Good morning, ladies and gentlemen and welcome to the Sally Beauty Holdings Conference Call to discuss the Company’s Fiscal 2014 Third Quarter Results. All participants have been placed in a listen only mode. After management’s prepared remarks, I will facilitate a question-and-answer session [Operator Instructions]. Now, I would now like to turn the call 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, contracts of 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 or 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 filed September 30, 2013, its quarterly report on Form 10-Q filed May 01, 2014, and its most recent quarterly report on Form 10-Q being filed today. 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 items and non-GAAP financial measures in its earnings press release on its website. With me on the call today are, Gary Winterhalter, Chairman, President and Chief Executive Officer; Chris Brickman, President and Chief Operating Officer; and Mark Flaherty, Senior Vice President and Chief Financial Officer. Now, I’ll turn the turn the call over to Gary.

Thank you, Karen, and good morning, everyone. Thank you for joining us for our fiscal 2014 third quarter earnings call. I’ll start today with an overview of our financial results and business initiatives. Mark, will then take you through the quarter in more financial detail, and then Chris Brickman will provide comments about his first few weeks on the job. Now turning to the results for the third quarter. On a consolidated basis, same-store sales increased by 2.1% versus 0.7% in the year ago quarter. Consolidated gross profit margin in the third quarter reached 50.1%, flat when compared to last year. Even though consolidated gross margin was flat, it’s only the third time in our history that we’ve achieved gross margin above 50%. Now turning to Sally’s performance, same-store sales growth for Sally Beauty was 1.8% in the third quarter versus down, 0.8% in the year ago quarter. Net sales for Sally Beauty Supply reached 585 million, an increase of 4.5%. Sales growth at Sally was due to new store openings and same-store sales growth. Favorable foreign exchange rates positively impacted sales growth by 90 basis points. Beauty card sales increased 9.4% for the quarter. Club membership grew 10.1% to reach 8 million members, and membership renewals reached 57%. We are pleased with our BCC performance, in fact, during the quarter, 65% of our 8 million BCC members shopped at Sally. As we begin to roll out our new CRM program, we are optimistic that we can refine our marketing tactics to further identify our customers’ shopping behavior and become more relevant to them, thereby increasing our share of their Beauty purchases. Gross profit margin in the third quarter for Sally was 55.4% versus 55.6% in the prior year quarter. This 20 basis points decline was predominantly due to customer…

Thanks, Gary. Consolidated net sales for the third quarter were $949.3 million, an increase of 4.1%. This increase was primarily driven by same store sales growth of 2.1%, 177 net new store openings, and the favorable impact of foreign currency exchange rates of 40 basis points. Consolidated gross profit was up 4.1% over the prior year. Gross profit as a percentage of sales was 50.1%, flat compared to the fiscal 2013 third quarter. Consolidated gross margin for the first nine months of fiscal 2014 is 49.6%, which was also flat for the first nine months compared to the fiscal 2013 comparable period. In light of this performance, we believe that it’s prudent to revise our 2014 full year margin guidance from a 20 basis point to 30 basis point margin expansion to flat over the prior year. Third quarter GAAP SG&A expenses including unallocated corporate expenses and share-based compensation were up 8.5% and 33.8% on a percent of sales basis. SG&A expenses excluding the management transition costs and expenses related to the data security incident, totaling 4.4 million pre-tax were up 7%, and on a percent to sales basis was approximately 33.3%. On a year-over-year basis, SG&A expenses were above the prior year primarily due to higher enrollment in our self-funded healthcare plan and an increase in marketing expenses in our sale of U.S. business. Unallocated corporate expenses including share-based compensation, management transition cost of the data security incident expenses were 37 million or 3.9% of sales versus fiscal 2013 third quarter expenses of 27.8 million or 3.1% of sales. We continue to expect consolidated year-over-year SG&A expense growth for the second half of fiscal 2014 to be in the range of 6% to 8%. Consolidated operated earnings in the third quarter decreased 5.3% to 135 million. Operating margin was…

