Regis Q2 Net Loss Widens On Lower Comps, Charges; Results Miss Estimates

(RTTNews) - Regis Corp. (RGS), an operator of hair salons, reported Monday a wider loss in its second quarter, hurt mainly by significant charges as well as lower sales and same store sales. Adjusted loss per share and sales missed analysts' estimates.

For the second quarter, net loss widened significantly to $109.98 million, or $1.95 per share, from last year's loss of $12.27 million or $0.22 per share. The latest results included certain discrete non-cash charges of $112.1 million to impair goodwill and establish a valuation allowance against deferred tax assets.

For the recent quarter, adjusted net loss, which excluded items, came in at $2.43 million, or $0.043 per share, compared to a profit of $0.03 per share a year ago. On average, five analysts polled by Thomson Reuters expected earnings per share of $0.01 for the quarter. Analysts' estimates typically exclude one-time items.

The company noted that lower same-store sales reduced adjusted earnings by approximately $0.13 per share, partly offset by benefits of approximating $0.06 per share, mainly from cost savings initiatives, reduced bonuses, lower interest and tax credits.

EBITDA, as adjusted, was $21.6 million, compared to $31.1 million in the prior year quarter.

Quarterly sales of $468.4 million were down 7.5 percent from the prior-year figure of $506.2 million. Analysts estimated revenues of $478.81 million for the quarter. Same-store sales fell 6.2 percent, compared to a 1.9 percent drop a year ago.

In the quarter, service revenues fell 7 percent year-over-year to $361 million, mainly driven by declines in North American salon revenues. Same-store service sales declined 5.5 percent, comprised of a 6.6 percent decrease in guest counts, partly offset by a 1.1 percent increase in average ticket price.

Product revenues decreased 9.7 percent, and product same-store sales declined 9.2 percent, representing 560 basis points of trend improvement since last quarter, the company noted. Royalties and fees remained flat with last year.

President and Chief Executive Officer Dan Hanrahan said, " I have seen enough positive results within our field organization to recognize we have in place the right structure and tools to generate increased revenue, guest retention and profitability. …. Our business model is sound, our balance sheet is strong and our business continues to generate positive cash flow. .... I am confident in our ability to restore Regis to sustainable growth and improved profitability."

Regis shares closed Friday's trading at $13.42, down $0.53 or 3.80 percent.