Regis Corporation Reports $64.7 Million in Total Revenue In Q3

Regis Corporation, a haircare industry leader, announced that total revenue in the third quarter and nine months ended March 31 was $64.7 million and $212.8 million including royalty growth of 23.1% and 31.2%, respectively. 

 

Total revenue in the quarter of $64.7 million decreased $35.5 million, or 35.4%, year-over-year, driven primarily by the company exiting company-owned salons that generated significant revenue, but were loss-making. Partially offsetting the decline in company-owned revenue was an increase in royalty revenue due to higher franchise salon sales and an increase in franchise salon count.

 

“Our third quarter results improved year-over-year, but were below our expectations due to a slower sales recovery and the continued wind down of our legacy businesses,” said Matt Doctor, Regis CEO. “We continue to be affected by labor issues and lower customer counts stemming from the pandemic, but remain encouraged because our results reflect a business that has not yet benefited from the action steps we have identified in tandem with our franchisees to improve our performance, including a single technology platform for our entire system, more robust stylist education and events for a stronger talent brand, and a refocus of our marketing efforts toward digital. We are confident that our fully franchised business model and the measures we have underway will lead to stronger profitability going forward.”

 

Third quarter adjusted EBITDA loss of $0.3 million improved $19.5 million, versus an adjusted EBITDA loss of $19.8 million in the same period last year. The improvement was driven by an increase in royalties; a decrease in general and administrative expense; and the company exiting loss-making company-owned salons over the last 12 months.

 

Regis reported a third quarter 2022 net loss of $27.9 million, or $0.61 loss per diluted share, compared to a net loss of $10.8 million, or $0.30 loss per diluted share, in the third quarter of 2021. Net loss included a goodwill impairment charge and increased inventory reserve totaling $22.4 million. Excluding discrete items, the company reported a third quarter 2022 adjusted net loss of $4.3 million, or $0.09 loss per diluted share, compared to an adjusted net loss of $25.3 million, or $0.70 loss per diluted share, for the same period last year. The year-over-year improvement in adjusted net loss was driven primarily by improved sales leading to an increase in royalties; a decrease in general and administrative expense; and the company exiting loss making company-owned salons.

 

Third quarter revenue for the company-owned salon segment decreased $28.8 million, versus the prior year to $3.5 million. The year-over-year decline in revenue was expected and driven by a net 448 salons sold and converted to the Company's franchise portfolio over the past 12 months and the closure of a net 261 unprofitable salons over the past 12 months. Third quarter Company-owned salons adjusted EBITDA loss improved $9.5 million, versus the same period last year driven primarily by the elimination of EBITDA losses in the prior year period from the unprofitable salons now closed. The adjusted EBITDA loss of $3.3 million includes a $1.1 million inventory excess and obsolescence charge.