Thank you, Mark, and good morning everyone. To begin, I would just like to mention how excited I am to be here today as part of Sally Beauty Holdings management team. And I have the opportunity to work with Gary, Mark and other Sally executives to build on, what I believe, is a healthy business with a terrific future. During my 18 months as a Sally Beauty Holdings board member, I had the opportunity to learn the business and its unique characteristics. I accepted the position of COO, and I’m excited about becoming CEO because I believe the company is well positioned for long term growth and profitability. Over these past few weeks, I have met with the management team, I have visited stores and suppliers and I have vetted [ph] the competition. My primary takeaway is that we have a solid core business and a loyal customer base. But there are things that we can improve on that will drive better operating results going forward, and the team is already working on many of those opportunities. I don’t want to provide a lot of detail here now, but few of our initiatives include, improving our marketing execution and efficiency and clarifying our message for the consumer; bringing new product and merchandizing innovation to our stores, in order to drive consumer engagement and excitement; upgrading our websites to be more content driven and the play of bigger role in the consumer and customer recruitment process; clarifying our global growth strategy, so that we can move faster in high opportunity markets and segments; and testing low cost waves to refresh the look and feel of our stores. Over the coming months, I will provide more detail around all of these initiatives but today, I want to assure that I do not intend to reset the bar in terms of expectations or change our core strategy. I am confident that we have a solid foundation for growth which we can build on, to improve the consumer experience and in return, drive positive results going forward. Now I’ll turn it back over to, Gary.

Thanks, Chris. In summary, we had a good quarter with sales improvement in our Sally U.S. business and a solid performance in our BSG segment. On a consolidated basis, same-store sales grew 2.1% with total sales growth of 4.1%. We purchased $176 million or 6.9 million shares of our stock which reflects our confidence in the stability of our cash flow and ongoing financial performance. Now I’ll turn it over to the operator to take your questions. Operator?

Thank you. [Operator Instructions]. And our first question from the line of Simeon Gutman with Morgan Stanley. Please go ahead. Simeon Gutman – Morgan Stanley: Good morning, everyone and welcome Chris. Gary, first just a big picture question, for the past several quarters business has been – it’s been improving, but it’s below average growth versus what it did the prior few years. And we’ve been seeing these signs of improvements over the past couple of quarters in particular, but not everything is clicking just yet. Sales were good this quarter, margin, SG&A not as much. So my question for you, and this may be relevant for Chris as well, do you anticipate that clicking and smoothing out of this business is going to return where you see top-line improvement at the same time of margin? Or is there something different about the business such that gross margin and the operating leverage is not going to be strong going forward?

No, Simeon I don’t think anything has changed. All of the margin drivers and those levers are still in place. We still continue to do more retail business every quarter than we do in professional. One of the things that I think we didn’t anticipate this quarter as far as gross margin went was, we talked about our 50th anniversary specials work which were a lot of buy 1 get 1 and the professional customer reacted to those – actually more than we anticipated. So, if you look at our sales breakdown, and I’ve always told you our professional business grows 1% or 2% a year was actually up over 3% this quarter, and a lot of that was in the 50th anniversary. And of course as you know that professional business is our lowest margin piece of the business. So that gave us some challenges on the gross margin. In Sally, however, I’m very pleased with the margin expansion we saw in international as well as BSG. Now as far as we – going forward like I said, our control labels our private labels as you like to refer to them are still growing faster than our sales rate. We are still getting a little bit of deterioration in margin from some of the product that we brought in specifically but that’s becoming a very, very tiny drag. I mean the combination it’s not even 10 basis points anymore. So I am not concerned about gross margin going forward. The other piece of that, and I have said through the last couple of quarters, if you just sit down and you do the math and you saw this quarter that BCC was up over 9% and the retail business, the negative part of the non-BCC retail is getting smaller and smaller. BCC is also up to 57% of retail and as that gets up into the low to mid 60s which I have every reason to believe that it will, the waiting of those two pieces of the business from a margin standpoint is going to slowly shift and when you’re anniversarying the previous year, it’s going to start increasing margin again as it has in the past. Did I answer all pieces of your questions, Simeon? Simeon Gutman – Morgan Stanley: Yeah, you did. So, my one follow up is on the top-line because I think retail broadly was pretty difficult and I think for most people traffic yours is improving sequentially I don’t know if that also meant was purely positive overall for the quarter. But I’m curious why – what’s being done different if it’s the targeted marketing is helping, if it’s the CRM is already kicking in or just the steadiness of the model? But why do you think your traffic is improving well and others’ seems to be getting worse?

