Mixed Results Among Indicators Leave SSPI Unchanged from Previous Quarter

Phoenix, AZ (May 21, 2013) – After hitting its lowest point in the third quarter of 2012 and rebounding in the fourth quarter, the Professional Beauty Association’s (PBA) Salon/Spa Performance Index (SSPI) continued to hold steady in the first quarter of 2013. Mixed results across the indicators used to the measure the SSPI provided slightly conflicting results, which caused it to remain unchanged at 102.4. Year over year, the SSPI is down slightly by 0.4 percent from the first quarter of 2012. Furthermore, the Current Situation Index remained unchanged at 100.5, while the Expectations Index increased slightly by 0.1 percent to 104.4.

The SSPI is a quarterly composite index that tracks the health and outlook of the U.S. salon/spa industry. The SSPI is based on responses to PBA’s “Salon/Spa Industry Tracking Survey,” which is fielded quarterly among salon/spa owners nationwide on a variety of indicators. It is constructed to measure the health of the salon/spa industry in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction. The Index consists of two components – the Current Situation Index and the Expectations Index.

“The professional salon/spa industry remains resilient. Overall indicators and feedback from beauty professionals across the country continue to be positive, and we hope to see additional growth in the near future,” said Executive Director of PBA, Steve Sleeper.

The Current Situation Index, which measures current trends in five industry indicators (service sales, retail sales, customer traffic, employees/hours and capital expenditures), remained unchanged at 100.5 in the first quarter. Just like the broader SSPI, the Current Situation Index is also down by 0.4 percfect year-over-year from first quarter 2012.

Service sales and customer traffic levels in the first quarter of 2013 were stronger. Fifty-one percent of salon/spa owners reported an increase in same-store service sales between the first of quarters of 2012 and 2013. In contrast, staffing levels, hours of employment and capital expenditures were all slightly down. While none of these areas posted concerning results, they still countered the positive indicators.

The Expectations Index, which measures salon/spa owners’ six-month outlook on five industry indicators (service sales, retail sales, employees and hours, capital expenditures and business conditions) rose 0.1 percent to 104.4. The Expectations Index continues to remain above 100, which indicates that salon/spa owners are optimistic about growth in the coming months.

Salon/spa owners were most positive on growth relating to service sales, retail sales and the overall direction of the economy. However, fewer salon/spa owners are planning to expand staffing levels in coming months or make capital expenditures for equipment, expansion or remodeling.

The full SSPI report and the “Salon & Spa Tracking Survey,” along with other helpful research on the professional beauty industry, can be found at www.probeauty.org/research