly, when we look at the competitive landscape, you have one major competitor out there in the U.S. in particular. Where do you see the industry especially for the mom and pops going? Is there opportunity for more consolidation there as it ultimately going to just end up being a duopoly or what's the gain there?

You're switching over to the BSG side. I think that small distributors have a lot of opportunity out there. This is an easy industry to get started in. There is a lot of small ones that are out there selling new brands. There is still opportunity for consolidation such as the Paul Mitchell distribution we brought in last fall in our BSG organization. But you're right, there are two major players our there, our organization and L'Oréal's SalonCentric. And that come from consolidation over the years. And I think like in many industries, it obviously does put some pressure on the smaller distributors. But the larger distributors such as us and SalonCentric's have multiple brands, can actually have a very good store organization. And that's very difficult to do for the smaller distributor that is really only selling one or two brands.

Our next question comes from the line of Simeon Gutman with Credit Suisse.

A couple questions going back to the distribution changes in the U.K. Can you just give us a bigger background on that process? I think initially we were targeting maybe by the end of summer to see that transition complete. And then can you also talk about the gross margin, which bounced back nicely despite that transitioning continue? So can you just talk about some of the drivers, was it still a drag on gross margin implying that the core business is up even more than it looks? And then how should we think about that progression going forward?

First of all, let me address your second question. The drag on margin is not as bad in the third quarter as it was in the second. And the additional distribution cost, do hit the gross profit margin line. The other comment you made is true, but maybe not to the degree that you might think, and that if you took that margin dilution out, the rest of the Sally business margin even grew a little better and that's true. Where we're going with it and why is this taking longer, the answer to that is real simple. When we first got into the 3PL issue over there, we had a distribution center in the midlands, in Blackburn that our lease was coming up on. It was a very old building. It was not a building that allowed us to distribute very efficiently out of. We knew we had to do something. And we thought the potential of looking at a third-party distribution maybe in necessity in some of the smaller countries that we get into. Eventually we decided and we also know that a lot of the major retailers in the U.K. do use a third-party distribution system. So we decided that we would try it. And the bottomline is within the first six months we realized it was a mistake. We then started searching for our own distribution center, which took a little longer than we expected. But we really felt like, we want to do this right, because it's a long-term commitment to fair amount of CapEx and it will help us greatly going forward. So we finally found another building, which happened to be in Blackburn as well, which is a good news there, as it's very central to our whole store base in the U.K.…

And to clarify on that. Does that mean, given the performance we saw this quarter that the bulk of disruption from margin standpoint is behind? Meaning, the performance this quarter will be more indicative of what we expect or I think what happened in the second, where some of those issues where around the overall gross margin?

Well, the hardest hit is behind us. It will start getting better sequentially over the next two quarters. And there is a couple reasons for that. The 3PL, we are very limited in the amount of product, we can shift out of there. So we do have another distribution center that has been used for a mail order business, our solon furniture business and our student kit business, which is another significant piece of our business. That warehouse is in Glasgow. So what we've done there is kind of move a lot of that business into an off-site facility, particularly the solon furniture and the student kits, because it's a day-in day-out business. We already have racking in there. So we are now using our own facility to supply stores with some of the faster moving skews, so that we're not dependant on the 3PL. So we have our vendors, drop shipping the major vendor, drop shipping a lot of product to the stores. We have our own Glasgow facility shipping the higher volume, but non-major vendor items. And then we have the 3PL essentially down to shipping the C and D items for us. Now, is that ideal for students getting product from three different points? Absolutely not. But it is helping us to improve the margins yet and it will get a little better this quarter, a little better in the first quarter of '13. And then we'll see a little bit of it left over in the second quarter and it should be completely out of it at the end of the second quarter.

And then my follow-up question is among the competitors, the branded manufacture competitors on the professional side, the ones that do distribution themselves. Can you talk to the competitive environment there? Has it changed any? Do you see any trends changing as far as manufactures doing more of the self distribution?

Nothing is really changed there, Simeon. The numbers that I see and the input that I get is, I don't think any of them are particularly happy with the results of that, the ones that have done it. And as I think we've talked about in the past Wella, for example, which is a P&G company has been giving us back chunks of distribution that we already had in store business, but they were handling the street business. And I think that they're finding that in certainly geographies, whether it be markets or entire states. It's just not economical for them to do that, which I guess if you put a pencil to that, it was probably always true. But just taken a little while to figure that out.

Our next question comes from the line of Meredith Adler with Barclays.

I think I'll segue into something you even talked about, I don't know for the past quarter or not. But about things that were happening in Europe in terms of getting product that you would never carry before in your stores. Is that a trend that's continued or are there any changes in what you're seeing in that way?