Well I can take you all the back to ‘08, ‘09 when the whole world and our traffic was gradually improving and we’ve always outperformed retail. I don’t think that following mass is necessarily a great indicator for us. You know the issues that we’ve had over the last 12 months which we’ve anniversaried now that’s part of it. Our traffic was positive for the quarter which I’m not sure that’s what you were referring to, but it was. I think a lot of the things that – couple of things we made some changes in our marketing approach which we’re well aware of. We’re now finally, in a position where our CRM programming is in place. We are ready to use it actually used it a little bit here in July, we’ll be using it more going forward. She has done just an unbelievable job in making some changes to literally anything we do from the appearance of professional flier, the appearance of our BCC mailer. She’s getting us a lot more involved from a customer acquisition standpoint in digital and social, which we haven’t been before and we’re able to target a lot of that in the same way that we targeted the mailings that we were doing to a highly profiled group of potential customers, and obviously when you are doing it via digital and social it’s a lot less expensive. So we’re now in a position with CRM up and running, that we can actually start investing some of those huge dollars that we’ve been investing in customer acquisitions via mail in other avenues that I think will be just as, or more effective, and at the same time less costly. So, I’m excited about all of that. Chris is doing some things relative to the…

Yeah.

We’ll go to Meredith Adler with Barclays Capital. Please go ahead. Meredith Adler – Barclays Capital: Thanks very much. I have two questions one about the fact that the marketing spent was up so much. And I was wondering if you could talk us through what that spending is? Is that just for waist related to the customer acquisition process which obviously a bit more expensive now than it was because you’re doing more single mailings, or is there some other aspect in marketing that you’re spending more money on?

Keep in mind, last year in the April-May timeframe is when we realized that what we were doing was not working. We shut that down because it was more or less a waste of money and it took us until the July August – actually August to crank that back up or it was the July-August period. So you’re seeing some of that but you’re also seeing the third quarter just a bad comparison with last year. Meredith Adler – Barclays Capital: Okay. And so that would imply that what we’re seeing now in terms of marketing spend is more of a normal run rate?

Yes, that’s correct. But you’ll start to see it compared to why look more normal here in the fourth quarter and then going forward because as I said last year pretty much in the third quarter when we realized what had happened and then wasn’t doing anything for us there was no point in spending the money. Meredith Adler – Barclays Capital: Right, right. I have a question also you did a talk a little bit about what I call the casual customer versus the BCC customer. And I just wanted to kind of go through that again. It sounds like you are making progress. I realize that you’ll never know whether a casual customer is turning into a BCC customer there is no way to really know that you just see weakness in casual and strength. But do you think that’s happening? And generally, how is your feeling about how the casual customers are looking at Sally?

Well, first of all, that’s not really true Meredith. I mean every new BCC customer is a conversion of casual customer because that happens in the store. So when a customer comes in they’re not a BCC customer. They join BCC that takes them out of one bucket and puts them into another. But one of the things that I’m actually going to ask Chris to comment on, because he’s been working really closely in this area with Ashley is the fact that that our casual as you call them customers, are not as casual as we might have thought. Chris, do you want to add some color to that?

Yes. For the most part, we found that many of those customers are actually people who have been witnessed or shopped a large percentage of them has shopped from the last couple of years. They shop less frequently obviously than the BCC customer and so they are very familiar with Sally. And then the question is how do we convert them to BCC or at least how do we give them more reasons to come back more often and get more excited about the store which is part of that is we’re working really hard to capture their names as well so you have the BCC database but you have a broader database than that. And we’re making a lot of progress with that getting those names captured so that we can market them effectively in the future at much lower cost ways. In addition, which creates a points of different. So as Gary pointed out, we got a big investment in Nail studio coming in the three four months which hopefully creates a point of difference. And we are working on a number of different product launches innovations then also get to that point of difference. And the goal would be to get them back into our stores more often but also then to convert them to BCC customers over time because their shops will go up as well as their loyalty and our percentage of their Beauty wallet will go up as well. Meredith Adler – Barclays Capital: Thank you. That’s very helpful.

