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Dec 31, 2019
Regis Q2 2020 Earnings Report
Reported a net loss from continuing operations and made progress in its transition to a fully-franchised model.
Key Takeaways
Regis Corporation reported a net loss from continuing operations of $9.5 million, or $0.26 loss per diluted share, for the second quarter of 2020. Adjusted net income was $4.6 million, or $0.13 earnings per diluted share. Total revenue was $208.8 million, a decrease of 24.0% year-over-year. The company sold and converted 443 company-owned salons to its asset-light franchise portfolio during the quarter and expects its transition to be substantially complete by the end of the calendar year.
Transition to a fully-franchised business is expected to be substantially complete by the end of the calendar year.
Company began meaningful reductions in annualized expenses and initiated plans to re-engineer its capital structure.
Second quarter Franchise revenue was $79.8 million, a $39.4 million increase compared to the prior year quarter.
Company-owned salon segment revenue decreased $105.3 million, or 45.0%, versus the prior year to $128.9 million.
Regis
Regis
Regis Revenue by Segment
Revenue by Segment
Franchise Revenue
CapyFin.comCompany-owned Salons Revenue
CapyFin.com Forward Guidance
Regis Corporation expects that its transition to a fully-franchised business will be substantially complete by the end of this calendar year.
Positive Outlook
- Transition to a fully-franchised business model.
- Focus on capital-light franchise model.
- Higher return on capital.
- Meaningful reductions in annualized expenses.
- Plans to re-engineer capital structure.
Challenges Ahead
- Dilutive impact on Adjusted EBITDA.
- Elimination of adjusted net income from company-owned salons sold to franchisees.
- Decrease in company-owned same-store sales.
- Decline in service and product margins.
- Decrease in marketing spend.
Revenue & Expenses
Visualization of income flow from segment revenue to net income