No. Our European business has continued to bring in new brands, whether they be from Europe or weather they be U.S. brands. Obviously, with a lot of the regulatory issues that are happening in Europe, the REACH issues as they are called. That's presenting some challenges for companies that manufacture outside the EU, to make sure that their products are complaint from an ingredient and packaging standpoint. So it's just putting new wrinkle to it. But I think that most of the big players that have to address that are well on their way to taking care of those issues. But a lot of the new product that we bring in to our European organization isn't necessarily coming from the U.S., because in many cases the freight is just prohibitive to do that. But we are continually adding brands in Europe from other parts of Europe.

And then, maybe talk a little bit, there wasn't anything said today about acquisitions, presumably nothing happened in the third quarter. Are you still seeing opportunity in Europe to do acquisitions or will you really rely on organic growth? And then, has anything changed in Latin America, is there any more prospects of finding decent quality assets?

Well, addressing Europe first, there is a tremendous amount of opportunity in Europe. Our issue there is we started talking about at least a year ago is we are in the process of putting all of our businesses there on an international ERP system. Today we operate our business in Europe is a combination of about five or six different acquisitions. And they are still operating on independent IT systems. So one of the things that we need to do, in order to be able to get real aggressive from an acquisition standpoint is to have an IT platform that's common through all of these companies that we operate. And that will give us a lot of efficiencies and a lot of access to information across all of the businesses there. That will be very helpful. So we just finished rolling that out in Mexico. That was kind of our test. And it went well there. And we are starting this fall with Europe. And it will probably take us at least a year is my guess. And it doesn't mean we won't be making small acquisitions in Europe in the meantime or possibly even a large acquisition that's capable of standing on its own until we get it converted to the IT platform. But it will be much easier to do acquisition small or large much more rapidly once this system is in place. South America, same story, I think there's a lot of opportunities there. The problem there seems to be more of getting perspective sellers to be willing to indemnify us for anything that has happened in their business prior to our purchasing it. So South America reminds me a lot of Southern Europe. It's just a different mentality and it's a whole different though process when it comes to taxes and who is responsible for what, that sort of thing. But we are very happy with the business we have in Chile. We're very, very happy with the Mexico. Of course that's been 11 years there already. And I do believe that we will get started in some of the larger countries. In South America, it's just taking a little more time for the reasons I've just mentioned and we expect it.

And I just had one final question about sales. I mean, I understand that the second quarter was just exceptionally good and you have factors that were driving that. First quarter was also better, especially at the stores than the third quarter. And I'm just wondering if there was anything particular that made that happened and when we think about the fourth quarter, should we be prepared for either tough comparisons or anything that's going to be helpful?

Well, first of all the first quarter, you're absolutely right. We had an excellent first quarter which was very much driven by politics. We just had a marvelous December and there is a lot of reasons for that. But the fact is that we just had a great December which drove Q1. Q2 we've talked about all the reasons, why that was strong. And if you look at Q4, we do have strong comparisons. No question about that. I believe that if you look back, we were better than 6% comps for the total company last year. But I think on the long term if you kind of model the guidance we're trying to give that we believe that comps will stay in that 4% to 5% range. You're going to have some upside surprises to that occasionally which we did in Q1 and Q2 and actually Q3 was above the 5% level. I feel good about giving you that as guidance. But, we are up against strong comps from last year, Q4. I don't think there is any question that traffic in retail in generally has slowed a bit. I'm not sure, how much of that isn't due to the extreme weather that we've been having. I read all of our fields monthly reports every month. And the reports from the Northeast and the Midwest and people that are just not used to this kind of heat. And I'm not blaming our third quarter or giving you any negative guidance for the fourth quarter based on weather. But I do think that's a factor with all of retail. And we are to some degree a retailer that lifts off traffic especially for new business in shopping centers. So when you hear traffic being soft for players like Wal-Mart and Targets and so forth. It's going to have some minor impact on our business.

Our next question comes from the line of Jason Gere with RBC.

Gary, just kind of following up on the line of question from Meredith, I think when you guys did your pre-announcement and then your conference call, I think the following day. You did talk about reiterating kind of that five to seven comps for this year, also that I think comps lead better than six. So just without the puts and takes out there, and then I hear you once some of the traffic at retail slowing a little bit, but are you still comfortable with kind of that dialogue that you laid out two weeks ago?

Yes, for this year our value with comp right now is 7.1%. So even if we fall in the 5% range, which would be the high end of our 4% to 5% guidance, that still puts us over 6% for the year. So I'm very comfortable with what I said two weeks ago.

And then I guess, the second question I had was just about the operating margins at Sally which I think hit at a record high, this quarter even with me some of the issues with the U.K. I was just wondering like, how do you measure some of the productivity of deals that are out there. When you see that there is a deal that could drive sales, do you sometimes forgo that, because it's just not productive enough or profitable enough, meaning that you rather take a little bit more margin than ticking sales that the returns are not as good. So I was just wondering, if we put anything in that third quarter that might have reflected that. Because the margins were still so good, even with the couple of the issues that you mentioned.