Thanks, Meredith.

And we’ll go Oliver Chen, Citigroup. Please go ahead. Oliver Chen – Citigroup: Thanks for that. Congrats on solid results. Going forward, as we look at our models and the comp store sales, what are the levers that have the most opportunity in Q4 and next few quarters between traffic versus ticket? Also inventories to grow a little faster than total sales it’s you feel comfortable with the freshness of the inventory now and I just had a follow up for Chris. Just your thoughts as you improve the consistency of the marketing where does that impact as the biggest impact the financials?

Well it’s a lot there Oliver. Let’s go back and give me the first part of that again Oliver Chen – Citigroup: Just trying to get a feeling for the main comp levers as we approach the next quarter and few quarters after this in terms of the run rate between traffic versus ticket and where you see opportunity?

Well my expectation on that part of the question is that ticket will continue to slowly go up as it has for a very long time, much driven by the fact that BCC spends a little more money than retail and BCC is still growing pretty rapidly. Our professional business if that continues to grow a little stronger than it does historically that’s a much higher ticket but at a much lower margin. I do expect over the next couple of months or I should say the Q4 here in general that traffic because of a lot of these marketing initiatives is also going to be a nice driver of that. And what was the next part? Oliver Chen – Citigroup: I was curious about the inventory. Inventories grew more aggressively than sales and how you talked about the current freshness.

Yes, the freshness I’m not worried about. When we bought some of the new products such as OPI and so forth and so on we didn’t know quite what the expectations were so we overbought. So we’re still little bit heavy in some of the new product lines. We also as I’ve said last quarter deliberately overbought on a lot of the 50th anniversary promotions just so we would have some breakdown value to either use promotionally or keep the margin in our pocket. So we do have too much inventory right now from a freshness or an obsolescence standpoint we’re not worried at all about that but we do need to bring inventories down. And the last part again was for Chris…

And Oliver I guess what I would say would be I’m not sure I would disaggregate and just focus on the marketing side of the experience I would focus on the entire customers experience. So there is obviously the marketing, which is how do we reach out to them effectively with messages that matter, whether that is through CRM or broader base marketing. There is the merchandizing in terms of what do they experience when they show up in the store, exciting new products and exciting new ways of displaying those products that creates some energy in store. There is this store environment itself and how we can make that different for the consumer. And there is the service they experience in terms of the expertise we provide. And all of that goes kind of into that consumer recruitment model as well as the retention model. And we’re working across every one of those pieces right now and when I say the team has lots of great ideas, and I expect they are going to continue to get better at each of those and as we do you’ll see better results over time. Oliver Chen – Citigroup: Thank you. Looking forward to it. The business model does have this consistency factor which is a really strong positive, Chris. Do you see is it a share gain opportunity, because or do you feel that customers can spend more per check and this may be just premature relative to…

No, listen I think both of those are possibilities, right? Even with our BCC customers we’re looking at 30% or so of their wallet that we have today, and those are very loyal people that we have great connections to and the ability to reach out to. So there is no doubt that we want more of their wallet. But we also have to over time earn some new customers who are currently shopping elsewhere and we’re going to be working on both of those things. Oliver Chen – Citigroup: Thank you. Best regards.

Thank you.

Thanks, Oliver.

We go to Joe Altobello with Oppenheimer. Please go ahead. Joseph Altobello – Oppenheimer & Co.: Thanks. Good morning, guys and welcome to Chris as well. Wanted to kind of go back to the Sally side obviously looks like you mentioned earlier the operating expense there you’ve been doing some investments on CRM some marketing etcetera. But that business has de-levered on the OpEx line I guess for seven out of eight quarters now. And I’m trying to understand how we think about that in fiscal ‘15 given the changes to the marketing strategy that you’re talking about this morning, trying to get customers in the store. Would you expect marketing to go up relative to the sales next year and would you expect the lever the overhead portion of SG&A next year to offset that?

