Regis posts 4Q profit versus year-ago loss, but revenue falls, misses view

Regis posts 4Q profit, but misses expectations

MINNEAPOLIS — Hair salon operator Regis Corp. posted a profit for its fiscal fourth quarter on Thursday in contrast to a loss a year ago as its efforts to cut costs showed results.

But revenue fell and its adjusted earnings and revenue each missed Wall Street expectations.

Its shares slipped 21 cents to $16.92 in premarket trading.

Regis, which operates under Supercuts, MasterCuts and Hair Club for Men and Women, said earlier this month that it has hired legal and financial advisers to review its options, including a possible sale.

Chairman and CEO Paul D. Finkelstein said the company has “taken aggressive action to strengthen our balance sheet and improve our efficiency” in the past year.

“We have substantially lowered our debt, improved our cash flow and reduced expenses,” he said. “These measures played an important role in achieving our financial results.”

Regis will focus on boosting revenue for the rest of this year, he said.

The decline in revenue from stores open at least a year has slowed to 1.9 percent in the first 55 days of the current quarter compared with a 2.7 percent drop in the fourth quarter, Finkelstein said. That figure is considered a key performance indicator because it measures growth at existing businesses, rather than including new ones.

“Our customer service and communication programs, marketing and salon revitalization efforts will help mitigate the adverse effects of the current economy,” he said.

The Minneapolis company earned $18.3 million, or 30 cents per share, in the three-month period ending June 30, versus a loss of $4.6 million, or 11 cents per share, a year ago.

Excluding a goodwill impairment charge of 4 cents per share, the company earned 34 cents per share in the quarter.

Revenue fell 6 percent to $589.9 million from $624.7 million a year ago.

Analysts polled by Thomson Reuters expected the company to earn 37 cents per share on higher revenue of $593.7 million. Analysts typically exclude one-time items from their estimates.

Regis owned, franchised or had stakes in 12,728 hair care locations worldwide at the end of the quarter. Its other brands include Sassoon Salon, Regis Salons and Cool Cuts 4 Kids.

For the fiscal year, the company reported net income of $42.7 million, or 75 cents per share versus a loss of $124.5 million, or $2.89 per share, a year earlier.

Revenue fell 2.9 percent to $2.36 billion.