No, first of all, obviously it's a balance to keep strong promotions and margin in check. But just remember something about our business. We don't have a six pack of Coca Cola that we can run out great special one, as it generate the tremendous amount of traffic and drive sales. Our products are basically replenishment products and are bought as product is used or it's needed. Hair color, for example, our largest category. We can put a tremendous sales on hair color, and possibly get somebody to supply two or three tubes in one visit, as opposed to the one tube they would normally buy and then comeback next month for the second. That could drive some short terms sales but you're going to loose that customer, the following two months. So we don't really have a lot of commodities that we could take business from someone else because so much of our businesses are on brands, and do some covered stuffing. So that's not to say, that we're just saying, hey, we want our markets to go on up exit, we don't care what happens to topline. That's not the cast at all. We are aggressive with our suppliers to keep our pricing right because one of the things that we are known for is particularly in our professional segment of the Sally business is price. We are a price leader to the open line customer professional. And to the consumer, even though many of our products are higher cost than a shampoo would be in mass or something. We're generally selling larger sizes and with more of a concentrates. So the value is there. And it just isn't easy for us to take an item or two or promote 100 to add really rift the price on it, and accomplish anything, other then like I said. You might drive a little bit of short term sales and you're going to give up some margin and you're going to just give it back though in the following months.

And then when you look at the margins, both, again BSG and Sally kind of head highs. What's the ceiling as you look out the next couple of years? Do you see more upset on the BSG business and that's kind of, I guess, factoring in some acquisitions down the road as you kind of hit the synergies there, or how do you look at Sally, because for a specialty retailer it's best-in-class?

Both with Sally, nothing has changed since we started Sally and particular since we spun out and I first started explaining to people that Sally has three margin drivers. Our retail business is driving margin for us than our professional and it's growing faster than professional. Our own brand business or as some people would call it, private label is also outpacing our overall sales growth rate, and that to a much better margin. And we also get a little bit of margin help each quarter from direct importing sourcing. I said this, five or six years ago, that I didn't see that changing and I still don't see that changing in the foreseeable future. It's just the way our business is. The retail is growing faster than the professional. And we're thankful for that, and it's nice for our margins. But the truth of matter is there is not a lot we can do about that, because there is just more retail people out there than there is professionals. And that the own brand business, as we acquire more brands and as we do a good job marketing the brand that we own, that is also going to improve, and I've said many times that I enjoy taking investors into a store and challenging them to tell me which brands are ours, and what's really funny is our own employees, don't know it half the time. So it's not like we're out there hammering these private label brands at the expense of our branded goods, if we do a better job at marketing the product, we get the sale. And it isn't price driven, because our branded goods are not necessarily and in many cases, not the lowest priced brand on the shelf. Now, BSG margins will continue to…

And the last question, just on the inventories. I know it's up 8% on a per-store basis. I think the growth is a little bit higher than the last year quarters. I was just wondering if that was in particular weighed by the U.K. issues out there. If there is anything that you would kind of call out.

Little bit of it is the U.K. issue. But also on the Sally's side, we have been expanding some products selection in the Sally stores. Gelish is a good example of that. It's a very high price gel polish line, and they've been expanding shades which is running up our inventory a little bit. But there is a lot of things that we've been doing assortment-wise there. We also as, I had mentioned we put Mexico on our ERP system this quarter. When you first do that, its kind of counterproductive to inventory, because as you get this thing up and running, you want to sure the stores are properly stocked, in case you have anything happen in the short term, you don't wanted to hurt revenues. So that has a little bit, I mention the U.K. and we also deliberately on the Sally side, one of the things that historically we've done and I think we've talked about this in the past, but are bonus system around here, for executives are primarily revenue, EBITDA and working capital driven. Now, I think that we put together an inventory schedule at the beginning of the year. And we would hold to that, come hell or high water, whether sales were running 4% to 5% above that or right at flat. Well the problem with that is when we were running, as you saw in the first and second quarter significantly above our own sales planned, and at your expectations and everyone else is, it was putting pressure on our inventory. We were seeing stock outs that we shouldn't have, but the kind of the people managing the inventory were saying, okay, great, that's driving our working capital number way down and it's going to be great for bonuses, but it wasn't helping sales. So around the first of the year, calendar year January, we made a conscious decision to let our inventory drift a little more with our sales rate. So if our sales were running 4% to 5% ahead of our plan, we're letting our inventory drift up maybe not 5% but at least 3% or 4% instead of holding it flat. Now, that may not be the best thing for all of our bonuses, but it's the right thing to do for the business and we are also looking at a better way to look at that for bonus purposes, so there is actually not on incentive to kind of hurt our service levels.