Well first of all, I wouldn’t expect marketing and promotion to go up as a percent to sales, partly because I believe that we’ll continue to see sales improvement comp and top-line. So it should keep that percentage in place. What was the second part? Joseph Altobello – Oppenheimer & Co.: In terms of leveraging SG&A, sort of I said that, but you kind of answered the first part of the question.

When you look at the SG&A in the divisions and you take out some of the, I hope one-timers this year, such as the healthcare expense and the transition cost and things like that. If we get our comps up into the range where we have told you that we believe we’ll get back to a normal comp range, then we should get SG&A leverage there. And, like I said, all of the margin levers relative to customer mix and product mix have not changed. They have changed a little within the retail in that more BCC and less retail put a little pressure on margin. But like I said earlier, once that BCC starts getting up into the 60%-65% of the retail business, just the waiting of the two businesses relative to the previous year, going to start showing improvement there as well. Joseph Altobello – Oppenheimer & Co.: Got it. Okay. And then secondly in terms of capital structure, obviously you mentioned this morning a potential additional authorization on the shares buyback front. How comfortable are you with your leverage of ratio now? And would you expect that the tick up over time as you go through the buyback stock or continue the buyback stock I should say?

I don’t think we have plants to take the leverage ratio up at least presently. It will actually start to drift down I believe we’re on the high side of 2 I think we’re around 2.9 right now and we kind of stated 2.5 is where we’re more comfortable. It all depends a lot on the stock price interest rates and everything else. But at this point, we have no plans to take the leverage up any higher. Joseph Altobello – Oppenheimer & Co.: Okay. So one last one the CapEx you mentioned roughly 85 million this year, should that come down next year?

I don’t think so, no. We still have a lot of projects going in IT for the BSG side of our business. We have some store refresh improvement – it won’t come down. There wasn’t anything really extraordinary in this year’s that won’t be repeated. We still have a lot of IT projects going on international ERP is still going on so... Joseph Altobello – Oppenheimer & Co.: Okay. Great. Thank you, Gary.

Thank you.

We go to Olivia Tong with Bank of America. Please go ahead.

Hello? Olivia?

Hi, Olivia your line is open. She may have disconnected. We’ll go to our next question. We go to Taposh Bari with Goldman Sachs. Please go ahead. Taposh Bari – Goldman Sachs: Hey guys. Good morning. Gary I wanted to ask you kind of more of a high level question on the marketing initiatives that you have changed at the Sally US business which happened almost a year ago now. Help us understand how those changes have actually contributed to the same store sales improvement? I know there has been a lot of noise over the past several quarters with weather, but are you pleased with the changes that have been made and should we continue to see an accelerated rate of comp in the US business going forward?

I believe you will and here is why. First of all, if you look at the traffic over the last four quarters, they were slightly negative. This quarter after we’ve almost anniversaried the change in marketing, it’s positive. So I guess you can have an argument was it really that cost did or something else those things are really I think difficult to get a definitive answer to. But, my gut feel tells me that when you’re marketing to people in a more targeted profile manner, you’re going to have better results than just mass marketing. Now we’ve reached a phase where I think we can see a lot of improvement in the BCC business as well as some less expensive ways to go after prospective customers, because we have the ability to do some of that in a little more profiled way but using different vehicles like social and digital. So, I would expect the BCC business to continue to go grow nicely, not only as far as new BCC members go, but as far as getting more as Chris mentioned, more of the Beauty spend because we’re able to communicate with them now in a way that’s a lot more relevant than we were before we had all the things in place for CRM. Taposh Bari – Goldman Sachs: Great. And then on BSG I think last quarter you had mentioned that weather was impacting the comp growth at that division. How do we think the comp growth there? And I noticed the consulting business was up I think for the first time in a while if I’m not mistaken. Is that a change in trend or how do we think about it the consulting business vis-a-vis the retail business and how should we think about the retail business going forward as far as comp goes?

You’re talking about BSG? You mean the store business? Taposh Bari – Goldman Sachs: Yeah.

Okay. Well, BSG was affected by a little over a point in anniversarying Miracle. So, you either take last year’s comp down a point or add a pointer to this year however you want to look at that, but it was basically 6 million bucks and it was split pretty much between the stores and the sales consultant. Sales consultant business is looking stronger, part of the reason for that is we are picking up some chained business that we didn’t have in the past. So for the most part, that doesn’t come out stores it’s kind of incremental to us. But I’ve always told you that you have to be a little careful with BSG, because the business will sales consultants and a lot of times based on a new production that we may be give the sales consultants give before the stores just from an inventory standpoint and also sometimes it’s the strength of the promotions that one side may have versus the other in a particular quarter. Taposh Bari – Goldman Sachs: Thank you.

We are going back to Olivia Tong, Bank of America/Merrill Lynch. We’ve got your line open again. Please go ahead.

Apologies for all of that and good morning and thanks for the question. This is Eline on behalf of Olivia. Just a question for Chris, what has been the biggest surprise so far in your first few months of the business?

That’s a great question actually. I think what I would say is how excited the team is to go after and begin rethinking of the things they are doing and the charges in. We’re making tremendous progress in terms of getting some new ideas out there. Lot of those will be heating the market in the next three or fourth months in the next stores in the three or four months. And the team is highly energized both to try them and to experiment and to make things real for our consumers. So, I’ve actually been very pleasantly surprised with the energy, enthusiasm, excitement and capability of the team and their willingness to go out and go after these new ideas. So if I had to pick one, that would be it.

Great. Thank you.

And we’ll go to Jason Gere with KeyBanc Capital Markets. Please go ahead. Jason Gere – KeyBanc Capital Markets: Thanks. Good morning, guys.

Hey, Jason. Jason Gere – KeyBanc Capital Markets: Okay. Two questions I guess one if we can just go back to may be some of the SG&A investments. It sounds like obviously you’re still got on the CRM and even some of the new markets, penetration and may be Chris can provide the contacts there. But for the back of this year you’re saying 6% to 8% to step up. I’m just kind of wondering how we think about next year and understanding that you’re anticipating sales to be better this year so you’ll get a little bit more leverage. But should we think about the SG&A kind of the level of investments to be comparable to this year as a percentage – as an actual year-over-year percentage not obviously as a percentage of sales. So that’s kind of – just trying to get a sense of the understanding of how much more investment there might need to be and obviously has the comps come through, you’ll get better operating leverage on that investment.

So that would be our expectation, is that we will go into next year, with an expectation to get the SG&A leverage. But I think it’s a little early, we’re really early in the budget planning process right now and we’ll be able to give you a lot more color on that obviously on the next call. Jason Gere – KeyBanc Capital Markets: Okay. But you would anticipate some of the investments from this year will carry over to next year or is that I guess a reasonable assumption?

Yeah, sure. Jason Gere – KeyBanc Capital Markets: Okay. The second question I guess is on comps, I know the longer term model going to 3% to 5% I guess first off just want to see if you think that you should be back in that range last year and then just more if you could may be talk a little bit about July, may be how July compared to June and May if you can provide any context there?

Well first of all, as I said about this year I think our comps will gradually improve quarter-by-quarter so to tell you that there would be three to five times for the next year might be a little aggressive. I hope we’re in that range, and if we are it will be as I said each quarter will progressively get better. Talking about July, I’m very pleased with July. It’s consistent with what I have said my comps are getting better quarter to quarter. We got some great things planned for August and September and I believe that we’ll do exactly what we’ve said to be done. We will see improvement in Q4 over Q3. Jason Gere – KeyBanc Capital Markets: Perfect. Thanks a lot guys. That’s it for me.

Thank you, Jason.