The next question comes from the line of Chris Ferrara with Bank of America.

I guess can you talk a little bit about the retail environment, again. And I guess, either to your point we've seen retail traffics slow. Are you saying, it has a little bit of affect on your business, but I guess, can you talk about the quarterly, kind of cadence of the comps through last quarter or through this Q3? And may be how it's progressed? Are you seeing kind of a progressive weakening related to the economic environment out there?

Well, if you look at our comps for the last three quarters, it hasn't been a progressive weakening. We had unusually high comps in the first quarter than against in the second quarter, in the third quarter if you look at our average over the last two or three years we were very much inline. Last year our comps in total were six in change, I believe that that will be the case this year, going into the fourth quarter with the three quarters 7.1% comps. Obviously, you've had to have a real train wreck in the fourth quarter to fall below six. So I don't look at it as weakening of our comps. I look at is as really being back to little more towards, our norm. And I gave the reasons for the second quarter comps being as strong as they were. But the other thing that I look at even more than sales comps is traffic comps. And our traffic comps are good. They are positive, and I also look it our average ticket which is up nicely in both of our businesses, the BSG and selling. And for us, that's really more important. And I also look at the issuance of Beauty Club cards because I know that when a person joins that program long term, we're going to see him more often, and they're going to sell more. So when I see that number going up 20% for the quarter, and the sales to the club members growing up 23% for the quarter, I'm very encouraged by that. The only weak spot we saw was retail Non-Beauty Club card sales. It was still positive. We had the professional piece, and we've got the retail piece. But the retail piece is really Beauty Club card members…

I guess, I just meant what had June look like? I mean you guys had said April was sort of ahead of your expectations, and I was wondering if you can give a little color on what May and June look like progressively. And since you gave April last quarter, I'll ask you, could you talk a little bit about July now?

We really don't get into months, and I'll you why it is so much that we don't want to, but we operate on a calendar month and calendar quarters. So for BSG, for example, BSG does a significant percentage of their business on Monday in the stores, because it's generally the day that salons are closed, so that's when professional shop. In a month that you have five Monday, BSG is going to look like it's off the charts. In a month, where you're up against a month last year that had five Mondays, and this year you have four, it's going to look back. So I would be misleading to if we were on a retail calendar, where you had exact comparisons would be much more inclined to occasionally talk about that, but we don't, because though the way we operate and unfortunately, it's the same thing with Sally. In the months' where we have five Fridays and five Saturdays, Sally looks wonderful from a cost standpoint. But when you get the opposite of that, and you're comparing to a prior of five Saturdays and five Friday's, it look soft. So it would be misleading and unfair to give you detail on a month-by-month basis, which is the primary reason, we don't do it. As you look at crazy things, in the U.K. it's not a huge piece of our business. But when we look at the comps in the third quarter, and last year we were up against and I believe it was April, the Royal Wedding and that absolutely destroyed our comps last year for April. So April this year, it was wonderful. But then you get into May, and this year when you had the Jubilee, where they actually closed business in the U.K. for a couple of days, which destroy May's comps. And now, I talk to our people over there, and it's like I talk to people here, and they blame things on the snow. Over there they blame it on the Olympics, but it's I think things like that where you have a minor impact on business when your business is 80% professional as ours as to the U.K. Sometimes the impact is felt even greater, simply because, I can tell you right now, in the U.K. a hell of a lot of people got out of the country because of the Olympics and August is a big vacation month there anyway. So the business is probably going to be a little bit choppy there, this quarter. But I still think the majority of it is our distribution issues, but there are other influencing factors.

And I guess, just finally on nail, I know you mentioned that the year ago comp was 30%. I guess what nail and skin combined are like 13% of sales. But did nail shrink this quarter on the ridiculously high comparison, because that could be a pretty big drag to your comp in one quarter?

No, it is great. It was up, but nowhere near 30%. And the last year, I think for the quarter it was closer to 26% or 27%. I think I said, between 25% to 30%, but no unfortunately because particularly the Gelish business, I believe is here to stay where the Crackle was a fad, kind of like the Feathers were fad, and the Hunger Games thing was a fad. So those are smaller parts of the nail business but they are very faddish. The gel business, I believe is a technology that is here to stay. What we're competing with there, is it was the introduction in the third quarter of last year for a lot of these gel polishes. So you always see kind of the bubble and that it evens out into a steady business, which is exactly what's happening. But it is at that higher level, because we're still seeing positive comps in that category.

Thanks. Operator, thank you. To summarize, I think we've delivered consolidated sales growth by about 6%, and same-store sales growth of 5.2% in the fiscal 2012 third quarter. We're very pleased with those results. Gross profit margin expanded by 100 basis points and we achieved EBITDA growth of 17.3%. So once again, I'd like to thank you for your interest in Sally Beauty Holdings. And we look forward to seeing you soon.

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