And we’ll go to Jill Nelson with Johnson Rice. Please go ahead. Jill Nelson – Johnson Rice: Good morning. If I could ask a question, you mentioned a couple of times you’re testing a new store look later this year, you have some new store refreshes. Can you give us some more insight about that and kind of your thought process behind that?

I think it’s just making the in-store experience more exciting for the consumer and easier for them to shot these doors. I would call it a refresh not renewals so it’s not a major shipped strategy of any sort we simply refresh the stores modifying shopping experience for the consumer and that will be tied in with the introduction to the nail studio which creates some merchandizing excitement as well as new product launches. Don’t think about it as radically changing the store format, it’s more of a refresh to make the environment to be more attractive and more exciting for the consumer. Jill Nelson – Johnson Rice: And then just an update on the I believe you have some management openings at the Sally division President and the Group Vice President merchandizing if you can talk about – have you filled this position and possibly the timing?

It’s not the merchandize – we have a terrific merchant Linda who’s there but we do have a President to Sally US stores. I am interviewing that position but what I say is our team is doing a terrific job running the business and we’re in no hurry. We’re going to interview and find terrific candidate and if that happens sooner, great, if it takes a while, I’m not worried about it. The team is doing a great job and we’ve got a terrific team that’s clicking on all cylinders right now. So we’ll take our time and find the right person for the role. Jill Nelson – Johnson Rice: All right. Appreciate it. Thank you.

And we’ll go to Linda Bolton Weiser with B. Riley. Please go ahead. Linda Bolton Weiser – B. Riley & Co.: Hi. Just to return back to the topic of fund raise a couple times. In terms of the sales performance of the non-BCC sales base, can you just say that the sales performance was better in this quarter than it was in the first fiscal quarter? Because excluding the second quarter which was weather impacted, I don’t know if you’d be willing to give us those numbers but that would be helpful. And then secondly, just thinking about the driver over time of incorporating more private label brand. I know you had said OPI introduction and adding that to your product line was very beneficial. In that customer had a higher average ticket so really a good affect on your business. How do you balance that in terms of bringing these kind of major brands with that initiative to have more private label over time. Could it be the brand, actually have advantages that might make pull you back, from that driver in terms of private label over a long term basis. Thanks.

Answer to your first question, Linda, is yes we did see improvement in Q3 over Q1 in the non-BCC customer. Secondly, keep in mind I explain this all the time, that our private label is not viewed by the customer as private label. And many of these brands are that we have acquired from within the industry. And I believe as far as innovation and packaging and quality of the juice in the bottle, that our people dedicated people to these brands that their putting as much attention investment everything else into keeping these brands up to date as any of our third party brands. So I would tell you that I believe that our private label will continue to grow as a percentage of our business, for the next several years just because of the innovation and everything that we’re putting into these brands. Ion hair colors are a great example of that. This is a brand that didn’t exist the cost of hair color six or seven years go it’s approaching $50 million it is the last time I saw some industry data it was the fifth largest hair color brand professionally in the U.S. So yes the customer views it as Ion. And again, Ion is a brand that we acquired gosh getting close to 30 years ago. So I don’t look at it as are we pushing private label too much, to be honest with you, if you look at any of our advertising, we really don’t favor as far as job placement or anything else our brand over the third party brands. It really is a customer selection, when the consumer is who’s making that choice we just hope that our brands are complete favorably third party branch and they’ll continue to grow. Linda Bolton Weiser – B. Riley & Co.: Great. Thanks, Gary.

Okay, Linda.

And we’ll go to Ike Boruchow with Sterne Agee. Please go ahead.

Hi guys. This is actually Tom for Ike. Thanks for taking my question. I was if you’ve answered this already I know you said SG&A growth should be about 6% to 8% for the second half of the year, and that there is sort of some non-recurring type of stuff in there. I was wondering beyond that may be in fiscal ‘15 what’s the sort of fiscal typical run rate for SG&A growth? Thanks.

Well, we did kind of address that a few minutes ago and we basically we said we expect to get SG&A leverage, but it’s a little early to make any definitive comments about SG&A. We’re in the middle of the budgeting process right now. And we’ll give you some guidance on that in our fourth quarter call.

Okay. Thanks very much.

Thank you.

And we go to Karru Martinson with Deutsche Bank AG. Please go ahead. Karru Martinson – Deutsche Bank AG: Good morning. I don’t want to jump the gun on the longer term strategic plan for clarifying global growth, but did want to get a sense of kind of when you look at the opportunities for expansion and acquisition. What is still out there, given that you guys have had a very successful run of kind of integrating most of the major players out there?

Well, that’s true in the United States. We have had a very successful run a long ago on the Sally side and more recently on the BSG side. But we still believe that from an acquisition standpoint I think Europe probably offers, more opportunities. We’ve been trying very hard as you probably know to get into to Brazil and I think that will be situation where we make an acquisition and then grow rapidly green fielding the rest of it would be my guess. Whereas in Europe, most of the distribution there is country by country, so to see us go into a new country and make an acquisition and then to go on to another country and make an acquisition and assimilate those through our existing business is probably where you’ll see more acquisition opportunity. Karru Martinson – Deutsche Bank AG: Okay. And I you stated that you are still more comfortable being closer to 2.5 times average target? What’s your kind of view on your capital structure and your kind of commitment to the ratings?

Well I think that Mark’s done a good job with the rating agencies and as we said, we’re at the high end of our comfort level right now, expect that to come down. I wouldn’t want to lock us in to again, based on interest rates, because as far as our buybacks based on the stack of the price but also based on acquisition opportunities. As you know, we’ve been levered a lot higher than this now spinning out of and I think if the right acquisition opportunity came along which might require a little more leverage than we currently have, we would certainly look at it. Karru Martinson – Deutsche Bank AG: Thank you very much guys. Appreciate it.

Thank you.

We’ll go to Mark Altschwager with Robert W. Baird. Please go ahead. Mark Altschwager – Robert W. Baird: Great good morning. Thanks for taking the question. Could you just talk a little bit more about the sales performance of the international stores? And then from a margin perspective, how much of a drag is international been on Sally margin this year and should we think about that into ‘15?

Well as we’ve said many times in the past, international particularly Europe and the UK there is a lower operating margin business lower gross margin as well. It’s more along the line of BSG. So success to me in Europe and the UK, would be over the long term to get to the operating margins in the neighborhood of BSG which will be a bit of a drag on the south, but there will be new business margin wise. We are seeing similar margins to Sally in Mexico, Peru and Chile, but those are growth stories where we are doing a lot of investing and we finally have Mexico into strong double digit operating earnings, but it’s been 12 years to get it there and it’s been a Greenfield story going from one store to about 200. So that’s just retail, that’s the way it is built. But as far as you can probably do the math based on what I said and if you assumed that international which mixes those two together, will be an increasing part of our business. I think it’s running around 23% right now. And as that increases we will have some margin pressure. Now in the short term, because we are getting more and more leverage business, it will tend to help it from an operating margin standpoint, but over the long term, like I said, they are more like BSG, particularly like the Europe and the UK which is where the bulk of our international is at this point. Mark Altschwager – Robert W. Baird: Okay. Thank you. And then separately could you update us on the progress with Locks Beauty?

Yeah sure. Locks in is very much a work in progress. It’s a grass roots kind of thing where we are constantly out there pounding the paper with our sales consultants, explaining to salons why they should get into Locks-in and the store people do the same thing and a lot of the independent stylists. And as I said in the beginning this is not going to be a 50 million business overnight, it’s going to take a long time to build this. We’re committed to it. We believe that long term it makes a great deal of sense to the industry and for our business. But it will be immaterial for a while. Mark Altschwager – Robert W. Baird: Thank you

I’ll now turn it back to our presenters for any closing remarks. Gary Winterhalter; Well thanks everyone. And as I said, I am pleased with our third quarter results. I believe our Sally US retail business has turned the corner and continue to improve and our BSG business continues to be very healthy. I’m optimistic about our business as we head into our final quarter and into fiscal 2015. And as always thank you for your interest in Sally Beauty Holdings.

Thank you. And ladies and gentlemen, this will conclude our conference call for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.